Venture Capital in Indonesia: Landscape & How to Start

Obtain Funding

Financial assistance is critical for new enterprises in Indonesia. They require the initial funds to publicize their firm, hire workers, and meet other early-stage business requirements such as asset acquisition.

Risk spreading

Venture capital in Indonesia assists new enterprises in spreading their risks. It means that when investors and business angels offer their private shares, when they are joined to the owners’ share, they would suffer losses proportionate to their participation. Losses that are not reduced by venture capital are generally too expensive and dangerous, discouraging new enterprises, particularly in highly competitive fields.

Improve Management

Venture capital organisations provide future enterprises with not just financial assistance but also managerial expertise. This is due to the fact that the management and inclusion of workers are critical to the firm’s success.

Plan

Venture capital firms assist in the planning process. A business strategy can be tedious and difficult for a new business. Proper planning and operational strategies are required for the processes of developing ideas, managing people, and operating assets. Venture capital businesses can help in these situations.

Talent Development, Economic Development, and Innovation

The Internet economy is expected to grow to US$100 billion by 2025, according to Google-Temasek. Jakarta, the country’s capital, is a Southeast Asian startup hotspot.

Data management and mining

Because of the world’s desire for technological advancement, there is a demand for innovative ideas that require funding. The market size increases when a concept in the realms of Internet and other technology areas that Indonesians are interested in pursuing comes to fruition. FinTech is one of the most popular topics, according to Sebastian.

Existence of wealthy individuals or groups

The existence of these able and willing individuals in Indonesia has also been one of the reasons for the growth of venture capital firms. Because venture capital comes from individual wealthy investors who are willing to sponsor sprouting ideas with the potential to gain market penetration, the existence of these able and willing individuals in Indonesia has also been one of the reasons for the growth of venture capital firms in Indonesia.

An increase in the number of new businesses

Finally, Indonesia is seeing an increase in the number of startups, particularly those involving the Internet and technology, which require funding in their early phases. Many Indonesians are experimenting with new ideas, which has resulted in the growth of venture capital firms.

Registration of business 

The initial stage to starting not only a venture capital firm but also any company is registration. The process confirms the business’s capabilities for operation, and it also assures the authorities that the firm intends to operate within the stipulated country’s requirements and that it will not engage itself in other illegal businesses which are in breach of the law.

Furthermore, registration will prove that the company pays its taxes to the Indonesian government as per its declared profit.

Investment plan

Planning is critical for successful operation. To gain access to the Indonesian venture capital investment as a foreign investor, one has to present a plan of not less than US$1 million. Out of this, 25% must be paid-up capital, which does not have to be in the form of cash. Proper planning will equally lead to success in this regard.

Shareholders 

To get the firm running, there must be at least two shareholders. Through this, the firm’s stability is assured, and legal procedures to funds’ access are more likely to be transparent for smoother operations and management.