As a seed-stage investor, Tiang Lim Foo, Partner at SeedPlus, sees the buds among the weeds.
The companies that come to him sometimes have something that works, sometimes, not.
Some of the companies have a story to sell. A minimum viable product. Some might even have a bit of revenue generated.
It is his job to find the ones worth betting on.
Better known as Tiang to his associates, the VC was previously responsible for managing US-based notetaking technology company Evernote’s presence in Asia and had also worked on mobile, fintech and Software-as-a-Service technologies at various early-stage companies.
It’s the time he immersed in various startups that lends him the capacity to see through things and single out startups with a potential.
SeedPlus is a Singapore-based $18 million early-stage venture capital fund, targeting product-focused deep tech startups across Asia.
The fund, officially closed in mid-2017, was backed by Jungle Ventures, Cisco, Eight Roads Ventures, as well as IFC and Indian tycoon Ratan Tata.
It has since invested in more than 13 startups, including the likes of Moglix, Homage, Evie.ai and CardUp. We most recently wrote about Singapore-based Homage, which is a caregiver-matching app platform.
We speak to Tiang to find out more about his investment philosophy, how SeedPlus brings value, and what he has to say about early-stage startups in the region.
His answers have been edited for brevity and clarity :
You mentioned that at the seed stage, an investor like SeedPlus can really give its portfolio “an unfair advantage”. Can you elaborate more on how SeedPlus can do that for its portfolio companies?
Tiang: To summarise, it really boils down to three things: our collective network (be it access to talent, strategic partners or customers), our collective professional experiences in building products and launching businesses in the past, and access to capital.
While there are many risks to bear in making an investment decision, a few that SeedPlus won’t relent on are team risks and market risks. Can you share more on this thought and why these are important things investors like yourself will not compromise on?
Tiang: A successful startup is a confluence of many factors and at each point in time along the journey, some are more crucial than others. At the very early stage, when product market fit is not yet achieved, it’s difficult to nail down how the product and ultimately what the business would look like, and these things tend to change over time.
Two things we know are true: you need a great team with great execution ability to go through the journey, and the market has to be sizeable enough to warrant the journey in the first place.
Coincidentally, these are the two constants that I think are hard to bet on. You can’t bet on market trends, and you definitely wouldn’t want to bet on a bad team.
What’s one vertical or industry that excites you as an investor? Why?
Tiang: Personally, I’m most excited about the application of data and technology to solve problems at scale.
For example, in Southeast Asia, there exist huge gaps in understanding human and people analytics to enable managers and leaders to build better companies.
This can be achieved by using technology to acquire and analyse data better and more timely. Better and more timely data ultimately translates to higher quality and actionable feedback for people managers and hopefully, creating better working environments and higher quality companies.
Another example could be to address legacy industries like the insurance industry. How do we make insurance smarter, more accessible and personalised, by leveraging data and technology?
How much time do you usually spend before making an investment decision? What do you typically do during that period?
Tiang: Like all things in life, it depends.
Besides doing due diligence on the founders and team, we spend time doing quantitative and qualitative market research by interviewing customers, partners and subject matter experts.
We do spend quite a fair bit of time during the evaluation process to discuss strategy and go deep with the founders to understand their vision. I think this is some of the most important interactions we can have with the founders during the evaluation process.
We want to invest in founders that we can work well with. At the same time, we want to allow for enough space and time for founders to assess if we are the venture capitalists they want to work with as well.
The interaction during the evaluation process gives both sides a chance to get a sense of each other’s working styles and provides alignment on expectations post-investment.
As a lead investor, we think that the more important work happens after the investment is made. Constantly we are obsessed with how do we help our portfolio companies win. Ultimately, we live and die by the success of our portfolio companies thus it behooves us to do our best to help them succeed.
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What’s your advice to seed stage startup founders in Singapore having difficulty raising capital?
Tiang: To begin, take a step back and really ask yourself if you should be raising capital at all. Some businesses are not meant to be venture scale and that is okay; maybe that’s the reason why you have difficulty fundraising.
This could be pretty banal, but I think the basics are quite important.
Prepare a clean and concise deck, refine your pitch, remember to follow up in a courteous and professional manner. It’s always quite surprising to me how many founders don’t do the above. If you do, you are already ahead of 90 percent of the curve.
This article is written by Elaine and edited by Ben Jiang; and was first published on Kr ASIA.