No matter what you read in a textbook, there are still some questions that can only be answered from experience.
In this special feature by e27, we give student entrepreneurs and aspiring founders the chance to get their burning questions answered by the some of the most eminent VC investors in Southeast Asia: Michael H. Lints, partner at Golden Gate Ventures, and Binh Tran, partner at 500 Startups Vietnam.
Golden Gate Ventures is a Singapore-based firm which was founded by three Silicon Valley entrepreneurs in 2011 with currently over 45 portfolio companies across Asia.
500 startups is a San Francisco-based accelerator which also manages venture investments across 74 countries. Its most notable investments in Southeast Asia include Bukalapak, Grab and Carousell, to name a few.
Here is how it goes down:
What are some qualities you look for in a student entrepreneur if you were to invest in them? (Felix Tan, founder at Skilio)
Lints: We don’t make a difference between student entrepreneurs and other entrepreneurs. They must share similar values. Before investing, we want to understand if they can be a future leader of their company? Are they humble and willing to learn? Are they focused, and do we believe they have what it takes to execute on their vision?
What advice would you give a founder who is still in the development phase of their product to persevere through the pandemic? (Vaibhav Sen Malla, Pennsylvania State University)
Tran: If you still have a day job, keep it. Don’t quit until you’ve released and seen some early validation that your solution is working. No one can read the future, and during a downturn, investors are not just looking for great ambitious ideas, but also for lots of traction.
Expect fundraising to be more difficult now than before the pandemic so the more you can execute without dependence on outside capital, the more options you’ll have.
Even if you’ve dedicated yourself to your startup, my advice is similar except that you should have a heightened sense of urgency. Release what you have, learn from observing your users, make necessary changes, and repeat.
If after a few iterations you’re finding that your changes are not helping you find traction, don’t be afraid to make bolder changes and even consider a product or business model pivot. Seeing the process of how founders execute, learn, and adapt, especially during a crisis such as COVID-19, is a significant factor when investors evaluate deals.
If I want to start a company, what is the ideal path after completing graduation? (Shubham Raut, University of East London)
Lints: Just start. When it comes to entrepreneurship, there is no ideal path because things will change all the time. Most important is just to start. Once you have clarity around your idea, it comes down to execution and the willingness to throw the idea in the bin if it doesn’t work out.
The good thing about getting started is that it gives you the best feedback ever. If your consumer doesn’t like the idea, they will let you know immediately. It allows you to iterate and improve.
Which aspects of a business model are most important to a VC considering from a long term investment point of view? (Smit Ojha, University of Newcastle)
Tran: Founders must be reminded that not all successful businesses need venture capital and that other sources of capital exist outside of venture capital. That said, not having a scalable business model in a rapidly growing market is the most common reason for rejections by VCs.
Ask yourself, “In five years, can my company reasonably make US$100 million in annual revenue?”. If your answer is yes, but your plan to achieve that goal depends solely on execution or only by offering better pricing, that would not be an ideal strategy for most VCs.
In that case, angel, strategic, or private equity investors might be a better match for capital sources. In venture capital, the path to growth and scalable revenue often depends on uniquely differentiated advantages such as new technology or early mover advantages.
If you can demonstrate those advantages while showing a path to rapid growth and scalable revenue, you’ve cleared a couple of the many hurdles in unlocking venture capital.
How can a student entrepreneur display their credibility while raising funds as a student? (Zhi Hui, founder at Skilio )
Lints: No different than regular entrepreneurs. Show the willingness and capacity to win the market your in. Provide insight into why your idea is more valuable than other ideas. Show investors, you have done your homework properly when it comes to the tech you’re building or the industry you’re trying win over. It’s not always about traction. Some entrepreneurs raise money at a really early stage because they were very diligent about presenting their idea and doing research on the market.
What are some actionable ways I can build my network to reach out to VCs while still studying? (Diyanne Kassim, Singapore Management University)
Tran: First, build a list of VCs that you care about. You’ll have a better chance connecting with seed stage investors than with Series A and beyond. This is because investors focused on Series A rounds and beyond typically are looking for companies that have revenues north of US$4 million and tend to be less engaged with new and inexperienced founders. Find a list of funds whose AUM is under US$100 million as most seed investors have funds well under that amount.
Here is one
list and
another to get you started. Go to the websites for each fund, look at the profiles of the investors, and find tidbits of information that might connect you. This might be a shared alma mater, hobby, or belief. Curate a list of VCs you want to connect with but limit it to less than ten because the quality is better than quantity when it comes to relationships.
Second, ask if anybody within your network is connected to these people. For those without common connections, you’ll need to cold email. Craft a personal and sincere email for each investor and forward to your common connection, asking for an intro or send a cold email.
Be concise and very specific about what you’re asking for in your email, whether it be simple career advice or an invite to talk to the school’s entrepreneurship group and include specific next steps. For example, if the next steps involve a call, give the investor several 30 minute times that you’re available for them to choose from in the timezone that is friendly to the investor. Be respectful of their time and make it easy for them to accept, and you’ll have a VC network in no time.
Also Read: Why should universities teach blockchain to students?
Does dress code matter while pitching? (Arbaaz Iqbal, SP Jain)
Tran: Within that first 60-minute meeting, investors are trying to understand your mindset, values, and motivations quickly, so it’s essential that you’re as authentic as you can be.
Your dress code should closely represent your default setting, whether it be a suit or jeans and a T-shirt. You’re not selling a product or service but rather a version of yourself and investors want to meet the real you. So no, the dress code doesn’t matter.
What are some behavioural differences between VCs in different regions? For example, Southeast Asian VCs compared to American VCs? (Victor Han, National University of Singapore)
Lints: The most significant difference for me is the ecosystem they operate in. The US is way more mature when it comes to tech investments. The ecosystem, therefore, is more competitive. Southeast Asian VC is still very collaborative.
If a student with no credible background wanted to catch up with a VC over coffee, would he be willing? (Jovan Lee, Nanyang Polytechnic)
Lints: Ha! Define credible? To me, it’s about how you approach a VC. Asking someone for a coffee without a clear plan is a waste of everyone’s time. Don’t immediately ask the coffee question but try to gauge if there is a sincere interest in a conversation.
Tran: Contrary to popular belief, most VCs I know work a ton of hours and have very little work-life balance. Aside from talking to new founders, VCs have to spend time with their team, limited partners, and the founders with whom they have already invested. This leaves very little time for anyone else.
However, I believe experienced professionals from all industries, not just venture capital, should take the time to mentor juniors and give back to their communities. So don’t hesitate to reach out to VCs.
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