I attended the Cyberjaya Startup Summit 2018 (12 - 13th May 2018), organized by the Launchpad CyberJaya and is the first of its kind in the series to come.
Here are the few critical things I have learned from the summit.
I.) In Malaysia, angel investor's fund is usually a small one, between RM 20k to RM 150k and the investor may request for 8% to 10% of stake.
This contradicts my belief that angel may invest generously using the benchmark from the Sillicon Valley of USA which is USD 100k for 10% stake, lest RM 150k for 10% - I was wrong.
II.) Most angel funds are parked under incubation and accelerator program. These are the few to begin with:
III.) Angel's funds are usually meant for testing of prototype and marketing purposes – do not rely on angel funds for paying the salaries of the founders – you must survive on other means.
Nonetheless, I think the funds can be used for the following purposes:
IV.) Incubation and accelerator program requires full time participation by start-up's founders.
V.) Venture Capitalists (VC) are not philanthropists - even though some tend to be both. They may be able to serve as a great mentor to your business, but they are here to make money by investing in you and they are serious about getting the money back at all cost.
Therefore, whenever you do seek a VC funding, make sure your shareholding will make money out of the investment because the VC will take the boss out of you from the company - make sure you negotiate the deal to include profit from your shareholding - they are here to make money, hence, pitch them profit, not passion.
In retrospect, angel investors may fund you based on your personality and passion.
VI.) Mr. Andrew Tan of TinkBig Ventures gave the best advice for starting up and seeking funds. He said these:
VII.) Mr. Khailee Ng of 500 Startups said that now is the best time to start a start-up because there is seemingly a proliferation of funds around us.
He gave 5 tips:
VIII.) Young people and older people are starting and joining start-up companies because it seems to promise a better opportunity to contribute to the society on top of an on-par salary.
Besides, working in a start-up company may help to accelerate your career because one might have the opportunity to start as a software engineer and be promoted to software architect within a short period of time – something which is not quite possible in the corporate space.
VIV.) Ms. Noomi Fessler of Nexea explained the start-up criteria for her firm:
X.) There was however a disparity of VC ideology between Mr. Andrew Tan and Ms. Noomi Fessler, that is Noomi was very focusing on disruptive ideas while Andrew preferred the proven and mass market portfolios.
Nonetheless, both agreed that they are founder’s friendly.
Conclusion:
The Start-up culture is pretty much a young men’s game, the same trails back to the Silicon Valley, USA where it all started.
However, if you are a 40 something odd and wish to do start-up, the following may work for you:
 |
| (L-R) : JFK (host), Andrew Tan (TinkBig Ventures), Bikesh Lakhmichand (1337 Ventures), Nizam Mohamed Nadzri (Malaysia Debt Ventures), Noomi Fessler (Nexea) |
Here are the few critical things I have learned from the summit.
I.) In Malaysia, angel investor's fund is usually a small one, between RM 20k to RM 150k and the investor may request for 8% to 10% of stake.
This contradicts my belief that angel may invest generously using the benchmark from the Sillicon Valley of USA which is USD 100k for 10% stake, lest RM 150k for 10% - I was wrong.
II.) Most angel funds are parked under incubation and accelerator program. These are the few to begin with:
III.) Angel's funds are usually meant for testing of prototype and marketing purposes – do not rely on angel funds for paying the salaries of the founders – you must survive on other means.
Nonetheless, I think the funds can be used for the following purposes:
- Product testing
- Marketing - including making Youtube video, subscribing to Facebook and Youtube advertising
- Technology licensing - cloud A.I, hardware, infrastructure
- Graphic design
- Web page development
- Office rental.
IV.) Incubation and accelerator program requires full time participation by start-up's founders.
V.) Venture Capitalists (VC) are not philanthropists - even though some tend to be both. They may be able to serve as a great mentor to your business, but they are here to make money by investing in you and they are serious about getting the money back at all cost.
Therefore, whenever you do seek a VC funding, make sure your shareholding will make money out of the investment because the VC will take the boss out of you from the company - make sure you negotiate the deal to include profit from your shareholding - they are here to make money, hence, pitch them profit, not passion.
In retrospect, angel investors may fund you based on your personality and passion.
VI.) Mr. Andrew Tan of TinkBig Ventures gave the best advice for starting up and seeking funds. He said these:
- Do not celebrate on fund raised – the business of your start-up is not to raise fund
- Invest own money into the start-up
- What is your unfair advantage?
- Who are your early adopters?? Penetration strategy??
- You need some money to run start-up – always be prepared never to receive any fund
- Backup ideas with data – do survey, talk to people etc – the best is to have real-life experience.
VII.) Mr. Khailee Ng of 500 Startups said that now is the best time to start a start-up because there is seemingly a proliferation of funds around us.
He gave 5 tips:
- Build talent instead hire talent – train people up instead of trying to hire the best talent
- Secure customer acquisition channels instead of waiting for organic customers to come- setup a sales team earlier on
- Raise fund earlier and larger at early stage and not vice versa
- Scale yourself instead of hustle till you drop – work smart and maintain healthy work culture including maintaining the best of your physical health
- 80:20 for innovation – focus on your core before investing too much into future projects.
VIII.) Young people and older people are starting and joining start-up companies because it seems to promise a better opportunity to contribute to the society on top of an on-par salary.
Besides, working in a start-up company may help to accelerate your career because one might have the opportunity to start as a software engineer and be promoted to software architect within a short period of time – something which is not quite possible in the corporate space.
VIV.) Ms. Noomi Fessler of Nexea explained the start-up criteria for her firm:
- The pain point must be VERY painful
- Disruptive – the solution must be able to disrupt the industry 10 times or more
- Solid and proven monetisation strategy
- RM 100 million revenue potential.
X.) There was however a disparity of VC ideology between Mr. Andrew Tan and Ms. Noomi Fessler, that is Noomi was very focusing on disruptive ideas while Andrew preferred the proven and mass market portfolios.
Nonetheless, both agreed that they are founder’s friendly.
Conclusion:
The Start-up culture is pretty much a young men’s game, the same trails back to the Silicon Valley, USA where it all started.
However, if you are a 40 something odd and wish to do start-up, the following may work for you:
- Your idea must solve a problem – try to focus on something which you have knowledge in or something grows out of personal experience
- Invest own time and money to build the prototype without seeking funding
- As soon as you have some traction, start the marketing by attending conferences and events – make sure you print your own T-shirt and business card
- Pitch to everybody, try to explain your start-up idea in 15 seconds
- If you can attend incubation and accelerator program (full time), go for it, otherwise skip - it will help with networking and may connect you to investors and talents and customers, asides from getting honest mentorship
- Seek angel fund not for your salary, but for other expenses such as marketing, refer to point III
- Most of the time, angels are from VC background
- Seek VC only when your company is worth something in that your stake allows you to make some money; to earn back what you have invested to the least.
- You MUST be able to survive before you make money from the start-up.
Comments