Five ways to find local seed funding for your Cambodian startup
Edit: Aug 8th: I’ve added more funding sources.
Bootstrapping your startup can be difficult and in order to invest in building your company you may decide you want to seek funding. But finding someone to fund your idea can be difficult. Seed investors can range from professional investors to friends and family, so selling them on your idea can be a challenge. Here are five practical ways you can use to raise seed funding for your project.
1. Start talking with your family and friends
When just starting out it’s usually easier to get small startup money from your family and friends. By talking with people you already know and trust, you can work on your pitch, get feedback and hopefully get some money in the process.
In a family and friend round of investing, you can usually get better investment terms than with a professional investor. Your family might be only looking for a 5% return on their investment, or would just like you to pay them back at some point. Any professional investor you work with will ask for 10% to 25% stake in your company.
2. Connect with local co-working spaces
The funding process involves a lot of time investing in relationships and building connections. In Phnom Penh there are a few co-working spaces that can help connect you to investors and other startup founders. Socially focused co-working space, Impact Hub provides support and resources for local startups. Cambodian ran, Small World provides a community, incubator, and support for local startups. And CoLab a small co-working space in Tol Tom Pong has a great community and can provide support for your startup.
3. Apply for grant funds
The Cambodian funding market is different than most neighbouring countries. Due to the large amount of NGOs and large donor money still in the country, startups can apply for funding to help grow their project. Grant funding works differently than traditional investments, which usually requires more transparency and reporting, but you don’t end up giving away part of your company when the grant is over.The Development Innovations project provides grant funding for technology projects In Cambodia. USAID has funding available through their Development Innovations Venture program. UNICEF provides money to startups with their Innovation Fund. Lastly, GSMA is offering startup funds for acceleration in Cambodia.
For more grant funding opportunities you can search through the Devex database.
4. Launch a crowdfunding campaign
Crowdfunding has been taking off in recent years and has become a reliable way to secure seed funding for some startup projects. Everyone knows Kickstarter is a great platform for funding their projects and Indiegogo has started to grow it’s presence in Cambodia as well. For those startups looking to raise funds from Cambodians, recently launched TosFund provides a local crowdfunding platform focused on social causes.
5. Network for corporate seed funding
Larger, established companies, including Google, and Microsoft, offer seed funding to innovative startups using their technologies. While some of these larger corporations might be hard to connect with in Cambodia, large local companies also could be interested in your business.
The major telecoms are a great place to start talking to. Both Cellcard and Smart work with technology startups that are interested in using their network and technologies.
The Cambodian banks are accessible and provide a great opportunity to partner with as well. ACLEDA has launched its online payment gateway and is looking for partnerships. And ANZ Royal has previously invested in companies that provide banking related products, most notably was the mobile payment service Wing.