The 5 Hong Kong Government Grants For Small Businesses You Need to Know

July 24, 2017

Running a small business in Hong Kong or looking to start one there? Given that it is consistently ranked among the top in the world for economic competitiveness and has a straightforward business incorporation process that can be completed in five to seven days, Hong Kong is a popular destination for business owners.

Related reading: 5 reasons to set up your business in Hong Kong

These business benefits are not just limited to large MNCs and other big businesses. Small businesses also stand to benefit, what with a slew of resources and grants that the government provides for small businesses. Here, we identify the top 5 government grants for small businesses, so make sure you don’t miss out!

1. Level up your productivity & tech-savviness with the Innovation and Technology Fund (ITF)

In his 2017 Policy Address earlier this year, Chief Executive CY Leung announced that the government had invested $18 billion on measures to attract innovation and technology enterprises from Hong Kong and elsewhere. The Innovation and Technology Fund (ITF) that which is administered by the Innovation and Technology Commission introduces a range of support schemes to strengthen productivity and competitiveness among Hong Kong companies.

Among these, the Technology Voucher Programme (TVP) that was introduced in November 2016 subsidises the use of technology by SMEs to improve productivity or upgrade business processes. The TVF funds up to $200,000 for each eligible enterprise, provided on a 2:1 matching basis, and can be used to engage a technology consultant, or purchase, rent or subscribe to customised hardware, software and technology services, among other things.

Apply for the Technology Voucher Programme.

Related reading: The 6 Singapore Government Grants For Small Businesses You Need to Know

2. Connect with mentors and acquire resources for social enterprises with the SIE Fund

The Social Innovation and Entrepreneurship Development Fund (SIE Fund) provides resources to organisations that address poverty and social exclusion through innovative solutions. The SIE Fund is allocated through a number of different intermediaries which administer programmes in the priority areas of Capacity Building and Innovative Programmes.

Source: SIE

Some of the initiatives under the SIE Fund include Impact Incubator, which connects social enterprises with resources to develop business schools, and Fast Forward, a structured 3-month programme to support early stage social enterprises in growing and scaling their impact on poverty alleviation in Hong Kong.

Learn more about the various programmes under the SIE Fund.

3. Protect your company’s invention by securing your IP rights with the Patent Application Grant

Intellectual property (IP) is a core asset of every business and has the potential to become one of the most valuable assets of your business when managed properly. Under the Patent Application Grant, the Innovation and Technology Commission with Hong Kong Productivity Council (HKPC) assists local companies and individuals to apply for patents of their own inventions. All applications for functional patents and inventions with technological elements and industrial application are eligible. Under this grant, a company can receive a grant of up to HK$250,000 or 90% of the sum of the total direct cost of the patent application and the administration fee charged by the HKPC, whichever is lower.

Learn more about the Patent Application Grant here.

Want to learn more about the different categories of IP and how you register a trade mark?

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4. Fight economic downturns with the SME Loan Guarantee Scheme (SGS)

Afraid that your business has got everything going for it only to be badly hit by the next economic downturn? This is a valid concern, given that SME loan applications fell by 37% in the first half of 2016 amidst the economic slowdown. The government has helpfully put together various resources and funding schemes to support SMEs in exactly this type of scenario.

One of these funding schemes, the SME Loan Guarantee Scheme (SGS) provides loan guarantee to SMEs to aid them in securing loans from participating lending institutions (PLIs), which includes commercial banks, for acquiring business equipment or meeting general working capital needs. Under the scheme, the government provides a guarantee to the PLIs so that they can lend money to SMEs which do not have sufficient assets to secure bank loans.

Learn more about the SME Loan Guarantee Scheme.

