Founder's Playbook Archives

Jeremy Lee: Cleaning Up the Planet, One Tablet at a Time

Welcome back to the Genesis Founder’s Playbook series is a collection of curated insights and experiences from exceptional startup founders. Within this treasure trove, entrepreneurs share their valuable knowledge and hard-earned lessons with the startup community.

In this series, we’ve showcased founders who have navigated the challenges of being solo entrepreneurs, tackled taboo pain points, and driven impact and profits. Threaded through these conversations is apassion for solving real-world problems, with a blend of tenacity and agility.

In our first Founder series for 2024, we spoke to Jeremy Lee who brings to mind the movie “Moneyball,” which based on the true story of the Oakland Athletics baseball team. In this movie, Billy Beane (portrayed by Brad Pitt) served as the general manager who built a winning team with limited resources. How? By challenging a player selection system that had proven effective for over a century but gives richer teams the upper hand.

SimplyGood, Jeremy’s latest venture, was born from his observation of the inefficiencies within the cleaning and personal care products sector, a domain largely monopolized by major FMCG players with established brands. Notably, these products, constituting a whopping 96% water, pose logistical challenges due to their bulkiness and weight during transportation. Moreover, they contribute to environmental pollution with their heavy reliance on single-use plastics.

Jeremy’s innovative solution offers consumers the essential cleaning ingredients in a dehydrated tablet form, creating a product line that is 200 times lighter and 300 times smaller than a conventional 500ml bottle of cleaning solution. This saves packaging, transportation, and logistics while reducing carbon footprint. Cost efficiencies are passed on to the end users, allowing them to clean without guilt.

Photo credit: SimplyGood

SimplyGood was born from his first venture, UglyGood, which he ran with a co-Founder during his university days. Driven by a commitment to sustainability and the circular economy, UglyGood ingeniously upcycled fruit pulp from local food manufacturers into valuable products such as animal feed, enzymes, and essential oils. Indeed one person’s waste is another’s treasure.

Now as a solo Founder who navigated SimplyGood through the challenging tech funding winter, he shares the following insights from his playbook:

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Jeremy’s journey in his own words:

Product-Market Fit is always a work in progress: When we launched SimplyGood, it was on the promise of eco-friendliness and sustainability. However, what we quickly realized was that while we had a small but very loyal following, it did not have broad-based appeal, making it difficult for us to scale. When we pivoted our messaging to convenience and value for money, we got a much better response. To date, more than 10,000 consumers have made the switch to SimplyGood. I don’t think our product-market fit is perfect yet and I believe it will always be evolving, rather than a one-time fix.

Listening to customers: We are very thankful to have customers who are very passionate about both sustainability and SimplyGood. Over the past few years, they have given us valuable feedback to improve our product design and customer journey, which we have incorporated.

Expansion through Strategic Partnerships: As a B2C business, I’m very mindful of the cost of customer acquisition (CAC). In the first year, spending a lot of marketing and brand building was inevitable as we were unknown. However, now that we have some brand awareness, we’ve expanded to B2B corporate partnerships, such as with property developers to provide starter kits for new home purchases, as well as business users like hotels, cleaning companies, and F&B businesses.

Balancing Sales and Brand Building: The conventional thinking is to build sales before brand building. However, I’ve discovered that tackling both simultaneously can open up new sales channels. Positioning SimplyGood as a sustainable and eco-friendly option has opened doors to collaboration with like-minded retailers. We are delighted to be chosen by MUJI Singapore to be part of their Sustainable Local Brands Project, and our range of products can now be found at their Plaza Singapura and Changi Jewel stores (at no listing fee!). Our products are also on the shelves at Commune Life stores, and we continue exploring partnerships with other retailers.

Support System: Having ventured into startup life first with a co-founder and now as a solo founder, I acknowledge the importance of a co-founder for emotional and mental support, even if it means a slower decision-making process. Therefore, I make it a point to connect with other founders to have a sympathetic listening ear and share experiences. I also take mini-breaks to rest and recharge.

People Matters: As a founder, I understand the multiple demands on our bandwidth. However, I think it is important to think about team and people management, especially if you want to scale. My experience has been to hire slow, but fire fast. As we are small and lean teams, wrong hires can adversely affect momentum, performance, and culture.

Tech Winter Survival Tips: In today’s uncertain fund-raising environment, founders should continue to focus on profitability, cash flow, and sound unit economics. Shifting our mentality from raising money to building sustainable businesses will serve us better in the long run.

