Thought Leadership Archives

In a wide-ranging interview with Olivier Raussin, Co-Founder and Managing Partner of FEBE Ventures, we explore his career and experience working in the Southeast Asian tech ecosystem.

Olivier talks about his career in big tech, his own startups, and how he found his passion for venture capital. He shares insights into the challenges faced by startups and his thoughts on exciting trends in Southeast Asia, the future of venture capital, and offers advice for young professionals considering a career in VC

FEBE Ventures (“For Entrepreneurs, By Entrepreneurs”) is an early-stage Venture Capital fund supporting outstanding entrepreneurs in Southeast Asia.

Can you tell us how you ended up in Vietnam from France via Brazil?

I started my career in VC in Europe before having the opportunity to move to Brazil to lead the Latin American practice of my fund at the time, Project A Ventures. During the seven years I spent in Brazil, I had the privilege of working with many talented entrepreneurs and witnessing the incredible growth of the tech ecosystem there, including the emergence of several unicorns.

As I gained more experience investing in the region, I began to see many similarities between the tech landscapes in Latin America and Southeast Asia. Both regions have rapidly expanding economies (like Brazil, Mexico, Indonesia & Vietnam) that are ripe for digital transformation.

So, I decided to move to Singapore in order to immerse myself in the SEA startup scene and build relationships with entrepreneurs and investors in the region.

You pivoted a few times in your career. What prompted the move into VC?

I spent almost a decade of my career working in Big Tech, holding C-level positions at companies like Microsoft and Google in Europe. In between these stints, I had always felt an entrepreneurial itch and spent six years bootstrapping two startups.

However, it wasn’t until an old friend from university invited me to join his new $100M, operationally focused fund, that I realized that venture capital was a natural next step for my career. VC allowed me to combine my experience in Big Tech with my passion for entrepreneurship, and gave me the opportunity to work with talented entrepreneurs to help them build and grow innovative businesses.

You spoke about how startups don’t grow in a linear manner. Can you share with our readers about the wine business that nearly died many times but eventually did well.

When we were building an ecommerce business in Brazil, we faced many challenges that nearly brought us close to “be short cash” several times. These issues included a lack of capital, long working capital cycles. On top of that, we made mistakes in scaling too quickly and making the wrong hires. Through perseverance, we were able to turn it around. Today, the company is healthy.

This experience taught me important lessons about operating a business and gave me insights into the challenges that founders face. As a VC, I try to bring this empathy to my interactions with founders to help them overcome the hurdles that come their way.

How do you prioritize and manage your tasks and responsibilities on a daily basis?

In the morning, I spend time reading and working on mid-term strategic topics, as well as engaging in reflection and deep work.

My afternoons are reserved for calls and meetings. This is when I engage with founders to discuss potential investments and provide support to our portfolio companies.

Overall, I find it helpful to block out specific times of the day for certain types of work and prioritize my tasks based on their level of importance. This allows me to focus my energy on the most critical areas and maximize my productivity throughout the day.

What are some trends or developments in Southeast Asia that you find particularly exciting or interesting?

Among the trends that I find exciting in Southeast Asia, there are two in particular that I would like to highlight. The first is the emergence of Southeast Asia as a hub for SaaS startups that are building global solutions for the rest of the world.

Secondly, I’m impressed by the increased innovation and unique business models being developed in the region, as opposed to simply copying successful models from other markets. Startups in Southeast Asia are now leveraging their specific local and domain expertise to create businesses that are new and unique, which is great to see.

How do you see our industry evolving in the next 5-10 years, and how are you preparing for those changes

In the next 5-10 years, I see a few key trends emerging in the VC space. One is a consolidation of the various VCs & PEs in the ecosystem, which will likely result in the emergence of multi-stage platforms as well as ultra-niche plays (vertical, countries, technology) that cater to specific segments.

In addition, we will see the startup exit market maturing, with more opportunities for private equity exits.

How do you maintain a work-life balance and avoid burnout in a demanding and absorbing role?

I make sure to go for a run or go to the gym, practice yoga every day, and take my Golden Retriever, Samba, for a long walk once a day. I try to maintain a healthy diet by limiting sugar and carb intake. I also find it helpful to step away from work by disconnecting from Whatsapp and emails a few days a year to enjoy a full digital detox.

