Category Archives: Singapore

Singapore as a hub

Interesting post from Matt W at EF :: https://medium.com/@mattwichrowski/field-notes-on-singapores-venture-scene-3dba1dd66798

Lots to parse in this but I generally agree in that the city is primed for potential and the big stuff is yet to come but we are on the cusp of it.

SeedPlus got a mention so I will just call that out but there is much more in the article than that. I personally like the section on Singapore as a hub:

3. There’s power in being a hub

I made the mistake of starting early conversations with: “What’s the Singapore venture scene like?” A simple question, but it immediately showed my ignorance. You can’t properly assess Singapore without taking all of Southeast Asia into account, because the two are cosmically intertwined. Investment strategy isn’t limited to the 277.6 mi² area of the island. It’s regional from day one. Singapore has achieved a remarkable amount in just 50 years, and it has done a lot of that by partnering with the rest of the world. International legal standards and advantageous tax treatment have made Singapore the de facto Southeast Asian hub for many businesses. So while there’s a lot of money in the small island nation, that cash is flowing to Vietnam, India, Malaysia and a host of fast-growing countries. The inverse is true for talent. Many of the region’s best minds flock to Singapore to build their startup HQ, and then attack their local market for dominance. This is, in no small part, one of the driving reasons EF set up shop there.

My relocation to Singapore after years of being around other parts of Asia was solely based on this premise – Singapore makes for a great hub and I think this is huge for startups and for VC’s. Of course no place is perfect and there are people that disagree but that doesn’t change the appeal of Singapore for me and most of the folks I work with.

Thinking about AI

It is easy to go deep in the weeds or try to think about the complicated ways that AI can help make life easier.

I have an Alexa at home and apart from telling me bus arrival times, giving me the morning news update or making it easy for the kids to play some songs on Spotify, I don’t use it much. I do think voice and the home will offer a chance for AI to shine but we are not there yet.

I see the subtle things Apple does with iOS and some of their apps and it helps but nothing earth shattering yet. AI is slowly creeping into all things – like it or not.

As a VC I am trying to think of the many ways AI might permeate normal life and find companies to invest in. I will highlight one way that AI is helping me manage my calendar, yes this is a SeedPlus portfolio company, but wanto talk about the broader implications on AI or machines learning and my calendar.

I have been using Evie solidly for over a year and at first it was more novelty than anything but even in the early stages I liked moving the booking of a meeting off to someone else. I assume this is how people feel about their admin but I have never had a human admin. Of course Evie would always reply and ask me more questions, she was learning, but now those questions don’t come to me as much cause she is evolving and getting smarter.

Our team uses it and scheduling a meeting is simply one email. Find a slot. Book. If outsiders are involved than Evie will talk to them but save me from the back and forth of it all.

Generally I book meetings faster this way and use less of my time in doing so. I can tell Evie my preferences and over time she is even inferring some of them. It’s not perfect yet though. I would like Evie to be able to distinguish between time blocked for outside meettings and time blocked for inside meetings. Example – I would block time for people on my team to book but if they don’t use that time then it is still my time, it would not get booked bny outsiders. I would also like Evie to allow me to cap my overall meeting time – example might be setting a high water mark for how much of a week goes to meetings and if she hits that mark she would alert me as such. I know some of this is managed by time blocking but I also might book some of my own meetings but the thought is that Evie would know once I hit my mark and let me deal with it.

I know there is some chatter on the ‘net about how these personal calendar bots are impersonal. Meaning I should talk to the person and manually book it but I don’t see the issue to be honest. I think Evie is faster than my own calendar management and this means I get people booked faster and they don’t have to hear me find a time or discuss it, Evie just offers up the soonest available time. Meaning I still feel that by using Evie my time is better managed and people get the best of me. Maybe others don’t feel this way but to me this is the beauty of a personal AI bot, my own powers are augemted via technology.