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In the cleantech arena, Jeremy Lee stands out as a visionary force transforming sustainable living. He envisions a future where supermarket shelves are stocked cleaning tablets instead of the usual plastic bottles, aligning sound business sense with eco-friendliness and responsible consumption.

Feel free to reach out if you’re keen on contributing your own war stories to enrich the Founder’s Playbook and further strengthen our founder community. Together, we can build a network that thrives and succeeds.

Founder’s Guide to Hiring A CFO for Your Startup

The success of any startup is inherently tied to the effectiveness of its financial management, making the role of the Chief Financial Officer (CFO) a cornerstone of the company’s growth trajectory. However, the decision to hire a CFO must be well-timed, taking into account the specific needs and stage of the startup. In this article, we have outlined the critical factors about when, what, and how to select a CFO for your startup.

When to Bring Onboard a CFO

Founders often opt to manage the finance function themselves or work with an accountant until they reach Series C or even later stages. This approach can be acceptable, particularly if the founder has a finance or banking background (although it can be a significant distraction for them!). Alternatively, it might work if their investors are actively involved in daily operations. However, linking the decision to hire a CFO solely to the funding stage, rather than considering the internal business needs, can be detrimental to the startup. It not only distracts the founder but also deprives them of a valuable, independent perspective during the crucial early scaling phase of their business.

“Once a startup has achieved product-market fit, and can afford an experienced CFO, it should start looking to fill that role … [to] help the CEO in fine-tuning pricing, tracking unit economics, evaluating alternative business strategies through a financial lens, and figuring out the funding roadmap”

– Jaideep Lakshminarayanan
CFO, Trusting Social

Jaideep Lakshminarayanan, CFO of the AI fintech Trusting Social, recommends that once a startup has achieved product-market fit, and can afford an experienced CFO, it should start looking to fill that role. That person would help the CEO in fine-tuning pricing, tracking unit economics, evaluating alternative business strategies through a financial lens, and figuring out the funding roadmap. Having the CFO be a strategy partner at the C-suite is impactful, since many founding teams are from tech or product backgrounds.

Similarly, Kelvin Li, CFO of the market research and data analytics startup, Milieu Insight, emphasizes two primary considerations for determining the right time to bring in a CFO, primarily concerning fundraising and scaling. During institutional funding rounds, having a CFO onboard becomes vital, as fundraising can be time-consuming. A skilled CFO can streamline the process, allowing the leadership team to focus on other business aspects. Additionally, a CFO’s guidance on deal structure ensures fair terms and maximizes value for existing shareholders. With growing scale, setting up entities in multiple markets requires substantial attention and time, necessitating a CFO’s focus on these intricate operational and regulatory aspects, enabling successful market expansion.

What to Look for in a Startup CFO

The responsibilities of a startup CFO transcend traditional financial stewardship. Their role demands a specific skill set tailored to the complexities of a dynamic startup environment. This includes proficiency in financial planning, financial modelling, fundraising, treasury management, strategic thinking, tax planning, and ensuring compliance with a range of financial, tax, and employment laws.

“A startup is expected to take some time to achieve cashflow breakeven, so having a thorough understanding of the revenue and cost levers enables the company to manage its cash flow effectively before it achieves profitability,” says Kelvin from Milieu Insight.

– Kelvin Li
CFO, Milieu Insight

Furthermore, there are many unknown risks that a startup has a deal with. Therefore a startup CFO must possess forward-thinking abilities, capable of envisioning the broader landscape, preempting potential hurdles, and identifying opportunities – while articulating this clearly to financial and non-financial stakeholders, both internally and externally.

“The startup environment is super fast-paced and a CFO should be adaptable to change and capable of making quick and informed decisions – often without complete financial information,” says Dominic Ong, CFO of digital wealth platform, Endowus.

“The startup environment is super fast-paced and a CFO should be adaptable to change and capable of making quick and informed decisions – often without complete financial information.”

– Dominic Ong
CFO, Endowus.

Relationship-building and risk-mitigation skills are just as important. Jaideep adds that, “a startup CFO serves as the primary point of contact for the company with investors and strategic partners, utilizing external market insights, and identifying potential acquisition prospects. Additionally, the CFO can play a defensive role by pinpointing various risks within the business, such as customer concentration, currency exposure, and contractual vulnerabilities, and taking proactive measures to mitigate these risks.

