As part of Singapore Fintech Week, Deloitte Private hosted a panel on the topic of Getting capital for your idea. The discussion, which took place Tuesday at Singapore Expo, brought together key experts from the fintech ecosystem in Singapore.
- Koh Soon Bee, Partner, Corporate Finance, Deloitte Private (moderator)
- Joel Ko, President, Marvelstone Group
- Kimmy Paulino, Chief Operating Officer, Startupbootcamp Fintech
- Gregoire Rastoul, CEO, UEX
- Taras Wankewycz, CEO, H3 Dynamics
Below, we highlight some of the advice offered during the panel from LATTICE80’s Co-founder Joel KO Hyun Sik (also President of Marvelstone Group). A big thank you to Deloitte and the rest of the panelists for a great event.
Softbank invested $20 million in Jack Ma because of his eyes (the “fire”) even though the business plan was all wrong. You see proposals every day and what would really make you sit up and want to fund their idea?
In various ways, founders should try to attract investors. Every day, every week, investors receive many proposals. I have many proposals unopened in my email box. I think Jack Ma was successful in communicating his vision, passion and even struggles to his potential investors. Having lots of issues or problems unsolved doesn’t matter because the nature of a startup business is always full of issues and problems. One thing you should take care over is how to reach a ‘strategic fit’ with investors.
Realistically, can an idea without a product raise any money?
Ideally yes. Realistically no. If you are already a very successful serial entrepreneur, you can sometimes raise funds from just the idea. But most of us are not, and cannot. The only way to bridge the gap is to prove your past experience or have something tangible to show investors beyond just an idea.
How do you determine valuation?
As you know, there are many quantitative methods to determine valuation. Personally I am not so interested in those analytical approaches, though it has its own benefits. I think the underlying assumptions are more important. Assumptions are always changing. Ultimately, every valuation is negotiable between investors and founders. I prefer to spend more time trying to understand the founder’s strategy and philosophy. If they are good and look capable, I am ready to invest even with higher valuations.
Is Singapore ready to go global in the push as fintech hub?
While staying in Singapore during the past 8-9 years, I think the city has done one thing particularly successfully: deciding to position itself as regional and global fintech hub. I believe Singapore is ready to go global if it can sustain its openness and diversity in terms of policy and culture.
One sentence of advice to all aspiring entrepreneurs?
From my experience, a considerable portion of startup businesses fail because of broken partnership or relationships among co-founders, not because of a lack of ideas or strategy. If I had to attach a number to this issue, it would be about $5,000. Disagreements over that amount can be all it takes for partnerships to fall apart in the early stages. It’s incredible when we think about it: we are often not fighting over big amounts of money with our co-founder. Once you make a decision to go together with someone, don’t fight over $5,000.