Musings of a VC founder
28/11/2024
Dear Diary,
It is one of those countless sleepless night I am having since the founding of our firm. While we are never in better shape than now, I still feel the “slaps on my face” when we get rejections from co-investment schemes (to be fair, we do not have a lot of dry powder at the moment), getting snide remarks as an “investment club” that is not serious and doing things for fun (what?!) and ultimately paled in comparison to our monied peers who caught the rising wave of the industry earlier and had their representative investment successes through the rise of regional unicorns.
We entered into the fifth year since the founding of our firm. While we projected this year to be the year where our fund management firm’s revenue (not inclusive of carry) would finally match our expenses, we still missed our target, albeit, we remain healthily cash flow positive.
The founding team came from the same department in the same organisation within the leading IHL in Singapore. We are very different individuals. “One” is a veteran in the scene, with more than 19 years of experience under his belt (now 24 years), seen the nascent growth of a fledgling VC industry took shape and was instrumental in mentoring some of the household names among startups in Singapore and the region. “Two” came with corporate restructuring (as a lawyer and while working in a listco), general corporate management (at a listco), corporate finance (in private equity), fund management (private equity) and lawyering background who had at one point provided legal services to 30-40% of the VC fund management firms in the region. “Three” came equipped with engineering optimisation background, armed with a systematic approach to dissecting various aspects of businesses to optimise for results. “Four” came with a reputation of being everybody’s friend, likeable and agreeable in every way and had some years of VC fund investing and startup mentoring exposure through shadowing his father’s work as a LP in a famed VC Fund of Funds.
As active participants in the startup scene, our team has witnessed improbable startup miracles and have seen our fair share of startups with great promises crumbled. We thought we know something about picking the right horses, perhaps we really do, since our team’s track record prior to founding our own firm stands at 50% success rate for seed stage startups and more than 75% success rate for startups raising Series A and above. Our secret sauces: (1) “It takes a village to raise a child approach” where we find many industry friends and supporters to provide market access, first contracts and sometimes even key hires to the startups; and (2) building trust and rapport with founders so that we could make critical intervention when required through the help of our industry network.
We started our VC firm thinking we could translate the goodwill and relationships we had cultivated with investors and various institutions from our respective work stints at an IHL in Singapore focusing on nurturing and investing in startups. We couldn’t be more wrong.
Weeks before COVID-19 took the world by storm, we resigned from the comforts of our beloved workplace where many memories were forged, where we soldiered on, fighting the good fight among many student entrepreneurs. In a little badly lit dingy little office room we set up base at (Midview City), we received news on all US$15M pre-commitment pulled out from the fund just before we entered into lockdown in Singapore. To be fair, such commitments were secured too quickly (a little too fast to be true?), i.e. through 2 trips made by “Two” to link up with his monied friends from China and Hong Kong with term sheets signed. Worst, our landlord sold his office unit and we had 1 week to vacate the room.
Most among us were ready to throw in the towel and call it a day. “Two’s” career has been riddled with obstacles and near impossible challenges throughout and thought such setbacks are only normal and more will come. He encouraged and probably some would say, coaxed everyone to forge on. (to be continued…)
Musings From The VCs 