How to Choose the Right CFO for Your Startup

Hiring the right CFO for your startup is a critical decision. Here are some strategies for finding and selecting the ideal candidate:

Figure out a Hiring Model

Startup Founders often face the challenge of juggling multiple responsibilities, making the task of financial management particularly demanding. Nevertheless, the availability of accurate, real-time financial data and strategic insights remains crucial for making informed decisions that can significantly impact the company’s trajectory.

When considering hiring a CFO, startups can choose from different models, including full-time/in-house, interim, or fractional, depending on their stage, business complexity, and budget constraints. Opting for a fractional CFO can provide the necessary level of expertise within a limited budget.

Unlike consultants who simply recommend a strategy, fractional leaders have full ownership of the role and function within the organization, and are working towards KPIs and outcomes. They engage in strategic planning, execute initiatives, measure progress, and adapt strategies as needed.

According to Elena Chow, Founder of ConnectOne, a talent solutions firm focused on startups, “Engaging a fractional CFO is a practical option for early-stage startups, providing the necessary expertise and resources to streamline financial operations without the need for a full-time team or a significant financial commitment. Such an arrangement can work well if it is structured with very specific outcomes and deliverables.”

“Engaging a fractional CFO is a practical option for early-stage startups, providing the necessary expertise and resources to streamline financial operations without the need for a full-time team or a significant financial commitment. Such an arrangement can work well if it is structured with very specific outcomes and deliverables.”

– Elena Chow
Founder, ConnectOne

Seek Expert Advice

Consult your lead VC or Advisory Board member with deep industry experience to help assess your startup’s needs and identify suitable CFO candidates. Your VC has worked with many CFOs and their experience can be invaluable in recommending a candidate with a proven track record and culture-fit. Your VC or Board member can also partner you in the interview process and act as a sounding board.

Technical Qualifications

An effective startup CFO offers deep strategic financial expertise that complements the technical skills of the C-suite and aligns with the company’s core business objectives. They must have the capability to identify essential metrics for effective business management and enforce a structured approach to tracking and reporting these metrics. This ensures that the decision-making process within the C-suite is both well-informed and timely.

Key prerequisites for a competent startup CFO include:

- A minimum of 10 years of industry experience, preferably in Corporate Finance.
- Background experience from “Big 4” accounting firms, along with CPA or MBA certifications.
- Previous involvement in fundraising, mergers and acquisitions (M&A), and initial public offerings (IPOs).
- Proven experience in leading startups through successive scale-ups.
- A history of serving as a reliable sounding board for the CEO, particularly highly stressful situations
- Some operational experience in identifying inefficiencies and bottlenecks and devising actional plans to address them.

Essential Soft Skills

According to Dominic, a startup CFO needs to be a forward-thinker, capable of seeing the big picture, and anticipating potential challenges and opportunities – while articulating this clearly to financial and non-financial stakeholders both internally and externally. While there is no “one-size-fits-all”, there are certain attributes that are critical for startup CFOs, which include:

- Conflict Management: As the role of finance is to provide checks and balances, the CFO’s ability to disagree and forge a compromise is an essential skill.
- Change management: A top startup CFO must be comfortable with change and ambiguity, adapting quickly to dynamically evolving circumstances.
- Relationship Building: Beyond being a “cost gatekeeper”, a CFO capable of fostering strong relationships both internally and externally can help channel collective resources and efforts toward accomplishing the company’s mission.:
- Emotional Self-Mastery: Because startups will go through business pivots and funding crises, an essential trait that a CFO should have is keeping a cool head as you work through the challenges together.
- Creative Problem-solving: A startup’s growth journey is often non-linear, so a CFO must be able to devise customised solutions for dynamic situations must be able to juggle and prioritize multiple workstreams

Gather Feedback

All the CFOs in this article agree that honesty and integrity are non-negotiables, therefore carrying out due diligence on the candidate is paramount. Conducting comprehensive background checks, including thorough network assessments with the candidate’s former colleagues, business partners, and clients, is crucial to verifying their professional history and character. Your VC, trusted advisor, or Board Member can assist with a confidential check regarding their ethical standards, work ethic, and overall performance. This process not only safeguards your company from potential risks but also allows you to make an informed decision that aligns with your organization’s values and long-term objectives.