What advice do you have for young professionals who are considering a career in VC?

For those considering a career in VC, my advice is simple: join only if you truly love the work. This is not a job for those looking to climb the traditional career ladder of consulting or MBA programs. It requires a deep passion for technology, innovation, and entrepreneurship, as well as a willingness to work hard and commit for the long haul. VC is not a career with immediate rewards, and it can take years of hard work and persistence before seeing the fruits of your labor.

However, if you are willing to put in the time and effort, the rewards can be significant, both personally and professionally.

Finally, any advice for startup founders amid the current difficult macro-economic environment?

Growth-at-all-costs is over. Profitability is the new mantra. In today’s market, investors are looking for companies that can demonstrate a clear path to profitability and sustainable growth.

To achieve this, it’s important to be disciplined about controlling your burn rate and tracking your cash flow. This means being strategic about how you invest your resources, and being willing to make tough decisions when necessary.

In addition, investors like to see high margins, high repeatability, and high capital efficiency. These are key metrics that demonstrate a company’s ability to generate sustainable returns over the long term. On the other hand, we prefer to see low levels of capital expenditure and working capital.

The current environment is challenging for everyone, but with the right mindset and strategy, you can weather the storm and emerge stronger on the other side.

Who is SVB?

In 1983, Bill Biggerstaff and Robert Medearis, former Bank of America managers, founded Silicon Valley Bank to cater to the specific needs of startup companies. The banking industry at the time had little understanding of startups, particularly those without immediate revenue streams. SVB recognized this gap and developed loan structures that accounted for the unique challenges faced by these companies, managing risk based on their business models.

At the end of 2022, SVB was the 16th largest bank in the United States and the largest by deposits in Silicon Valley, solidifying its position as go-to bank for venture-backed tech startups. Legendary venture capitalist, Michael Moritz, longtime partner at Sequoia Capital calls SVB “the most important business partner” in Silicon Valley over the past 40 years.

What happened?

The collapse of SVB, a trusted banking partner and venture lender to many tech companies and known as the “bank for private equity”, was a sobering event. With over 40 years of experience, SVB had developed a comprehensive product suite tailored to the needs of the tech industry, offering mortgages to executives, credit lines to VC funds to keep capital flowing, and venture debt to startups that larger lenders deemed uncreditworthy. Its global offices enabled it to serve VCs and startups worldwide, not just in the US, where it was a banker for 50% of tech and life sciences startups.

However, the bank’s downfall resulted from a fundamental mistake: investing in longer-term mortgage securities with over 10 years to maturity, rather than shorter-term treasuries or mortgages. During a period of historic lows in interest rates, SVB invested depositors’ funds in long-term treasury bonds. And as the Federal Reserve raised interest rates to combat inflation, the value of those bonds plummeted, causing an asset/liability mismatch and leading to the bank’s collapse.

SVB with a loan book worth $74 billion as of December 31, 2022, had a diverse portfolio of loans. About 56% of its loan portfolio was dedicated to loans to venture capital and private equity firms, which were secured by their limited partner commitments and used to make investments in private companies. Mortgages to high-net-worth individuals accounted for 14% of its loans, while 24% were to technology and health care companies, including 9% to early and growth-stage startup companies. According to Bloomberg, SVB’s loan portfolio included many lower-risk and lower-yield loans. The bank’s non-performing loans in 2022 represented only 0.18% of its total loans, suggesting overall good credit performance.

So what happens now that SVB is no longer available to serve the startup community in the US?

SVB’s absence in the startup community in the US is likely to have significant consequences. While Silicon Valley Bridge Bank has stepped in as a temporary successor, encouraging its clients to diversify their deposits and operations between banks, it appears that the damage is already done and most of SVB’s clients have already withdrawn their funds and switched to larger banks.

VC and PE funds that relied on SVB’s subscription lines of credit to bridge capital calls will face challenges. These lines of credit allow General Partners of a fund to delay the funding commitment from their Limited Partners for up to a few months. These funds will now have to establish new banking relationships to channel their capital call funding, which could cause delays in funding new investments and have downstream impacts on startups that require funding.

