Singapore's decade-long push to become a hotbed for entrepreneurs is stuck at stage one.
The city-state of 5.3 million people ranks No. 1 in the world in ease of doing business and fourth in starting one, according to a World Bank study. It offers low taxes, easy-to-obtain seed money to start a business, and a well-educated, English-speaking workforce in the gateway to Asia.
It just takes one day and S$315 to register a business in Singapore. Yet, the country has struggled to attract international investment money for its own start-ups.
Venture capital firms are put off by the small size of the market, lack of big ideas that can be a global success and an uncertain exit strategy. Only 50 out of 301 venture capital firms based in Singapore are interested in local investment, according to the Asian Venture Capital Journal Research.
Of the 70 high tech start-ups the government has invested in over the past two years, just 10 received follow-on private funding from investors locally and abroad, according to the National Research Foundation, the government arm responsible for research and development.
"There is a real shortage of venture capital firms investing in Series A in Singapore," said Leslie Loh, an entrepreneur-turned-investor, referring to the first round of funds raised by start-ups after seed capital.
"VCs are looking at countries like India and China where there is a larger domestic market."
Only 2 percent (about S$18.3 million) of the total venture capital investment in Asia is aimed at Singapore, according to Asian Venture Capital Journal Research's data for 2012. Japan, China and India topped the list of big VC investments in Asia.
"In the early stage there is a big push (by the government). But if you look at the whole ecosystem for helping companies grow, there is a gap in the growth stage," said Wong Poh Kam, a professor at National University of Singapore's business school.
"For a Singapore company to be able to achieve global success, it needs to have sufficient follow-on venture capital funding."