The ultimate goal is for the CFO to become a strategic partner, contributing to long-term planning and decision-making, including pricing, expansion, acquisitions, and more. It is multi-faceted and evolves as the company grows. Timing the hire correctly, understanding the specific skills and qualifications required, and adopting the right hiring model are crucial for ensuring your startup’s financial health and long-term success. A skilled CFO can help guide your startup through the challenges of scaling while contributing significantly to bringing your dream to life.

Download our TDLR checklist here.

Founder’s Playbook: Driving Change and Dollars in Pursuit of Impact

What happens when social impact meets business? Do they clash as diametrically opposing forces or do they find common ground? To serial Founder, SeauYeen Su, they can be symbiotic partners in creating a more equitable and sustainable future for all.

In this installment of Founder’s Playbook, we explore how individuals and businesses are re-shaping the definition of success by harnessing the power of profit to drive positive impact on a wider scale.

For SeauYeen, the turning point in her career coincided with the birth of her first daughter, prompting some soul-searching about her goals. Driven by the desire to make a positive impact, she left her corporate IT job in search of something meaningful to do. Rather than immediately diving into social entrepreneurship, she started a small venture from her own kitchen, baking pastries, cakes, and cookies to supply the growing cafe scene in Kuala Lumpur.

As cafes flourished, SeauYeen recognized an opportunity for growth but also realised the limitations that she as an individual can bring. The question of scalability plagued her so she decided to set up a central kitchen. This was where she found an opportunity to work with single mothers, a group facing unique challenges. As her kitchen was already a kid-friendly space that offered baking classes for children on weekends, it was a ready-made solution for mothers to bring their young kids to work, relieving the stress of finding childcare.

Hence Simply Cookies was born. Enrolled in the Malaysian Global Innovation & Creativity Centre (MaGIC) accelerator programme, the social enterprise sought to break single mothers out of the poverty cycle by providing them with economic opportunities to balance financial independence and motherhood.

Seeking Scalability

As SeauYeen expanded her food venture, she encountered numerous hurdles, the biggest of which was once again, scalability. Her central kitchen was ill-equipped for mass production, and she did not want to go down the artisanal route and dilute the social impact of her venture.

She widened her target audience from single mothers to rural poor, especially the farmers in the Klang Valley. Working with these farmer communities, she also learned about the supply chain and how farmers lose out on the profit stack. What if one can remove middlemen from this chain – and this is how SeauYeen conceived of a platform, Fydu, to connect farmers with food service buyers, shortening the journey from farm to table. In a unique twist, pricing was set by the farmers instead of the buyers or distributors. This helped farmers get a fair price for their produce. Additionally, Fydu spotlighted the farmers’ social media, thereby instilling a sense of pride in their work and helping consumers trace the origin of their food.

However, just as Fydu was gaining traction, the COVID-19 pandemic struck, forcing SeauYeen to make the painful decision to close down her business. The financial toll and emotional distress pushed her into depression.

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SeauYeen’s journey in her own words

The pandemic was a challenging period for me, as I found myself in financial distress, having invested all my savings into Fydu. Nevertheless, I have since made significant progress in recovering from this setback, and hope that these learnings can be shared with other entrepreneurs:

Be Part of a Support Squad. I was very blessed to have a supportive group of friends who helped me find my footing again. They helped me see that the closure of Fydu was partly, but not entirely my fault; they affirmed my strengths in growing startups and my passion for purpose-driven ventures. They also did not withhold honest feedback. It is through them and my religious faith that I was able to pick myself up and continue my entrepreneurship journey. Address the Biggest Issue First. My next journey led me to Origo Eco, which recycles agricultural waste like rice husks into compostable products. While we started with F&B products like straws and cutlery, we recognized strong demand from the logistics industry for eco-friendly solutions to reduce their carbon footprint. This led us to temporarily pause our work on F&B products and focus on establishing a circular economy with global logistics companies. Our goal is to ensure that logistics pallets can return to the earth after use, addressing the issue of deforestation, where 170 million trees are cut down each year to support the pallet industry.

Profit and Impact are Partners. A common misconception suggests that doing good hinders profitability. I believe that businesses can and should prioritize both profitability and their responsibility to do good. Profit generation should empower further positive actions. It’s not an “either-or” situation but a “both” approach. Impact goes beyond charity, encompassing a broader commitment to sustainable and positive change.

Be Kinder To Ourselves and To Each Other. As founders, we often hold ourselves to high standards, especially in the face of failure. It’s the support of my team that got me through tough times. So, extend a helping hand and offer a listening ear, celebrate small victories, and foster trust by being the first to give. For founders and entrepreneurs, the journey is just as meaningful as the destination.