The rise of venture lending in recent years has been fueled by startups’ need to diversify their funding sources and reduce reliance on equity raises. According to PitchBook data, the second quarter of 2022 saw the second-largest total venture debt value in the past decade.

In 2022, more than $30 billion in loans were provided to US-based VC-backed companies, which showed an appetite for debt despite rising interest rates. As one of the largest venture lenders, SVB’s exit will create a gap in the market for technology companies seeking to raise debt. It is unclear if other venture lenders will step forward to cover this gap, especially for companies with undrawn SVB lines.

The Venture Debt Outlook Going Forward

The consequence of SVB’s demise may include higher capital costs and tighter cash flows for startups, leading to more distressed companies. SVB, which has been the largest venture debt lender and has offered attractive rates to startups, may face challenges in the future as it is likely to be sold to another bank. This could potentially make it more difficult and expensive for startups to secure debt capital. While there are over 170 active venture debt funds in the US, according to PitchBook, these debt funds may need to step up to gain a bigger share of the venture loan market.

A version of this article appeared on Genesis’ LinkedIn page on 21 March 2023.

From Parking Pandemonium To Soulful Serenity: Soul Parking’s Journey To Success

Kenneth Darmansjah is one of founders and CEO of Soul Parking, a technology-enabled parking solutions provider based in Indonesia. With his expertise in finance and business strategy, Kenneth has been instrumental in leading Soul Parking towards its mission of revolutionizing the parking industry in Indonesia.

Genesis talks to Kenneth about his journey and plans for Soul Parking.

Please share with us the origin story of Soul Parking. How did you come up with this ingenious solution to tackle the nightmare of motorcycle parking in Indonesia?

Picture this: you’ve just driven through Jakarta’s chaotic traffic, and your stress levels are already through the roof. You finally arrive at your destination, but finding a parking spot seems like an impossible task. And the population of motorized vehicles still rising in this hot and humid metropolis!

Having lived in Australia for six years, I asked myself, why is parking such a nightmare in Jakarta and yet more manageable elsewhere? What was even worse is that vehicle emissions are responsible for a whopping 70% of the city’s air pollution. To me, it became clear that the conventional parking business was no longer sufficient to meet the needs of Indonesia’s rapidly growing cities and was ripe for disruption. I was determined that there is a better and safer way for motorists.

That’s where Soul Parking comes in – with our innovative Compact Motorcycle Storage (CMS) and Soul Operating System (OS), providing hassle-free parking solutions. CMS is a multi-level portable parking solution for two-wheelers, while OS is a cloud-based software that digitizes existing parking buildings through data transparency provided for clients.

How did you come up with the interesting name, Soul Parking?

Soul Parking was hatched from the word “Soul” – where we wanted to convey a sense of comfort for drivers to experience hassle-free and stress-free parking amidst the chaos of the city. Interestingly enough, it also rhymes with the word “Solution”, both in English and Indonesian, and that reflects what we are trying to achieve through our innovative solutions.

What were some of the challenges you faced and how did you overcome them?

2020 was a turbulent ride for Soul Parking. Just one month after launching our first-ever Compact Motorcycle Storage in Central Jakarta, the global pandemic hit, resulting in stay-at-home orders and travel restrictions that heavily impacted our key target users: daily parkers.

However, we persevered and listened to feedback from our early users who appreciated the safety and convenience of our smart elevated parking system. To pivot our business strategy, we explored new revenue streams and partnerships, such as partnering with healthcare services to facilitate PCR tests, logistics companies, cloud kitchens, and automotive workshops.

Additionally, we invested in new technology that enabled automated parking systems, contactless payments, and real-time monitoring through our parking management dashboard. These initiatives have allowed us to weather the storm, successfully turning around our traffic volume to reach full capacity and broaden our services to cater to a wider range of vehicles and partners. Because of the challenges, we emerged stronger and more resilient than ever.

Let’s shift the focus to some of Soul Parking’s impressive achievements in the past two years. What are you particularly proud of?

