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Easy to invest. Impossible to exit?

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Investors are living through the most exciting time in 400 years!

Is Entrepreneurship about Invention or Innovation?  If you watch any of the Dragons Den type shows on TV you would be forgiven for thinking that the way to become an entrepreneur is to invent a new product.  Look through history and it is littered with inventions that have changed the world.  As Emerson is reputed to have said ‘Build a better mousetrap and the world will beat a path to your door’.   Yet not only do we no longer live in the sellers market that Emerson did in the in late nineteenth century, the reality is that just like a ‘better mousetrap’ entrepreneurship is about refining what has gone before to create even more value for others.  Any investor that is waiting for the perfect invention, is in for a long wait.

In February 2018, over a thousand of the top entrepreneurs and investment professionals from around the world are going to be gathering in Istanbul, Turkey for the annual World Business Angel Forum.  This years topic is Innovation.  While innovation is most definitely at the core of entrepreneurship it is an area that has been sadly lacking in finance and investing.

Fortunately that is changing and we are in the middle of probably the most exciting changes in investment and funding since the Dutch East India company decided to sell shares to the public in the 1600’s.  This means that listening to and learning from the best thought leaders in this area from around the world will be critical to seeing where the market is going next.

Innovation typically takes 3 forms.  Incremental, Disruptive and Radical.  As far as investment for startups and early stage companies, the last few years has most definitely touched all three of those areas.  Whether it is crowdfunding, the rise of Angel investing, or the recent flood of money into Initial Coin Offerings (ICO’s), the world of early stage investing has changed beyond recognition in the last 10-20 years.

Yet there is also change at the other end of the equation.  No longer are companies in a hurry to go public.  IPO’s are down 50% from 20 years ago meaning it has never been easier to invest in a company, yet conversely it has also never been harder to exit.  Secondary markets and innovations like Agglomeration have popped up to serve both the entrepreneur and the investors who wish to support and profit from them.

Governments, policymakers, and key players of the equity markets will gather for WBAF 2018 and will be focusing on building partnerships, fostering connections, and discussion of democratising access to finance.  Whether you’re an entrepreneur or an Investor it is time to get innovative and get yourself to Istanbul.

Where:  Istanbul, Turkey
When:  18 – 20th February 2018
How:  Tickets at http://wbaf2018.istanbul/

World Business Angel Forum is an official partner of AsianEntrepreneur and supports Entrepreneurs around the world.

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

Investors

Victor Tan

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Victor Tan enjoys working in the start-up sector. His passion is to help SMEs and start-ups grow.

What’s your story?
I was born in Singapore. I moved to Australia for the majority of my life and I have now been back in Singapore for the past 6 years. Currently I am the CFO of Unity Group, which is a boutique merger and acquisition advisory firm. I have been in the big corporate world for the about two thirds of my career and for the past 5 years I have been involved in the start up and SME space.

What is your involvement with Investment?
My biggest investment is my time and positioning my career to focus on the start-up and SME sectors.

How did that come about?
A couple of reasons:

  1. I loved the big corporate world and the skills I Iearnt in that world. However I felt that I was wanting more and I wanted to really contribute and impact on the success of a business. In the SME space, every staff member is important and every contribution impacts the business in many ways. In the corporate world, sometimes you just feel like one of the many cogs in the wheel.
  2. SMEs are typically the forgotten businesses in the world. Everything is up against them even though SMEs contribute the highest % of their profits in taxes in all developed countries in the world. However, they are undervalued, lack the ability to grow and raise funds.

What are some of the key things you have learnt about Investing?
Establish your strategy and stick to it.

What mistakes do you see less experienced investors making?
Speculative trading or getting rich quick. There are no quick wins. It all comes down to believing in your objective or strategy, working hard, sticking with it and being adaptable to change.

What mistakes do you see Entrepreneurs making?
Surrounding themselves with advisors that are “yes“ people who do not add value. Typically entrepreneurs are full of passion and sometimes that passion and emotion clouds their ability to make good decisions. Advisors around entrepreneurs, whether they are the GM, CFO or legal counsel, need to assist the founder of the business to stay on the same path but at the same time give the founder room to breathe and be creative.

What’s the best piece of advice you ever received?
You have to work hard and smart.

What advice would you give to those seeking funding?
Product and data, data, data! Product or goals need to be defined, broken down and measured from the outset. That’s the only way of defining success (whether its based on revenue, profit, number of customers, etc) and it sets a performance-driven culture. The qualitative component of the product or goal is equally critical to ensure business performance and correct culture. Once these are defined and measured, it demonstrates your ability to define and measure the performance. This directly applies to seeking funding for your business. Without any quality data, investors are unable to assess the progress or viability of the product and also the future potential growth of your company.

Who inspires you?
My dad. His ability to rise to the top of his profession and give it all up for us kids.

What have you just learnt recently that blew you away?
A quote from Malcolm X, “There is nothing better than adversity. Every defeat, every heartbreak, every loss contains its own seed and its own lesson on how to improve your performance the next time.”

What business book do you recommend the most?
Unfortunately I don’t read books.