Learn the Art of Juggling Between Work and Family. Running a startup and raising a family are both all-consuming endeavors individually, and when combined, they can become a double-edged sword. On one hand, having a family serves as a powerful motivator, pushing you to strive for success as you have loved ones to support. However, the additional responsibilities can often feel overwhelming, leaving you with limited time to fulfill your daily tasks and perpetually engaged in a juggling act between family and work obligations.

It’s important to recognize that there will be moments when your primary focus must be on work, while there will be other times when family commitments take precedence. Striking the right balance is an art in itself.

Having a supportive partner who shares your vision and goals is not only essential but also something not to be taken for granted. I make it a point to set aside early Saturday mornings as dedicated, non-negotiable time to spend with my husband, cherishing the connection and shared commitment that makes it all possible.

Founder’s Playbook: Breaking Taboos One Period At A Time

The startup journey is often a David-versus-Goliath story, where a small upstart entrepreneur takes on bigger and more established players. This journey is inherently challenging, but when you address a pain point shrouded in taboo, you compound those challenges exponentially.

Today, in our Founder’s PlayBook, we had the privilege to speak with Tan Peck Ying, the co-founder of Blood (formerly known as PSLove). Blood raised a SGD2m Series A round in May 2023 from AngelCentral and DSG Consumer Partners.

Not one to shy away from sensitive issues, Peck Ying has been trailblazing a path, addressing menstrual health for the past nine years. Her journey began with her own experience of severe menstrual cramps that had plagued her since high school. During her tenure at NUS Enterprise, the prospect of transforming a small startup into a game-changing entity excited her, prompting her to leave her corporate job in 2014 to pursue this mission.

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Peck Ying’s journey in her own words

Blood co-Founders: Caleb Leow and Peck Ying Tan. Source: Blood

My co-founder, Caleb Leow, is also my spouse and we share a common vision, passion, and ambition for our business. I admit that starting a business with your partner is not easy, but it can work if you have a solid relationship, respect each other’s opinions, and divide your roles clearly. For instance, I have the final say in Product and Growth and I defer to him on all things technical R&D and branding. We have learned how to collaborate and support each other’s decisions in our respective domains.

Reflecting on my journey as a female founder addressing women’s health that is generally considered taboo, I’ve identified some key learnings along this journey:

Define Your Niche in a Crowded Market: We are not intimidated by the fierce competition in the sanitary pads market as we have a proven solution. What drives us is creating a challenger brand that stands out from the crowd and shows consumers that we care about their needs and well-being.

Be planet-friendly where possible: In the case of our new sanitary pads line, our commitment to environmental responsibility was aligned with our customers’ values. After extensive experimentation with materials like bamboo and cotton, we concluded that corn was the ideal choice for the top sheet. Not only does corn offer superior absorption performance, but it is also 100% biodegradable.

Obsess about Performance: At Blood, we scrutinize every aspect of our value offering, from the materials used to the size, contouring, and even the adhesive type. Beyond product, our passion for innovation extends into our customer journey and our business ethos. We pay close attention to user feedback and respond to every DM (direct message) on social media.

Embrace Diversity: Fun fact: as much as we are in the female healthcare space, our company gender ratio is about equally male and female. We believe in gender neutrality – the guys in our team bring a different perspective. They tell us what our business partners, VCs, etc., are thinking and provide a neutral and objective viewpoint. When guys come for job interviews, they ask, “Is it okay if I do not know anything about periods?” and for me, that is okay because they provide an objective viewpoint that balances ours. After all, business is gender-neutral.

Dare to be Bold: In 2018, we rebranded PSLove to Blood. Yes, it is a polarising name but there was a method to our madness. The reason behind this transformation was to convey a stronger message and challenge the menstrual health taboo head-on. And PSLove just didn’t get the job done as it sounds like something close to your heart, something warm and fuzzy. So, we faced the risk of being forgotten.

Source: Blood

We wanted a name that could really cut through the noise and bring our mission forward. Blood powerfully embodies what we’re trying to do — normalize periods. There’s nothing shameful about bleeding; most women bleed once a month, and it’s a normal part of our lives. So we are now proudly Blood.

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Like many businesses, Blood faced daunting challenges during the COVID-19 pandemic as retail was a large segment of their business. While their product was considered essential, they still had to find creative ways for cross-border shipping. Fortunately, they held a healthy inventory locally and were not reliant on their China factory.