Despite the challenging circumstances, we are proud to have secured over 30 locations in six highly saturated provinces across Indonesia, including some of the most congested areas like DKI Jakarta and Bali. Our partnerships with business owners and property developers in these areas have enabled us to cater to the high demand for parking and provide hassle-free solutions for millions of vehicles.

We are also thrilled that our innovative mobile app has been well-received by a diverse range of users. Our tech team works tirelessly to optimize its features, providing an intuitive interface and user-friendly design that allows for paperless ticketing, cashless payments, and monthly memberships. As a result, our mobile app has seen significant growth in users and high retention rates over time.

And in the face of economic uncertainty, we’re proud to prioritize healthy and positive unit economics, ensuring profitability across all sites. We’re pleased to report that we’ve been able to post a positive bottom-line at all sites, proving that our business model is resilient and not cash-burning. This is a humbling achievement for us and demonstrates our commitment to sustainable growth.

What and whom do you attribute your success to?

As an early-stage company, Soul Parking has only just started and we have a long way to go to achieve our ultimate goal of pioneering a leading tech-enabled parking solution in Indonesia. However, we have already accomplished some important milestones along the way.

Every day, I attribute our success to two groups of people. Firstly, I am grateful for the collective effort of each team member in Soul Parking who has contributed and played a crucial role in getting us where we are today. They are truly the backbone of our company, and without their support, we would not be where we are. I am grateful for our soulful talents who continue to push us beyond our limits and help us achieve greater success.

Secondly, the partners who believed in us and our mission to bring hassle-free, tech-enabled parking solutions to the chaotic streets across Indonesia. Our existing backers, such as Genesis Alternative Ventures, continue to provide strategic advice with key introductions that were instrumental in enabling us to achieve our milestones. All in all, we value all stakeholders’ support and are committed to ensuring that your trust in us continues to be well-placed.

What is your leadership style like?

As a leader, I believe that my role is to inspire and empower my team to achieve our collective goals. Drawing from my experience in the finance industry, I understand the importance of achieving results while maintaining a positive team culture. Rather than micromanaging, I take an empathetic approach to leadership, actively listening to my team’s concerns and providing the necessary support to help them succeed.

At Soul Parking, we have developed a set of founding principles that guide our team’s work: Simplicity, Openness, Unity, and Learn. By embracing these values, we strive for efficiency, encourage open communication, and foster a growth mindset. I encourage my team to share their ideas and celebrate diversity of thought, which I believe will lead to endless innovations and drive us towards our mission of revolutionizing parking.

Ultimately, I am committed to building a culture where every team member feels valued and supported, empowering us to reach our full potential together.

Do you have any advice for other founders of early-stage startups?

We know startups are a wild ride, but with the right mix of hustle, grit, and determination, you can make it happen. As a founder, it’s essential to have a clear and compelling vision that is grounded in a deep understanding of your target market. From there, focus on building a consumer-centric product and iterate until you find the perfect solution to solve your customers’ pain points.

Remember, your team is your greatest asset, so invest in building a strong foundation and the right culture from day one. Encourage open communication and empower your team to share their ideas and concerns. Together, you can overcome any challenges and achieve success. There are no shortcuts, but if you remain resilient, determined, and passionate, you will find your way to success. Keep pushing forward, and don’t forget to celebrate the small wins along the way.

Chris first joined Genesis in June 2022 as an analyst intern for six months. Upon successful completion of his internship and graduation, he joined Genesis as a full-time investment analyst in January 2023.

We welcome Chris back and asked him a few questions about this experience so far.

Genesis [G]: Hi Chris, please tell us more about yourself.

Chris [C]: I possess a keen interest in finance, investments and entrepreneurship, and recently completed my Bachelor’s Degree in Business Management at Singapore Management University (SMU), majoring in Finance (Banking). My ultimate goal is to be an entrepreneur, starting a company and growing it whilst helping to improve the lives of others.

Outside of work, I am an avid basketball fan, watching the latest games or classic match-ups of the 1990s. I also enjoy football, golf, hanging out with friends, reading and watching movies, or trying out new experiences and challenges.

[G] At university, you majored in Finance. What prompted you to choose Finance?