Shameless plug for your business/organisation:
The team at Unity really believes in supporting the SME sector and changing the landscape for small businesses around the world to enable small businesses to compete with the big boys, win bigger contracts and reward those that are creating the most value in the world.

How can people connect with you?
LinkedIn: http://linkedin.com/in/victor-tan-22880535

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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Investors

John Sharp

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John Sharp gets a buzz from bring something new into the world!

What’s your story?
I started my professional career as an orchestral arranger and composer in Adelaide, Australia. Software rendered my chosen profession obsolete within a few years and pushed me down the path of networking and software. I built a Chinese language TV network, ran the Asian market for the world’s biggest ever startup, US-based WorldSpace, (where we raised 1.8 billion in our seed round) and then I built and sold a US-based cybersecurity company, when Google was telling you it’s scanning your email for viruses. We built that! In 2010, I moved back to Singapore from Florida, which is just like Singapore, with less cobras and more alligators!

What is your involvement with Investment?
I co-founded Hatcher along with seven other investors in 2013. Since then me and my fellow investors have made 21 investments in 13 companies – one of which I now work for, Hatcher+. Hatcher+ is a new AI and machine based learning platform for venture investment that has plans to make 2,000 investments over the next 3 years.

How did that come about?
I have been building and selling companies all my life. My first investment was an Asian digital sample library that returned 50 times, and my second investment was a satellite TV channel that returned 5 times. My third investment was a failure. Once you have the startup investment bug, it becomes impossible to get off the train. Nothing else is as exciting or rewarding as bringing something new into the world. It’s addictive!

What are some of the key things you have learnt about Investing?
The most important thing about investing is the valuation you come in at. Our research at Hatcher+ uncovered an interesting fact recently; most angels accept valuations that are far too high. So with this in mind, angel investing is like buying and selling a house, you need to focus on buying at the right price. The second key thing is you need to invest in honest, hardworking, intelligent, positive people. You can always put up more money, but you cannot inject optimism that is not already there.

What mistakes do you see less experienced investors making?
Experienced investors, including myself, all make the same mistake; we invest in one or two companies, or small, non-diversified portfolios, in the belief that we can grow unicorns in hamster cages. However, sometimes this is possible. Our first investment company had a TYPI of 0.40 within 3 years, which currently puts it in the top 10% of funds worldwide. However, this kind of result requires a lot of luck and hard work.

What mistakes do you see Entrepreneurs making?
Entrepreneurs need to share the good and the bad with investors. Investors are great at helping with both. One time, when I was a much younger entrepreneur and CEO of a startup that had just raised $22USD million, I was in a board meeting, waving my arms around, painting a bright picture of the future and one of my new investors put his hand up and said “Stop! You have our money. You can take off the cheerleader skirt now. What problems are you facing with the business?” I’ve never forgotten that moment. You need to be real with your investors, and tell them what is going on. Don’t wait until it’s too late to ask for their help.

What’s the best piece of advice you ever received?
The best piece of advice I ever received was from an investor from Malaysia. At my very first board meeting he asked me if I knew what CEO meant? I said, “of course I do, I’m not that naive. It stands for Chief Executive Officer. He smiled and then shook his head. “You’re wrong,” he said. “CEO stands for Customers, Employees, Owners, in that order of importance.” His point being, if you look after your customers, and treat your employees well, the owners will benefit automatically. Great advice.

What advice would you give to those seeking funding?
When you seek funding, you need to be aware that investors care mostly about three things: How much, how long do you need it for and how much will I get back?

Who inspires you?
My wife inspires me. She is the most balanced, level-headed person I’ve ever met. She’s an amazing mother, a no-bullshit friend, and has a great outlook on life. I wish I could be more like her.

What have you just learnt recently that blew you away?
I recently learnt, first-hand, from my partner at Hatcher+, Dan Hoogterp (possibly the smartest man I’ve ever met), how unbelievably powerful AI can really be. It’s one thing to read about the capabilities, it’s another thing to input data and watch a machine output smart decisions that are hundreds of times more powerful and informed than human-based decisions. What I learnt is that AI is far more powerful than 99% of us know and, it’s growing in power exponentially.

What business book do you recommend the most?
The best business book for entrepreneurs to read is the Innovator’s Dilemma. It explains with great clarity, how to succeed as a small fish in an ocean full of predators. It is one of the very few books that fundamentally changed my outlook on being an entrepreneur and made me believe that a small company is capable of any level of success it aspires to.

Shameless plug for your business/organisation:
Hatcher+ is on a mission to revolutionize venture investing. We believe AI and machine learning, used in partnership with leading accelerators, can revolutionize deal sourcing and selection, and we believe that adopting portfolio theory through the use of massively scalable portfolios is the future. Finally, we think that 15 year venture funds are done. The future will consist of ETF-like venture funds traded on blockchain enabled exchanges. That’s what Hatcher+ is enabling.

How can people connect with you?
People are welcome to connect with me via Hatcher.com or LinkedIn.

Social Media profiles?
Twitter: https://twitter.com/gohatcher
Linkedin: https://linkedin.com/company/hatcher
Blog: https://hq.hatcher.com/blog.php

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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