This is what I want to see more of. Example I just had to fill out an India Visa form and it would be great if Apple or Google could pre-fill out the form for me and save a bunch of time. I can honestly think of other things I wish “computers” were doing for me – all in the same category of “augmenting me” so that I get more done in the same span of time. Of course this same “augmentation” could mean that some people are put out of work or are needed less – I am not sure how to defend against that but I know that if much of the world is augmented that overall productivity will go up which everyone benefits from.

However this does lead me to think that society will have issues with grappling how to deal with some folks out of work while others are benefiting. The world has always had this issue though and I think about it a lot when I look at my young kids.

For the time being though I will continue to enjoy the benefits of calendar and meeting automation.

🙂

 

 

TwoFer Thursday

Big day for SeedPlus.

First there is this – been working on this for quite some time :: https://techcrunch.com/2017/03/15/world-bank-ifc-seedplus/

Humbled to be working with such an amazing partner like the IFC.

And of course our main goal of this capital is to fund awesome companies, which makes for such an awesome day to be able to also announce our investment in Homage :: http://www.dealstreetasia.com/stories/sg-health-tech-startup-homage-close-1-2-million-in-seed-round-67505/

Okay – back to work!

Good read from Fred on convertibles

Not cars but notes :: http://avc.com/2017/03/convertible-and-safe-notes/

His reasons about why not to do are so good.

2. They obfuscate the amount of dilution the founder(s) is taking. I think many investors actually like this. I do not. I believe a founding team should know exactly how much of the company they own at every second of the journey. Notes hide this from them, particularly the less sophisticated founders.

This one is good. Many times I find even that the founders don’t know what they are talking about and have not figured out their own dilution. They also may not have carved out something for the ESOP and are not taking that into consideration as well.

3. They can build up, like a house of cards, on top of each other and then come crashing down on the founder(s) at some point when a priced round actually happens. This is the worst thing about notes and doing more than one is almost always a problem in the making.

This is the one we see too many times. Rolling notes or extended notes that take a serious Excel expert to figure out how each round is actually priced and who owns what. You have to be careful about this so that you know what each round is doing and how to calculate the dilution.

4. They put the founder in the difficult position of promising an amount of ownership to an angel/seed investor that they cannot actually deliver down the round when the notes convert. I cannot tell you how many angry pissed off angel investors I have had to talk off the ledge when we are leading a priced round and they see the cap table and they own a LOT less than they thought they did. And they blame the founder(s) or us for it and it is honestly not anyone’s fault other than the harebrained structure (notes) they used to finance their company.

Yup. Also, see this. They over promised angels with too high a valuation cap and once you see a few rounds of this by the time you actually calculate it all one will find the dilution and ownership.

The list of stuff he says to do is gold. Freaking gold:

Here are some suggestions for the entire angel/seed sector (founders, angel investors, seed investors, lawyers):

  1. Do priced equity rounds instead of notes. As I wrote seven years ago, the cost of doing a simple seed equity deal has come way down. It can easily be done for less than $5k in a few days and we do that quite often.

  2. The first convertible or SAFE note issued in a company should have a cap on the total amount of notes than can be issued. A number like $1mm or max $2mm sounds right to me.

  3. Don’t do multiple rounds of notes with multiple caps. It always ends badly for everyone, including the founder.

  4. Founders should insist that their lawyers publish, to them and the angel/seed investors, a “pro-forma” cap table at the closing of the note that shows how much of the company each of them would own if the note converted immediately at different prices. This “pro-forma” cap table should be updated each and every time another note is isssued. Most importantly, we cannot and should not continue to allow founders to issue notes to investors and not understand how much dilution they are taking on each time they do it. This is WRONG.

Again. One can do notes. They serve a purpose but I think most founders don’t know what they are doing with them and assume that it is better than equity but in fact dealing with a proper equity round might make more sense. Normally the reason to do a note is speed and you expect that pricing the round later makes more sense than pricing it now. Regardless one shouldn’t do many rounds as notes, leave notes open for too long and delay the hard work of pricing and converting.

Obviously, I am new at this but Fred isn’t!