It was a heated topic of discussion in Mar 2013, where an article called “i.JAM revamp?…” from SG Entrepreneurs summed up the articles written “i.JAM needs to be sweeter” by Murli Ravi and another by Jeffrey Paine of which I had no ability to read due to a password protection.

There were many points from the articles I read, but the focus  I wish to highlight in this article is the $1,000 allowance/salary a month that the i.JAM Reload Tier 1 grant has set on the founder. If you wish to know more about the founder’s allowance, you should get a good idea after reading the articles that I have highlighted above.

AGA has to date reviewed over 90 applications since we started in July 2012 and likewise, we faced a series of challenges in obtaining Tier-1 approvals from MDA IDMPO. But to their credit, I am very proud to have worked alongside with them. Despite the lengthy and detailed submissions, the team at MDA IDMPO have not fallen short of being supportive, superbly efficient in their administration and helpful in many ways than one.

So with this understanding in place, let’s talk about the $1000 allowance.

I can confirm with you that any entrepreneur who wishes to sign up for the i.JAM Reload Tier 1 funding can get access of up to S$50,000 in claims. In this Tier-1 claim, entrepreneurs are only granted S$1000 allowance per month if they commit 100% of their time to the project. No allowance can be claimed for non full-time entrepreneurs.

It is without a doubt S$1000 can barely pay for much for an entrepreneur. With food and travel expenses alone, you can jolly well forget having any extras to survive. You might even have to cough up your own extra cash to pay for the expenses.

Does that suck? Totally! But is that part of entrepreneurship? Totally! I was reading up on the humble beginnings of, where the founders literally received NO PAY for the first stage of their start-up. These 3 Singaporeans, of which one founder is an old schoolmate of mine, let passion drive them to succeed. I used to joke that when they had no money and were hungry, they had no where to go!

These entrepreneurs aren’t alone. There are endless stories of how many entrepreneurs, here in Singapore and worldwide, who had no income for many months before seeing a turnaround. I myself had that same situation when I first started out.

Entrepreneurship is not a step-up to your career. I had an applicant who came telling me that he will start his start-up if it pays him $300 more than his last job. He told me his new wife will kill him if he took any pay cut. I politely reminded him that entrepreneurship is about risk-taking and not expecting life to be rosy with a cushy increase in income. We all want to succeed in life, but entrepreneurship is high-risk, high-returns. You need to accept the high-risk reality of entrepreneurship.

Entrepreneurship is about preparing for it and getting support, emotionally and financially. Every time before anyone who plunges into entrepreneurship, they need to ask themselves first, do they have a minimum of 6-12 months savings, as well as the support from their families and loved ones? Entrepreneurship isn’t a solo mission, but having the support of loved ones. It is a high-risk step and you need to ensure you have your pillars ready to handle the unexpected.

Tier-1 should not extend beyond 6 months. The objective of Tier-1 funding has to be re-iterated. Tier-1 funding is only meant to get the entrepreneur to develop a minimum viable product. It is not meant to be a long-term goal to give the company consistent funding. That is why there is a limit on the founder’s allowance. If you think about it, if there are 2 founders who claim S$1k each for 6 months, $12k is already paid out to the founders, which leaves very little left to do anything else. If founders focus on claiming more allowance and having little funds to do anything else, you would question the objectives of the founders.

i.JAM Reload is a grant, not investment. It is also a misconception that i.JAM Reload is used as part of the investment, ie, the total S$150k grants from MDA is included as part of the investment quantum. I can confirm that at AGA, we do not include the i.JAM Reload grant as part of the investment. This grant belongs to the start-up and we do not lay claim to it in return for shares. The only claim we make is the S$100k investment we make at Tier-2. Basing on this, entrepreneurs must remember that the founder’s allowance is a grant. Grants have their specific restrictions to ensure a specific direction and objective is achieved.

i.JAM Reload is Singaporean taxpayers money. For those who have not understood the recent climate, the Singapore government is now, more than ever, very particular on how taxpayers money are being used. There have been way too many cases of fraud and embezzlement of government fund. As a Singaporean myself, I hold the government accountable to the taxes I pay. So if you find the applications tedious and detailed, do remember that applicants are taking funds from Singapore. And here in Singapore, we are detailed in the usage of public money.

I hope this helps de-mystify the $1000 allowance per month for founders. I do hope that with this, we will see more applicants coming forward with a better understanding of how the grant works. Here’s wishing all entrepreneurs the best in your endeavours.

Christopher Quek is a resident mentor at AGA. This was drawn from his blog.