Recognizing TikTok’s potential to reach their target audience, teenagers, they harnessed the platform to showcase their products, engage with a younger demographic, and promote menstrual health and wellbeing education.

“Our Go-to-Market approach has shifted from e-commerce to social commerce and TikTok,” Peck Ying notes. “We wanted to go where our consumers are going. And TikTok is the perfect platform for our messaging.”

Looking ahead, Blood has ambitious plans to expand its presence in Singapore, Malaysia, and Indonesia, with a mission to become a mass-market challenger brand that resonates with consumers. Blood is not just a business; it’s a movement that empowers women and normalizes conversations around a once-taboo subject.

Choosing the Right Venture Lender for Your Startup

Venture debt is a financing tool that can help startups achieve business milestones while being minimally dilutive to founders and early-stage investors. It can be used to extend the runway between equity raises, thus buying time for early-stage startups to hit key benchmarks. When used thoughtfully, venture debt can act as a catalyst for accelerated growth.

Just as you would meticulously evaluate a potential business partner or new hire, conducting due diligence on your venture lender is just as essential to ensure a mutually beneficial outcome. The criteria for choosing a venture lender closely mirror those for choosing a venture equity partner – but with a few important distinctions, which arise from the differences between debt and equity financing.

In this comprehensive guide, we unveil the critical steps for performing due diligence on your venture debt lender, helping you forge a partnership that straps rockets to your growth.

Assessing Added Value

Venture debt is more than just a loan. Scrutinize the value beyond the dollars – delve into the lender’s value add – operational acumen, industry connections, and advisory capabilities. Just as a venture equity partner brings expertise and a strategic network, a venture lender should ideally be able to advise on the technicality of your financial statements – are you over-spending on marketing, or why are you budgeting large overheads for staff expansion. You would also want a venture lender to bring their network and experience to significantly amplify your growth trajectory. Engage in candid conversations about their involvement in portfolio companies and how they’ve contributed to success.

For instance, at Genesis, our portfolio companies are integral to our community. We actively champion them to a diverse array of investors, partners, and clients, both within the virtual realm and offline arenas. (#GenesisStories)

Through Thick and Thin

The road to building a successful startup will be long and filled with potholes. Whether the loan spans one or three years, mutual trust will be very important. Throughout your interactions, ask yourself, “Am I dealing with someone who understands how a start-up grows? Will they stand shoulder-to-shoulder with us through the good times and bad?”

So speak to at least three of their Founders; ask about their lender’s behaviour during the COVID pandemic or recent tech funding winter. A venture debt partner who stands by your side through adversity is a valuable ally in ensuring your startup’s resilience and growth.

Mastering Key Terms

Unlike a venture equity firm’s term sheet, the one from your venture lender might throw some unfamiliar terms your way that are worth understanding in advance:

Interest rate: This is the loan interest rate and be sure to know if it’s “fixed” or “floating”, “flat” or “annualized”. This makes a big difference in your repayments and cash flow.
Duration of loan: This is typically one to three years depending on the working capital requirement and the venture lender’s fund life. Generally, longer-term loans are attractive as they allow more time for the capital to work and generate a return.
Interest-only period: Given the cash-burn profile of startups, you can negotiate with your lender to defer paying the principal while servicing only the interest payments for an initial period of 3-6 months. In return, the lender may ask for additional upside, for example, more warrants or higher interest rates etc.
Warrants: Warrants give the lender the right to purchase equity shares at a predetermined price at a future date. This usually amounts up to 20% of the loan principal amount.
Fees: There are several fees that Founder’s should be aware of e.g. origination fee, legal fee which are typically mandatory and then there are other fees such as “Unused fees”, or “Closing fees”, that are in addition to interest payments.
Prepayment Penalties: In the happy event where your cashflow is more positive than forecasted, you may wish to pay off your debt early. Examine the penalties for early payment and there are may be creative ways to structure these penalties to mutual advantage e.g. a sliding scale expressed as a percentage of the loan as the loan period draws to a close.
Covenants: are “stress tests” that companies must meet e.g. minimum working capital, EBITDA, or revenue etc. Have a candid discussion with your lender regarding the rationale behind each covenant. Usually covenants are not meant to be putative in nature but to ensure that the startup practices financial discipline.

