The situation
The client was the founder of an expanding SaaS company planning on raising an institutional seed round.
This company had been set up in a straightforward founder-owned structure initially, which was no longer sufficient due to negotiations being undertaken by the company with outside investors. This meant that there was a need for an improved structure that would allow a distinction between ownership and management and be conducive to further shareholdings.
Requirements were to:
- create an operating company in Singapore;
- concentrate ownership at the holding company level;
- structure for future investor involvement;
- conduct all operational agreements and commercial activity in the Singapore company; and
- create better corporate records before furthering the fundraising process.
What we set up
Following an assessment of the business model and fundraising plan, OCC proposed the use of a two-entity setup that had the structure of a BVI Holding Company and a Singapore operating company.
The BVI company was incorporated as the parent company for the Singapore company, and the latter entity was used to carry out the daily operations of the SaaS business.
BVI holding company
The BVI company was incorporated in order to hold the ownership interest of the founder. This helped develop a clear structure of ownership in preparation for investor discussions.
Operating entity in Singapore
The Singapore entity was created as the primary operating company of the group. It was used to conduct commercial agreements, relationships with clients, expenses related to operations and other activities in connection with the operation of the SaaS company.
Corporate documents and restructure support
OCC assisted with the incorporation and ownership structuring of both companies, which included corporate documents, shareholder documents, and group structuring.
This process was completed in 21 days, which made it possible for the entrepreneur to start fundraising talks.
The result
With the new structure now in place, the founder was able to move on to seed-round preparation with ownership and management activities separate.
The Singapore corporation remained responsible for the commercial activities of the SaaS business, while the BVI corporation acted as the holding corporation for group ownership.
In just four months from when the restructuring was completed, the client was able to:
- complete the group restructuring before commencing investor due diligence;
- transfer 100% ownership of the Singapore operating company to the BVI holding company;
- organize company documents in both corporations in one ownership structure;
- conduct due diligence with three potential seed investors; and
- reduce corporate restructuring items in the initial investor diligence process.
Year-1 setup and service fee: US$10,500
“Once our company structure was in order, we could have those talks with investors. One of our IBCs assisted us in establishing an orderly structure of our holding and operating companies so that we could proceed with due diligence.”
SaaS Company, Singapore
