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Friday, October 07, 2005
Walden talk VC in Singapore
Yesterday evening I went to a fascinating talk at the Business school at NUS. Mr Chua, partner in Walden's Singapore office, talked for an hour.
The talk, unsurprisingly, described how Singapore is a small domestic market relative to others in Asia; it does not have companies that are global industrial drivers like Korea has LG, Samsung etc; and there is a small talent pool of managers; the culture here is more averse to risk than other growing markets. No real surprises here
Despite there are many VC firms here in Singapore, not much investment is being given to Singapore startups. Most of the money is going to India and China business plans. Mr Chua talked of a "China bubble". Another insight is that successful Singaporean entrepeneurs don't seem to be investing their money into new startups, unlike Silicon Valley. Not the same ecosystem here.
Mr Chua told many interesting "rules of thumb" on Walden's approach to VC investing such as
- startup must have great team, not an individual
- prefer not to invest in a company with a sole owner, instead "four-five people each with 15-20%", in case of changes ahead
- the business has to be scalable, and not dependent on key people. In response to one question, he said consultancies are not what he is looking for as "there is no way to replicate human minds exactly"
- exit strategies typically five years, looking for 5-10 times return on investment. Biotech is tough for a VC because of the long produc cycles.
Finally for current investment opportunities, Mr Chua sees Services/Broadband/Wireless technologies are all hot areas, also Open-Source software. Some in the audience expressed frustration on the lack of seed capital for new startups; Mr Chua said there are very few VCs in Singapore who provide seed capital.
The talk, unsurprisingly, described how Singapore is a small domestic market relative to others in Asia; it does not have companies that are global industrial drivers like Korea has LG, Samsung etc; and there is a small talent pool of managers; the culture here is more averse to risk than other growing markets. No real surprises here
Despite there are many VC firms here in Singapore, not much investment is being given to Singapore startups. Most of the money is going to India and China business plans. Mr Chua talked of a "China bubble". Another insight is that successful Singaporean entrepeneurs don't seem to be investing their money into new startups, unlike Silicon Valley. Not the same ecosystem here.
Mr Chua told many interesting "rules of thumb" on Walden's approach to VC investing such as
- startup must have great team, not an individual
- prefer not to invest in a company with a sole owner, instead "four-five people each with 15-20%", in case of changes ahead
- the business has to be scalable, and not dependent on key people. In response to one question, he said consultancies are not what he is looking for as "there is no way to replicate human minds exactly"
- exit strategies typically five years, looking for 5-10 times return on investment. Biotech is tough for a VC because of the long produc cycles.
Finally for current investment opportunities, Mr Chua sees Services/Broadband/Wireless technologies are all hot areas, also Open-Source software. Some in the audience expressed frustration on the lack of seed capital for new startups; Mr Chua said there are very few VCs in Singapore who provide seed capital.
posted by Guy Nicholson, 12:33 pm 
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