5. Expand your business into markets abroad with the SME Export Marketing Fund (EMF)

The SME Export Marketing Fund (EMF) provides financial assistance to SMEs participating in export promotion activities in order to encourage SMEs to expand their markets beyond Hong Kong. For each grant that covers one export promotion activity, your business can get up to 50% of the total approved expenditure incurred or $50,000, whichever is less. Each business may receive up to $200,000 of EMF grants altogether, and there is no limit on the number of applications each business can submit.

Find out whether your business qualifies for the SME Export Marketing Fund here.

Do you tap on any government grants that are missing from this list?

Let us know in the comments below!

Benefits of Flexible Work Practices

Once considered a taboo in the Asian working culture, flexible work arrangements are now garnering a lot of traction in the workplace in recent years.

Based on the report, Work-Life Design, The New Balance, by recruitment specialist Kelly Services, “70% of talent in Singapore see flexible work arrangements as positively impacting work-life balance.” Furthermore, their findings indicated that 77% of the workers in the Asia-Pacific region consider work-life balance as an important factor when deciding where to work.

Likewise, workplace flexibility is no longer a gender issue. Women in Singapore want to be able to juggle their family and career while men want to be able to pursue their personal needs. Thus, employers in Singapore are seeing the need to keep up with this innovative workplace benefit in order to attract and retain talents.

Feeling cynical about flexible working arrangements within your organisation? Here are some benefits of implementing a flexible work practice within your company.

Productive Workforce

A flexible work arrangement allows employees to take a break whenever they need to without incurring the wrath of their bosses. Furthermore, it allows employees to work in an environment that is conducive in enhancing their productivity. Likewise, greater flexibility prevents employees from feeling compelled to stay back after office hours, thus allowing them to get sufficient rest to boost their work performance.

Better Teamwork

Exercising the same flexible work arrangements across the board isolates exclusivity and resentment as everyone is offered the same flexibility. With that, it encourages everyone to help pitch in whenever someone is away. This creates a more supportive and connected team within the company.

Happier Employees

A flexible work arrangement allows employees to set their own schedules. In turn, this allows them to pursue their own interests outside of work. Additionally, it provides them time to take on outside courses or learn new skills that might be beneficial to their personal growth and career development.

Wider Talent Pool

With more workers ranking flexible work arrangement as a major attraction factor, offering this benefit might actually increase your talent pool. In addition, it can open up a more diverse range of talents as the talent pool is now not closed off to those who can take 9-to-5 jobs. This could mean hiring stay-home mothers or people with slight disabilities etc.

Reduced Turnover

Flexible work arrangements translate to happier and productive employees which in turn lead to reduced turnover rates. After all, the grass is already much greener within the company. There is no need for them to look for greener pastures elsewhere.
While the benefits of flexibility within the workplace are widely known, the challenge lies in implementing them within the company to avoid complications. Additionally, frequent communication to your employees is essential to avoid making them feel disengaged. There are many ways of implementing flexible work arrangements within the organisation. The key here is to find an arrangement that best fits your company culture.

This is a guest post from RenQun Huang at Gpayroll
Want to read more articles related to payroll, HR & technology? Visit us at Gpayroll

The lowdown on bring your own device policies

July 21, 2017

Bring your own device (BYOD) policies are increasingly popular among companies both big and small for a range of reasons. Startups and small businesses may not have the resources to invest in the necessary digital devices for every new employee they hire, while employees in larger companies which issue a new laptop to every employee might prefer to use a device they are familiar with. With the average employee more eager to use his or her own personal device than before, it is crucial that companies give careful thought to whether to implement a BYOD Policy and how to go about doing so.

What is a BYOD Policy?

A Bring Your Own Device Policy is a set of rules governing the use of employee-owned electronic devices at work, including devices such as personal computers (PCs), smartphones and tablets. A BYOD Policy will outline the company’s position and governance on the use of such devices and will ensure that the company’s network security is not compromised.

Source: IT Training Solutions

Should I implement a BYOD Policy?

It is important to weigh both the benefits and the risks of a BYOD Policy for your company before making your decision.