[C] I’ve always been interested in Finance from a young age. I first started investing in stocks in secondary school, and I enjoyed figuring out the story behind the numbers, such as why did sales of a company improve, how would the macroeconomic environment affect the company, what is their value proposition against competitors, etc, and forming my own thesis based on the information gathered.

The diverse and dynamic nature of Finance was very engaging and exciting to me, allowing me to tap on different skill sets and see the interlink between business, finance and economics.

[G] Please describe your typical workday, if there is such a thing!

[C] There is no such thing as a typical workday! The amount of innovation out there is amazing, especially in the tech industry. It is dynamic and constantly evolving, and there is always something new to learn every day!

The fast-paced environment keeps me constantly engaged, while on slower days, I research emerging industries and technologies, or topics which I am particularly intrigued by, such as Artificial Intelligence (AI), Blockchain, Crypto, Metaverse, or Mixed Reality (XR).

[G]: What was your internship experience like at Genesis and what prompted you to accept the offer of a full-time analyst role?

[C] I initially joined Genesis with no experience in the venture debt/capital industry; however, the team was very open and willing to guide and mentor me.

Being an intern at Genesis is great, if you are inquisitive and enjoy working in a dynamic and fast-paced environment. As long as you take initiative and ask, the seniors, including the Partners, are more than willing to teach you.

Interns are also given the opportunity to take on more responsibilities, such as being involved in a deal from origination to execution, including attending networking events, talking to startup founders, analysing the deal and culminating with a presentation to the Investment Committee (IC) for approval.

Genesis places a strong emphasis on learning and development, whereby the team are ever-willing to share about their experiences, be it during weekly discussions or through masterclasses.

Besides working hard, the team knows how to have fun too! For our bonding day, we went for a short hike, raced each other in the Luge at Sentosa, and ended off with a durian buffet!

The dynamic and challenging nature of venture debt investing, coupled with the positive culture at Genesis and the opportunity to further develop myself prompted me to accept the conversion offer and continue my journey with Genesis as a full-time analyst.

[G]: Any memorable experiences at Genesis you’d like to share? What did you learn from it?

[C] One memorable experience would be that I was fortunate enough to be involved in a deal that went to the IC stage, whereby I analysed and presented it together with my senior, Josias Goh.

Throughout the process, we held many discussions with the Partners, and it was exciting to pick their brains and gain insights from the feedback given by them. Besides that, the Partners and the team were also very supportive, and constantly checked in with me and shared their experiences, or gave tips for my own personal development, which is testament to the positive learning environment at Genesis.

[G]: You shared about web3 and crypto during your internship interview. Can you tell us what sparked your interest in this area?

[C] I first came across Crypto when talking to my friends, and started dabbling in it just for the fun of it.

As I researched further, I found the underlying Blockchain technology particularly intriguing, as it has many potential use cases which could help make our lives more convenient and productive. I was further piqued by Blockchain when I took a module in SMU called Financial Innovation, where I learnt more about how it works, and did a project on Stablecoins. Blockchain’s potential to change our lives truly fascinated me, and there is still so much more for me to learn about it!

The ambition of any startup was to become a unicorn. However, with the recent battering of the financial markets and the looming threat of a 2023 global recession, the pendulum of venture financing has swung from feast to famine.

Startups in Southeast Asia have not been spared from the “perfect storm”. Gone are the days when venture funding was readily available for “growth at all costs.” Instead, investors have been tightening their purse strings and prioritizing strong unit economics, sustainable growth, and conserving cash. Therefore it is not surprising that Founders are feeling anxious and looking for alternative sources of financing.

To explore the ecosystem’s perceptions of such an alternative financing instrument, venture debt, INSEAD GPEI collaborated with Genesis Alternative Ventures to survey founders, venture capital firms, and investors.

Read our whitepaper here: Click to download

Genesis welcomes our latest Limited Partner, OurCrowd, is a global venture investing platform that empowers institutions and individuals to invest and engage in emerging companies. OurCrowd manages more than $1.9B in committed funds for its 300+ portfolio companies and venture funds.

We sat down with Jon Medved (JM), Founder & CEO of OurCrowd. John is a serial entrepreneur and investor, who has been named by the Washington Post as “one of Israel’s leading high tech venture capitalists” and by the New York Times among the “top 10 most influential Americans who have impacted Israel.