Due Diligence on Due Diligence

Finally, take a moment to find out how the lender conducts its own diligence. Inquire about their due diligence process, including the depth of research, the rigor of analysis, and the criteria they prioritise. A thorough, systematic approach to due diligence indicates a commitment to informed decision-making, which will serve as a strong foundation for your partnership.

TLDR? Here’s our playbook on doing due diligence on your venture lender.

Founder’s Guide to Successfully Raising Venture Debt

So you’ve caught wind of venture debt – the financing option that enables startups to secure capital while safeguarding Founder’s ownership stakes. Now, the real question is: How do you navigate the maze and successfully raise venture debt for your burgeoning business?

In this article, we will share the typical path that leads to venture debt success. Picture this as your startup’s GPS, guiding you through each pivotal step, from the first call to securing a promising term sheet.

Firstly, it is important to realise that venture lenders typically focus on startups that have revenue streams and possess equity backing. Nevertheless, it is best to initiate such discussions with venture lenders even if you are not actively fund-raising. This gives both parties the opportunity to grasp each other’s business models and find comfort working with one another.

Secondly, the process from the initial conversation to an eventual disbursement may take up to two months, depending on the depth of due diligence required and how readily you furnish the required information. A typical process looks like this:

Introductory Conversation: The first introductory call is like a first date, where both sides listen intently and get to know each other.
NDA Signing: If the initial conversation goes well, both sides will promptly sign a non-disclosure agreement (NDA) for the initial due diligence.
Initial Due Diligence: Prospective lenders will typically request key information, including:
- Investor Presentation: often similar to what’s used for equity funding but with additional details on what the debt raised will be used for.
- Valuation: Furnish the annual equity valuation, including history, projections, and funding details.
- Detailed Capitalization Table: Share ownership distribution, fundraising history, and debt utilisation.
- Historical Financials: Ideally, supply audited financial statements covering three to five years (as available).
- Projected Financials: Supply a linked three-statement financial model (balance sheet, income statement, cash flow).
- Customer Insights: Offer a list of major customers, past and present, indicating customer profile, concentration, and churn.
- Performance Metrics: Metrics that are general and particular to your industry e.g. active user growth, monthly recurring revenue etc.
Analysis: The venture debt lender will conduct a comprehensive analysis using the provided data, typically within two weeks, resulting in a potential term sheet.
Term Sheet Presentation to your Board: Share the term sheet with your company’s board of directors, and getting their buy-in is a key step, involving them earlier in the process to prevent any unforeseen obstacles.
Evaluation and Comparisons: If multiple lenders are involved, allocate around a week to compare and evaluate different term sheets, considering various elements and lender specialisations. Read here on how to conduct due diligence on your venture lender.
Negotiations: Engage in negotiations to customise the terms for a suitable structure, potentially adjusting factors such as interest rates, amortisation schedules, and timing of fund disbursement.
Final Decision: Once comparisons and negotiations are concluded, select the most fitting venture debt arrangement, which may involve equity considerations.

Thirdly, throughout this process, it is important that you have an experienced Finance manager who is conversant with building financial statements and understands what bringing debt on the company’s balance sheet means. This is because you will need to know the 4Cs:

Cost of financing: Review your cost of equity and the cost of debt by calculating the weighted average cost of capital to find the optimal mix of debt and equity.
Cap table: Understand the impact of equity and debt financing on your cap table.
Cashflow: Knowing your cashflow at present and the forecast for next 1-2 years ensures that the company is able to meet its debt obligation.
Covenants: While covenants on the terms sheets may seem restrictive at first, have a candid discussion with your lender regarding the purpose of each covenant. Ideally, the covenants should help you instill financial discipline and steer you towards sustainable profitability.

Navigating the maze of startup financing might appear intricate, yet at its heart lies a simple truth: not all financial resources are equivalent. Each startup possesses its distinct ambition, business model, and market dynamics. As a result, the blend of financing you pursue should be meticulously customised to align with your growth trajectory and overarching strategic vision. Armed with this understanding and the foundation of preliminary groundwork, you can confidently steer your startup towards a path of success.

TLDR? Download our handy Playbook for raising Venture Debt here.

The entrepreneurial journey is often romanticised with tales of heroic successes, but, in reality, it can be surprisingly solitary. While some successful companies have started with only two or as many as eleven co-founders, there are also numerous solo entrepreneurs who achieve remarkable accomplishments. Yet, finding a compatible co-founder can be elusive, leaving determined entrepreneurs with a crucial decision to make: go it alone or let the opportunity slip away.