Some of the benefits of a BYOD Policy include the following:

    • Increased productivity: As employees are more familiar with their own devices, they will be able to work more productively using a device that suits their own needs as opposed to learning how to navigate an operating system that needs getting used to;
    • Lower costs:Providing company-issued devices to every new employee incurs significant costs, and removing this category of expenditure would free up resources;
    • Convenience: Rather than travelling with several devices to satisfy their home and work needs, employees can simply work with a single device.

The challenges and risks of a BYOD Policy include the following:

      • Cost: While some startups think of BYOD policies as a way of cutting costs by avoiding having to incur expenditure on company-issued devices, employees would expect the company to cover the work-related costs associated with using their own devices. This would include the cost of data plans, business-related phone calls, or the costs of onboarding users and their devices;
      • Policy & training: Any employee using his or her own device would inevitably have to adhere to certain guidelines or limits that your company imposes. It would be beneficial for your company to provide training or online educational tools to educate your employees about these expectations, so as to ensure employees take proper care of corporate data and are aware that exposing the company to potential legal risks is unacceptable;
      • Security: Given that you are potentially giving your employees the opportunity to access confidential information and sensitive data on their own devices, it is important to put in place the proper protections to secure such information. This includes identity authentication and steps to take should an information breach occur;
      • Privacy: While you may wish to exercise some degree of oversight over the way your employee accesses and manages information on his personal device, it is important that the management system you put in place does not infringe on your employees’ privacy.

Adapted from Search Mobile Computing

Ultimately, it is a matter of weighing up whether your company can afford to manage the risks and costs associated with implementing a BYOD Policy.

How can I implement a BYOD Policy?

Other than briefing your employees who have opted to bring their own device on your expectations and the relevant company procedures, it is crucial to put in a place a formal BYOD Policy to ensure that everyone is on the same page. A BYOD Policy sets out your company’s rights in determining how data should be used and protected, including during the period after the employee no longer works for your company.

In addition, a BYOD Policy defines the rights and duties between your company and your employees. The BYOD Policy should lay out clearly what the permissible and impermissible uses of personal devices on the corporae network are, as well as the terms of eligibility for using your own device and the supported devices and app.

To balance between exercising oversight of your employee’s access of sensitive data and your employee’s right to privacy, it is important to define your company’s right to access your employee’s device for security reasons. It is also important to determine the relevant procedures should something go wrong, such as the disciplinary consequences for policy violations like a breach of data.

When drafting a BYOD Policy, it is important to focus on a number of key clauses, in particular:

        • Details of your company;
        • Details of the employee who is acknowledging and signing this policy;
        • Activities included as acceptable business use;
        • Video or camera capabilities allowed on the device;
        • Applications allowed while using the device;
        • Excluded applications while using the device;
        • Manner by which the passwords are controlled; and
        • Amount of time before the device is locked if idle.

 

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Do you have any tips for implementing a BYOD Policy?

Share with us in the comments below!

The Dragons descend on RISE

July 20, 2017

RISE is a startup and entrepreneurship festival that takes place every year at the Hong Kong Convention and Exhibition Centre. Thousands of innovators, investors, and companies come together to share ideas, connect, and network in one of the biggest hubs in the world. Here, we recap what the Dragons got up to when they landed at RISE!

Day 1

Day 1 was all about sealing the deal on the professional relationships you had been forming over the past few months or years. The buzz was incessant as attendees walked around, talking to other entrepreneurs and learning about their businesses. As everyone was trying to find their bearings in the hustling, bustling city of Hong Kong, lively chats were taking place on every stage in the event. These stages were set up at each corner of the convention hall with the booths set up in every other square inch available.

On the first day, there were numerous talks regarding fintech and artificial intelligence. As Jing Ulrich, of JP Morgan Chase, and Wayne Xu, of ZhongAn (an InsurTech firm) stated, FinTech is taking over the operations of even traditional banks. They are transforming their technological capabilities in order to stay competitive with other, newer financial technology companies. Some of the talks included “Building for Asia’s ‘new economy’” and “Living on the fintech Indian frontier.”