Q1: You’ve been in the startup industry for a very long time. What is it that excites you about the industry?

JM: Startups are the lifeblood of technological innovation and progress. Decades ago, Lockheed Martin invented Skunk Works, and Xerox created Xerox Park, where the brightest minds could dream up big ideas unhindered by stultifying corporate red tape.

Today, the smartest companies in the world – including all the tech giants – realize that the only way to bring innovation into their products is to scout for startups developing relevant tech, invest in them, and snap them up. Today’s entrepreneurs have become Rockstars who are often celebrated and admired. They are responsible for building the world’s largest companies who have completely transformed our lives. Startups are developing the tech we need for computing, communication, and commerce, not just for the tech industry alone, but to address the critical issues of our time: food production, healthcare, clean water, sustainable energy and much, much more.

As a venture capitalist, I have the privilege of enabling visionary founders and innovators by connecting them with the investors who can fuel their startups and transform their dreams into commercial reality. Our companies literally save lives, heal the sick, and provide fresh food, water and clean energy where it’s most needed. They protect critical infrastructure from cyber-attacks. They provide the digital tools that help businesses grow. They entertain and they create employment. And when they succeed, they repay their investors many times over. It’s the best job in the world.

Q2: OurCrowd is a well-known equity investor and you’ve now launched a venture debt strategy. Can you tell us your rationale? What has been the reaction from your investors and startups?

JM: OurCrowd’s mission was always to democratize access to private markets, so in that sense it’s just a natural continuation of our journey. This initiative also came at a perfect time. Demand for venture debt is at an all-time high as entrepreneurs and investors alike realize its critical importance in the market.

This new debt product serves us in two ways. It allows us to further support our portfolio companies by offering them non-dilutive financing, which is highly relevant given the decline in valuations and the desire to avoid serious dilution from a down round. It also expands our value proposition to our investors with a cash-generating facility that provides steady income and much shorter duration than the equity investments. We are getting great feedback from both portfolio companies and investors for adding this new asset class, as evidenced by the oversubscribed Genesis first close.

Q3: Why did you choose to partner with Genesis?

JM: We decided to partner with Genesis because of the Genesis team’s strong domain expertise, with 40 years of VD/VC/PE experience and $100m+ venture debt deals executed. They are probably the most experienced venture debt team in Southeast Asia. The team’s performance speaks for itself in the early results from Fund I.

Genesis also gives us access to a unique market opportunity. Venture debt is growing strongly across Southeast Asia and high-growth companies that raise venture debt typically do so concurrently with an equity fund raise. In 2021, a record $621B was invested into global startups with $25B injected into companies in Southeast Asia. This represents a 3x increase over equity raised in 2020.

OurCrowd also likes to invest alongside strong LPs, like the Fund I investors who also decided to invest in Fund II and include some of the strongest institutional investors in the region. Moreover, we know many of the key members of the funds management for many years, and not only like them and appreciate them as fine human beings, but we continually are amazed by their talent and high ethical standards. When a great team addresses a huge and fast-growing market opportunity at the right timing, this is a good time to invest.

Q4: Where do you see the venture capital industry, especially venture debt, going in the next 5 years in SEA and Israel?

JM: A typical benchmark used by research analysts is to estimate the total size of the venture debt market as a percentage of total venture capital invested during a given year. Estimates are that the venture debt market in SEA represents ~2-5% and in Israel ~5-10% compared to 15-20% in the US. These two markets achieved fundraising records in 2021. Israeli startups raised $25.4b, a 136% increase on the previous year, while SEA startups raised $25.7b, a 167% YOY increase. We believe that the record VC money raised in 2021, maturing of the market and strong demand for venture debt amid the current global slowdown will continue to be the main drivers pushing the growth of this market.

Q5: How and where can startups in SEA and Israel collaborate together?

JM: Startups are shrinking the world. Cross-cultural collaboration is essential for innovation, because it breaks boundaries of thinking and attitude. Just look at how many of the top tech executives in the US are immigrants. One of Israel’s great strengths that has helped make our tiny country a global tech powerhouse is the fact that our population comes from more than 100 different countries, creating a rich cultural diversity that expands knowledge and thinking. Every time an Israeli startup begins a collaboration with a partner or customer from another country, it adds to its experience and effectiveness.

