The Startup Rojak, held at The HUB (Singapore) on Thursday 30th May, hosted a panel of three experienced Venture Capitalists (Frank Lee, Wayne Goh & Anand Govindaluri), for a question & answer session providing startup advice to wannabe Entrepreneurs and new startups. There were lots of insights, but a few really stood out.
Question: What advice would you give to an entrepreneur sending you a pitch?
Answers: From all the discussion on this point, the essence really boiled down to the following key points:
- Don’t send 60 page business plans, especially not by courier
- VC’s only get about 3 pages in, if they’re not excited, they won’t read the remaining 57 pages
- Presentation is important, it should be punchy & concise and convincing
- Know the VC & tailor your pitch to them. A generic (spam) pitch is obvious and will be ignored
- Don’t request for meetings without giving any information on who you are or what you’re doing, they’ll probably just say no
- Ensure that your project matches the interests of the VC you’re approaching, otherwise you’re wasting everyone’s time
- People are really important, VC’s invest in the team as much as they do the idea
Question: What do you think is important in a good startup team?
Answer (Anand):
- Diversity (not purely technical, or purely sales, etc.)
- An appetite for risk
- Teams that have a good dynamic & gel well together, preferably that have experience together
- A solid awareness of the macro landscape & the landscape of their industry
- Teams with good advisors
Question: What does scalability mean to you?
Answer (Anand):
- The team’s end goal defines the upper limit of where the business will scale to, it’s where they want the project to be in 5 years
- A realistic understanding & optimistic vision of how the business can be grown
- Services are fine, as long as they demonstrate clear competitive advantage or disruptive innovation (ie: reducing a service delivery processes from 13 steps to 6 steps, it’s still a service, but best of class and defensible knowledge)
Answer (Frank):
- Directly scalable production capabilities, preferably products
- Services might be good lifestyle businesses, but it’s rare that they are scalable
Answer (Wayne):
- We’re all about software, because it’s scalable.
- Ask how you’re going to penetrate certain markets, analyse your knowledge & plan of attack for them
- Software, software, software.
Questions: Is a previous “failed” startup a red flag for an investor?
Answer:
- Only if you think it’s a red flag, we see startup experience as beneficial, but you need to demonstrate an understanding of what went wrong – and what you’re doing differently.