Some exciting startups aside from Dragon Law were also present, and us Dragons had the chance to talk to their representatives at the booth! Wantedly, for example, is a recruiting platform that helps both employees and recruiters understand companies and candidates. They allow candidates to find environments in which they will feel fulfilled, comfortable, and motivated. Many of our Dragons signed up for the Women in Tech cohort where they were able to network with many other women who were in startups or entrepreneurs themselves.

Blueprint, a co-working and event space, was conveniently located in the middle of the hall, was one of the main hubs throughout the conference. True to their mission, Blue Print helped to build a small community for RISE attendees, providing a great meeting place to sit and network with other companies.

Day 2

Day 2 was a big day for us, as we had our booth set up in the START section. The day, in a nutshell, was nonstop activity. Many people came up to our booth and there were many points in the day when every red-clad Dragon was talking to an attendee. It is safe to say a large percentage of RISE left the conference with some sort of knowledge of Legal Tech. We got many questions, from “What is Legal Tech?” to “How can I integrate this into my business?” all the way to exclamations like “Sign me up!” Some attendees from other countries were eager to see us eventually expand into other countries, and this gave us great excitement to know that we are being noticed from places outside our jurisdictions.

register.dragonlaw.io

From about lunchtime until the close, Dragon Law was undoubtedly one of the busiest booths in the START section. We were multitasking in talking to potential clients and signing up those who were interested in a Free Trial. Indeed, many companies were interested in how we could help them streamline their legal work in their business. Many attendees were running into the high legal fees that SMEs usually experience, and we were able to offer a quick, affordable, and easy solution. All in all, as our Sales Executive Mehdi said, “everyone was looking to improve their business” by “looking for new solutions.”

One of the highlights of our day, however, was when our Chairman, Antoine Blondeau, the Co-Founder and Co-Chairman of Sentinent Technologies, spoke about the “Three Cases of Revolutionary AI.” His company was the “highest funded Artificial Intelligence company” according to Forbes. He spoke on the three instances where AI has been truly groundbreaking. As a Legal Tech company, we are honoured to have such a technological visionary as the Chairman of our board.

Other than our stand, there were numerous talks and pitches that took place throughout Day 2. Our booth was very close to the PITCH stage, so Dragons would venture over there when they had a spare minute. One of our interns heard a few pitches but she said a couple stood out: Avigo and Unilodgers. Avigo is an app that makes corporate wellness easy and accessible. It was founded to “revolutionise the health and wellness space.” The founder, Melvin Chen, was enthusiastic about his app and believed that he could change the way people view fitness classes. The second app that was notable was Unilodgers. This application helps students find affordable housing near their University campuses. It was interesting seeing all of the ideas that radiated from that stage; their presentations was definitely a motivation for all.

Day 3

Day 3 was all about solidifying the relationships formed over the past couple of hectic but exciting days. At this point, you could walk around and see people you had seen during the day or during one of the night events, and it was hard not to run into someone who was vaguely familiar. It was helpful to follow up with the connections made during the conference. Much of our team spent the day doing this. They walked around in bright red shirts, asking people questions, collecting business cards, and finding out more about SMEs that sounded interesting or helpful.

Other talks that received high praise from our team was “BigBasket=Big eCommerce ambition.” In this talk, Vipul Parekh spoke on why he decided to go into such a low-margin industry. He stated that he believes that the industry is “highly unorganized” and he believed he could change that with the way BigBasket retains its customers and integrates science and technology into its operations.

At the end of the day, many of our Dragons were approached by attendees they had met before. These people said that they had been recommending Dragon Law throughout the conference and that they were excited to start using our software. The best part about these connections was that they grew the Dragon Law network. The more money entrepreneurs are able to save, the more they are able to grow, and the more successful they are!