We are now seeing the same phenomenon in our new relationship with the Gulf states following the signing of the Abraham Accords, where Emiratis and Israelis are bringing different and complementary skills and experience to bear on a wide variety of issues and creating something brand new and even more exciting. In the same way, collaboration between startups in SEA and Israel can only enrich everyone involved and expand their horizons. Israeli companies can benefit from SEA skills in scale up and manufacturing, SEA companies can benefit from Israeli R&D prowess and deep tech innovation.

Q6: What do you look for in a founder or founding team?

JM: OurCrowd vets hundreds of startups every month and chooses perhaps one or two percent to add to our platform. Our founders must display technological excellence, relevant experience, original proprietary technology, good management skills and commercial sensibility. It is very rare for one person to have all those skills, so we tend to invest in teams of founders whose skills and experience combine to create the right group to establish, lead and build a company with a potentially commercial product. Moreover, we want to work closely with our teams, so it helps to like them!

Q7: What are the challenges and opportunities that you are seeing in the tech industry?

JM: The world is in crisis. We need answers to the critical issues facing our planet and its people. Startups can create the technology we need to fix the world. Just look at BioNTech, a startup founded by Turkish immigrants in Germany that created the vaccine marketed by Pfizer. Startups that tinker with problems that no-one needs to solve will not survive. But founders who identify a real problem, develop a practical, commercial solution and find a way to market will continue to succeed.

Q8: Any advice to founders on weathering the current downturn?

JM: This market correction was almost mandatory if you look at the soaring valuations of the past few years. Founders can no longer expect to enjoy the soaring double-digit price/revenue ratios that we have seen. There is still a lot of venture capital waiting to be deployed, but investors will want to see realistic business models and more modest spending. Founders should trim costs, extend their runway, and turn to alternative financing like venture debt instead of dreaming of huge cash injections from selling off tiny parcels of equity at high valuations.

Q9: What is your favourite movie and why?

JM: It’s A Wonderful Life. No explanation necessary.

Q10: What’s next for you?

JM: I have the greatest job and the cutest grandchildren in the world. I’m staying right here with them in Jerusalem, the most beautiful city on Earth.

We get it. Running a startup is a crazy roller coaster ride. That is why it is important to find and bring the right VC partners on board with you. You will probably meet many before deciding on a core team. And it all starts with a convincing pitch that is engaging, clear and concise.

When I googled “how to pitch my startup”, I got more than 42 million hits. I am sure most of the advice offered is sound, if a little generic.

Having worked in the startup ecosystem in both Silicon Valley and Southeast Asia, I have noticed that there is a difference in the way founders here approach their pitch. I have noticed that Southeast Asian entrepreneurs tend to be more conservative in their pitch approach and more reluctant to talk about their achievements (and I include myself in this category). There are many cultural reasons for this but such reticence does not serve startup founders well, especially when making their pitches.

Over the years, my team at Genesis and I have attended multiple startup pitch sessions and have given my share of feedback and useful tips to help founders in Southeast Asia sharpen their pitch. Here’s a quick summary of those feedback:

Be clear about your ask

It is perfectly fine to be upfront about what you are looking for – be it mentorship advice or an investment. Many founders feel shy about talking about money so early in a discussion but trust me, it is helpful for the VC to know your objective from the start.

For instance, if you are looking for funding, you can start by saying, “Thank you for your time today. I am looking for $6m funding for a 10% share of my agri-tech company.”

Or, if you are looking for strategic partnerships, “Thank you for your time today. I am looking for partners in the agri-tech and/or logistics space who can add value to my business.” It is also reasonable to seek introductions to business contacts or possible advisors.

Be proud of your mission and credentials

Once I sat in on a pitch from an edutech company and it was only after 5 or 6 slides that she revealed that she is a geneticist. Immediately that became interesting to me. What is the connection between genetics and education?

Most founders tend to have business, finance or engineering backgrounds. So when someone with academic achievements and industry experience turns up to share why they are on this mission, it certainly catches the attention of an investor.

