Key Takeaways From Venture Capitalist
On the 30th of July 2018, BLOCK71 hosted the SFF-MATCH Singapore Roadshow which brought companies and investors together to share insights on enterprise financing and learn how MATCH (Meet ASEAN’s Talents and Champions) connects ASEAN enterprises with global investors.
The roadshow had an impressive sign up of 350 attendees. For all those who missed it, here’s a recap of a night of good conversations around fundraising in Singapore.
What is MATCH?
As part of the 3rd edition of Singapore FinTech Festival (SFF) organized by Monetary Authority of Singapore (MAS), the Global Investor Summit returns an expanded component MATCH: Meet ASEAN’s Talents and Champions.
MATCH, powered by Ernst & Young and industry consortium including Enterprise Singapore, Singapore Venture Capital & Private Equity Association and Singapore Business Federation, will bring together the investment and ASEAN enterprise communities so that they can network and connect. Key highlights include MATCH Deal-making portal and MATCH conference.
MATCH Deal-making is a curated deal-making portal showcasing promising ASEAN start-ups and growth enterprises across all sectors and funding stages, with a view to match them with venture capital and private equity investors. This aims to enhance access to and quality of funding for ASEAN enterprises. The deal-making portal was launched in May and will close on 31 August 2018. Companies (including start-ups, SMEs, limited liability entities) and investors (including institutional investors, fund managers, family offices, angel investors and corporate investors) are encouraged to submit applications through this link: bit.ly/MATCHdealmaking
MATCH conference will be held on 13–14 November 2018 at the Singapore Expo, and will feature ASEAN-themed discussions and leadership dialogues covering topics such as future of ASEAN financing, enterprise value creation and exits.
The SFF-MATCH Roadshow featured presentations by guest speakers Eugene Tse, Director of Corporate Finance at Ernst and Young, and Doris Yee, Director of the Secretariat at Singapore Venture Capital and Private Equity Association (SVCA), as well as a panel discussion by notable figures experienced in the venture capital industry.
Key takeaways from the presentations:
Raising Capital for Growth
A sharing on insights in South East Asia enterprise financing landscape and raising capital
Speaker: Eugene Tse, Director, Corporate Finance, Ernst & Young
- Private equity and venture capital deal volume has spiked in the last four years. 2017, peak volume US$23.5 billion
- While some venture capitalists are interested in tech companies in the start-up stage, most prefer to invest in companies during their growth stage where they have a proven business model and are revenue generating.
- The ability of a start-up to generate revenue is a validation that the business works, it is not only about financial results.
- Investors have different preferences, be it for asset class or for certain types of industries. Thus it is important to know who you are pitching to in order to appeal to your investor.
- In a company life cycle, the types of funders differ for each stage.
- The early stage investors providing pre-seed and seed funding take on higher risk because the company has yet to build a track record.
- As the company enters into the growth stage, it becomes attractive to venture capitalists and private equity investors since these companies have demonstrated that the team is able to build a viable business with ability to scale. Some companies in the growth phase may also choose to raise funds through an IPO.
Some tips for entrepreneurs:
- Pick the correct advisors
- Prepare well
- Maintain momentum
- Deliver on promises, keep partners well aware
Pitching 101 — Debunking Myths
A sharing on useful tips on the how-tos of fundraising and pitching to investors.
Speaker: Doris Yee, Director, SVCA
- Myth 1: Angels vs VCs, Angels are easier to work with
While angels have less pressure to exit since they are managing their personal funds, most angel investors are usually not willing or able to participate in the next round of funding. Beyond financing, whether from angels or VCs, entrepreneurs should ask how their investors can assist them to grow their business.
- Myth 2: Pitch to as many as possible
Contrary to popular belief, it is not recommended to pitch your idea to every investor you meet.It dilutes the impact of your pitch and wastes precious time and energy. Entrepreneurs are advised to do their homework and target VCs who are focused on their industry/technology sector, stage and geography.
- Myth 3: Take the highest bid
While money is important when it comes to funding, it is important to carefully consider the terms and conditions that accompany the valuation before accepting the Term Sheet.
- Myth 4: Raise as much as possible
There needs to be a fine balance when setting targets for fundraising. What is important is to raise enough funds to reach the next milestone to show investors some visible progress between funding rounds. Based on SVCA research, 75% of businesses (upper quartile) operated less than 22 months between Seed and Series A funding rounds. Hence, a runway of at least 20 months is recommended.
- Myth 5: My business idea is unique
Due to the speedy flow of information and ideas, most business propositions have a degree of differentiation but are rarely truly unique. Beyond product/business innovation, other considerations by VCs include market size, growth potential, financial progress/projections, competition, environment and team. For early stage businesses, the team’s integrity, commitment and passion usually outweighs the other considerations.
Panel discussion and Q&A: Working with Private Equity & Venture Capital in Enterprise Value Creation
Speakers:
- Grace Yun Xia, Principal, Jungle Ventures, ex-Tencent
- Christopher Aw, Operating Advisor to Monk’s Hill Ventures, Managing Director, two3six
- Doris Yee, Director, Secretariat, SVCA
Moderator: Eugene Tse, Director, Corporate Finance, Ernst & Young
- Keep pitch decks succinct. What’s the problem that is needed to be solved? What’s the solution? What’s the team? Why is your team the right one? What are you asking for?
- Sometimes the entrepreneur is the one that matters rather than the pitch deck. Venture capitalists might want to know what kind of person is leading the project rather than the details of the project.
- Don’t wait till things get bad before contacting your investor. Regularly communicate with your investor for both good and bad news. Keep them in the loop. Let your investor know what kind of help you need. Be honest with the VC.
Watch the full video of the MATCH @ BLOCK71 Roadshow talks here:
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