After the last day’s activities and festivities, our Co-Founder and Head of Partnerships Ryanne Lai spoke at the Technology x Culture x Entertainment meetup. She discussed how technology was changing the legal culture. It informed attendees on how the legal field is integrating technology for the better.

We hope that those who attended RISE found it fun, enjoyable, inspirational, and educational. For those who were not able to make it, remember to save the date for the 2018 conference, as they are already on sale! If you are interested in learning more about the companies that presented or watching the conference videos, check them out!

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5 tips for negotiating with VCs

July 19, 2017

As an entrepreneur looking for funding, it might seem that you are the one at the mercy of all your potential funders out there – banks, angel investors, venture capitalists, and the lot. While it is true that the process of securing funding is a competitive one that requires you to be at the top of your game, this does not mean that you have no bargaining power at all.

In the case of obtaining venture capital, this is an important business deal that will have significant implications on how you grow your startup and seek more funding in the future. As a startup founder, you need to realise that there is a point beyond which the deal is no longer beneficial to you. Here, we give you five tips on how to negotiate with VCs so that you can strike a deal with makes sense for both parties:

1. Deliver a solid pitch

After spending time building relationships with VCs and securing meetings with them, the next important step is delivering an executive summary that will clearly articulate your business plan and address all the concerns on the VC’s mind. This can be an intimidating process so it is crucial that put yourself into the VC’s shoes and ensure that you cover all your bases. Beyond the relevant financial projections that shows you know the market size and scalability of your startup, VCs also care about the more intangible elements, such as the credibility of the founders. All these contribute towards their assessment of whether your startup is a right fit for their investment portfolio.

According to Dragon Law mentor Emmanuel Pitsilis, there are nine key elements you should include in your executive summary:

  1. A clear simple hook.
  2. A problem you are addressing.
  3. A tangible solution that strikes the imagination.
  4. A well-thought through business and economic model.
  5. The size of the business opportunity.
  6. Distinctiveness and defensible differentiation.
  7. Intellectual property & protection.
  8. Your team & your passion.
  9. Funding required.

Want to know what goes into each of these sections? Check out this eBook on how to prepare and deliver an executive summary to potential investors written by Dragon Law’s mentor Emmanuel Pitsilis:

Get your free eBook now

2. Get into the VC mindset

As in every negotiation, it’s all about getting understanding the goals of both parties. On your end, make a list of what you want from the negotiation. Have in mind what your boundaries are so you know what will cause you to walk away. In turn, make sure that you understand the VC’s motivations, obstacles and goals. This will allow you to frame your goals as solutions to a problem VCs are trying to solve.

According to Asia’s most influential VCs, such as Golden Gate Ventures and Sequoia Capital, these are the top things they look out for:

    1. Walk the talk
    2. A focused leader & a coachable team
    3. Scalability

3. Know the terms of the Term Sheet

Once you’ve gotten a VC interested in your startup, the next step would be to sign a Term Sheet. The Term Sheet sets out the offer from the investor to a company to purchase shares in the company. While the Term Sheet itself is not legally binding, it serves as an essential document that helps both your startup and the VC reach preliminary and conditional agreement on key terms of the investment during the negotiation stages. It is thus important to look out for the following key clauses in a Term Sheet:

      • Type of share – the voting and financial rights the investor’s shares have;
      • Power for the investor to appoint a director to the board;
      • Valuation of the company – the “pre-money valuation” will usually determine the price per share that the new investor will pay and the “post-money valuation” is the valuation of the company after the investment has been completed;
      • The fully-diluted number of shares in the company. This will usually include shares that have been issued, shares allocated to an option pool, and any other shares which the company could be required to issue through options, warrants, convertible debt, or other commitments;
      • Option pool of shares – whether there are shares set aside for employees or other investors;
      • Full investment on completion date versus the investment being made in stages over a period of time (tranches), and any technical and/or commercial conditions (milestones) to be met for each tranche;
      • Anti-dilution provisions to protect the value of the investor’s stake in the company;
      • “Tag-along” and “drag-along” rights;
      • Liquidation preference – if the company is liquidated, whether the investor receives an amount from the proceeds before other shareholders;
      • Restrictions on how shareholders can deal with their shares if they leave the company within a certain time, and non-competition restrictions on founders; and
      • Who pays the investor’s costs.