As venture investors, Genesis has had the privilege of engaging founders from diverse backgrounds, building connections that stretch as far back as 2015. Throughout the years, we’ve witnessed these founders endure a rollercoaster entrepreneurial journey, braving challenges like Covid and equity winters, and, of course, embracing triumphs.

Now, we are thrilled to present our Founder’s Playbook series, a collection of curated insights and experiences gathered from these remarkable founders. This series serves as a treasure trove of wisdom, where seasoned entrepreneurs share their valuable knowledge and hard-earned lessons with the startup community.

Whether you are a budding entrepreneur navigating the early stages of your venture or an experienced founder seeking guidance in uncharted territories, our Founder’s Playbook offers a reservoir of practical tips and inspiration to fuel your own journey. Embrace the knowledge shared within and join us in fostering a community of support and growth, as we continue to shape the future of entrepreneurship together. Do get in touch with us should you be interested to share your own war stories with the founder community.

Meet Niles Toh, the solo Founder who launched FoodRazor in 2015 as a SaaS business revolutionising F&B procurement and accounting processes. His first job fresh out of university was with a B2B SaaS company in 2014, managing regional sales and business development. It didn’t take long for Niles to see the potential of B2B SaaS as a profitable business model, sparking his desire to start his own venture. His father frequently shared his experiences dealing with inefficiencies in the F&B supply chain, which sparked the idea that this was an area where he could build a solution. Efficient ordering processes for ingredients are vital for a restaurant’s success as they directly impact the quality and consistency of the dishes served. By streamlining and digitizing this process, restaurants can optimise costs and reduce waste, while ensuring a delightful dining experience for their customers. This motivated Niles to start FoodRazor to address these issues.

Niles’ Journey in his own words

Being a solo founder came with its own trials and tribulations. One of the central challenges I grappled with was the limitations in my expertise and the sheer lack of bandwidth. In hindsight, I realized the immense value and strength that a co-founder could bring to the table. Initially, I had a co-founder, who unfortunately had to leave after a year due to personal financial concerns. As we were self-funding the business at that time, we couldn’t offer the stability he needed. This valuable lesson guided my approach when starting my current venture, SuperTomato, where I have the privilege of working alongside a dedicated co-founder.

Reflecting on my journey as a solo founder, I’ve identified some key aspects I would have done differently:

Seeking a Co-Founder from the Outset: I started with a co-founder who has the technical skillset that I am lacking. When bootstrapping a company, I think it’s more important to find a co-founder with both financial resources and time to commit to the long haul. The journey often takes more time than anticipated, so having someone dedicated to the process is vital.

Building a Strong Support Network: As a solo founder, the road can be isolating, and at times, overwhelming. In retrospect, I would have actively sought out and built a robust support network of mentors, advisors, and fellow entrepreneurs to share experiences, gain insights, and stay motivated.

Expanding beyond a Domestic Market: Initially, I thought we should concentrate on Singapore and establish a strong presence here before venturing abroad. However, I have come to realise that it would have been more beneficial for us to go global right from the start and allow our paying customers to direct us toward the most promising markets for expansion. Waiting for the perfect moment to be “ready” will only hold us back.

Methodical Fundraising Process: As a founder, it’s crucial to dedicate sufficient time and effort toward identifying suitable investors. This is particularly important for new entrepreneurs who lack working experience and require more guidance. It’s essential to identify an investor who can offer valuable advice and serve as a reliable sounding board, especially during the initial stages of your entrepreneurial journey.

I wish every Founder much success in their endeavours!

In June 2021 after six years at the helm, Niles made the difficult decision to exit FoodRazor. There was a buyer ready to take over the business and he recognized that he had reached a point of burnout and no longer felt he was the right person to lead the company.

Nonetheless, his unwavering passion for solving complex problems has been reignited after a much-needed break to re-energise himself. He has since embarked on his second startup, SuperTomato.ai, a hardware-focused venture which is already profitable. This time, Niles is joined by a co-founder who is a serial entrepreneur who has started multiple successful businesses. The presence of a co-founder has made a palpable difference, providing essential support and even sparking the inception of a third startup, MonsterBuilder.ai, which emerged from SuperTomato’s requirements.

Overall, Niles would summarise his mantra as “Think Big, Start Small, Go Fast!” and the startup journey, though challenging, is fulfilling and rewarding. Follow his journey on LinkedIn.

Reporting by Nicole Lim, Investment Analyst Intern, Class of 2023.