Backed by strong investors and business partners, home-grown digital music provider enjoys regional success and now eyes US and UK markets.

The founders of Soundbuzz had a vision. They wanted to be the first digital music provider in Asia. This was an ambitious, exciting dream. It was also going to be an expensive one. Heavy investments in technology and music licenses had to be made. With limited capital, who could they approach to find the funds to bankroll their ideas?

Impressing Investors

Simon Lower, Soundbuzz’s Co-founder and Director, knew that a strong management team and a good business plan were crucial when seeking funding. Fully prepared, Soundbuzz approached the NSTB’s investment arm (now TIF Ventures, part of the EDB’s investment arm) in 1999 at an NTSB-organised networking event. Through the event they were introduced to a group of angel investors that, in addition to TIF, would fulfil Soundbuzz’s first round of financing.

Having made a good first impression on TIF Ventures, they managed to book a formal meeting with the angel investors to present their business plan. A representative of TIF said, “We invested in them because they had a winning formula and an experienced, passionate team that had the vision to go abroad. We believe Soundbuzz will be Asia’s iTunes.”
 
Pricing The Investment

Simon recalls the negotiations: “Valuation was not foremost in our minds. We were realistic about being a new, unestablished company.  Getting investors was not just about capital, but also having an invaluable group of advisors that would endorse us and help take Soundbuzz to the next stage.”

From then on, things began to fall into place. The next year, Soundbuzz was able to attract one of the biggest players in the personal digital entertainment industry – Creative Technology. Creative has since made a second investment and is a significant shareholder in Soundbuzz.

Investors as Strategic Partners

Simon says, “We chose equity financing because, in addition to capital, it gave us access to strategic partners that would help grow our business significantly. In terms of internationalisation, having a company like Creative as a significant stakeholder gave us a natural advantage when venturing abroad.”

Soundbuzz has offices in Singapore, Australia, India, Hong Kong, Taiwan and China, making it the only pan-Asian digital music retailer. It is now entering the US market through its online music store that is being distributed through Creatives’ mp3 player product line.

Strategic planning before entering a new market or business is vital, says Simon. Knowing the market opportunity, the kind of investment required, the product that you intend to sell are all questions that need to be addressed for businesses and investors alike.

Simon advises, “Enter a new market on the back of a client or partner. It’s obviously much harder to start from ground zero. For instance, entering the US market would not be half as attractive to us or investors without a partner like Creative.”

A Strong Management Team

Simon has these words of advice for start-ups looking to raise equity funds: “Having a strong management team is vital in earning the support of a p