It is important that you understand what all these clauses in a Term Sheet mean. For instance, a “drag-along” right means that minority shareholders are required to join the deal when a majority shareholder sells his stake. In contrast, a “tag-along” right means that where a majority shareholder chooses to sell his share, minority shareholders have the right to join the deal and sell their share at the same terms and conditions as the majority shareholder. In order to be best prepared, it is a good idea to define your optimum, desirable and essential output in advance.

      • Optimum: This is the best outcome of the negotiation and should be your opening position.
      • Desirable: This is the outcome you expect to obtain from the negotiation.
      • Essential: This is the bare minimum outcome you are ready to accept from the negotiation.

Source: The Startup Factory

A comprehensive understanding of the terms of the Term Sheet will allow you to appreciate the interest the VC is protecting when pushing for a particular term, and easily assess whether the term is favourable to you.

Related reading: Funding via Convertible Note, Explained

4. Size up the VC

As much as the VC is sizing you up to determine whether to take the risk on you, the negotiation process is also an opportunity for you to evaluate the VC firm to determine whether it aligns with your goals and anticipate potential challenges in the future. There are four key questions you should pose when evaluating a VC:

      • What is the VC’s track record? While many entrepreneurs treat a VC firm’s brand as a proxy for performance, you should look at the actual performance to evaluate its track record. VC funds should be able to generate minimum venture rates of return. Also, look out for the timing and size of the last fundraise.
      • How much money is the VC personally investing? When VCs increase the amounts they invest in their funds, this signals more personal confidence in their own performance and generates better alignment with their investors and portfolio companies.
      • How big is the VC fund? At larger VC funds, partners get high salaries from fixed management fees regardless of their investment performance.
      • Do you have a list of portfolio company CEOs? Do a reference check by talking to three to five other CEOs the VC has invested in. Ask about the VC’s level of involvement, contribution to Board dynamics and whether they were helpful to the company’s growth.

Source: Harvard Business Review

In your preparation for negotiations with VCs, it is crucial that you go through this due diligence process even though it is tedious.

5. Build trust before you ask for money

At the end of the day, securing funding from VCs is an imperfect science. Beyond evaluating how sound your financial proposition as a business is, VCs are also evaluating the business acumen and personal characteristics of the founding team. Having a VC make an investment in your startup is like formalising a relationship that has gradually been built over time. As in any relationship, it is thus crucial to start building trust early. According to a VC in San Francisco, the formula of trust comprises three parts: sincerity, reliability and competence.

Here are some tips for building trust with potential VCs:

      • Ask for advice. Seeking advice from someone signals that you are humbling yourself while elevating them to a position of authority, while subtly letting VCs know that you are raising capital without directly asking for it.
      • Establish common relationships. Look up shared relationships on Facebook, Twitter and LinkedIn and use this as a chance to build rapport.
      • Be conversationally humble. Learn to accept fair criticism.
      • Show that you know what you don’t know. If you receive a question that you don’t know the answer to, admit it and say you will get back to the VC.

Adapted from Harvard Business Review

As you can see, the process of negotiating with a VC requires both a sound technical understanding of your business and terms of the investment as well as good EQ to understand how the interests of the VC line up with yours. Above all, make sure you are well-prepared at every stage of the process so that you can approach the negotiations with VCs with confidence.

What are your tips for negotiating with VCs?

Share with us in the comments below!

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