Likewise, for your mission. Whether you are solving a payment problem or moving 1 ton of ugly food per day, if you are not excited about your mission, no one else will be.

So do speak with positive energy and conviction. I know this is not natural for many of us in Southeast Asia but it is important to “infect” the VC with your enthusiasm.

Be humble when receiving feedback

This sounds contradictory to #2 but it makes sense. The VC industry is a small one, particularly in our region. One of the first questions that VCs ask themselves is “can I work with this entrepreneur over the next 3-4 years and help build this business?”

“VCs invest in people, not ideas or technology.” Most investors are placing a bet on the founder’s ability to successfully handle the multiple challenges of growing a startup. And founders who are unable to handle a couple of tough questions in a pitch are less likely to raise money from investors.

So treat the feedback as a gift. An hour that a VC set aside to listen to your pitch may not end up in an investment. But the feedback could bring fresh perspectives, new ideas and insights for your business or even how to improve your pitch.

Be concise with your elevator speech

It is always good to be prepared to talk about your startup concisely. You’ll never know when you’ll meet a potential investor.

We suggest an elevator speech along these lines:

Think BIG: What is the end goal (e.g. save 10 tons of ugly food per day)?
Start SMALL: What are the low hanging fruits that you are plucking today?
Move FAST: How are you going to scale?

Starting with your Big Idea allows you to plant a seed into the investor’s mind. And if you get interrupted and don’t get to the other two parts of your elevator speech, at least you’ve communicated your mission. This leads me to the final point.

Be jargon free

Most VCs are finance- or economics-trained. A few of us are engineers by training. Even fewer of us were medical professionals.

While we may have picked up terms like “NFT”, “Metaverse” or “DAO”, it helps if you use layman terms in your pitch. Try pitching to your family or friends first; if they can understand what your business is about, the likelihood of an investor understanding it would be higher.

For an idea of a jargon-free pitch deck, do take a look at AirBnB’s early pitch deck.

Last but not least ….

The tech and venture market will have its up and down cycles. Whatever the climate, there will always be venture investors looking for the next unicorn or decacorn. When you get an hour of time with a VC or a partner, it is more important to be ready with your pitch. And be prepared to evolve that pitch deck. You will be fascinated when you see the 40th version compared to your first deck.

We wish you much success and hope that these tips are useful in helping you elevate your pitch and raising the next round of funds.

(A version of this article first appeared on LinkedIn on 21 July 2022.)

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It has been an incredibly busy two months for us at Genesis Alternative Ventures, the current market volatility notwithstanding.

In April and May, we took advantage of the reopening of global borders to visit our investors, partners, and portfolio companies in Tokyo, Seoul, and Indonesia. In May, we hosted our General Partners Advisory Board and Limited Partners to share the progress of the Fund and to discuss the macro-economic investment outlook. It was refreshing to catch up with everyone face-to-face and to reaffirm the trust that we built via two years of virtual meetings.

All the discussions I had were enlightening, insightful and relevant in the current market uncertainties and I thank everyone for sharing your thoughts and time so generously. As one good deed deserves another, I thought it would be useful to sum up and share my takeaways that might help guide us through these turbulent times:

Growth of venture debt : Amid rising interest rates and increased market volatility, private debt tends to shine and venture debt providers across Southeast Asia, India and the US are reporting a surge in deals and a growing pipeline.
Cash is King: With tighter funding market environment and falling valuations, startups should look for opportunities to consolidate and acquire good assets to strengthen their position while cutting back on cash burn to focus on profitability and preserve cash runway
Keep Calm and Carry On: Venture investors have indicated continued support for existing companies and will allocate more capital to their portfolio, instead of hunting for new ones. However, with freshly minted Southeast Asia venture equity funds like Jungle Ventures Fund IV ($600m), East Ventures multistage $550m venture and growth fund, Mass Mutual Ventures Fund II ($300m), there is still ample liquidity for early-stage companies seeking entry ticket funding. However, founders are advised to sharpen their pencils as the days of funding back-of-envelope ideas are gone.
There ARE Alternatives to TINA (There Is No Alternative): Navigating a challenging environment, sophisticated investors are pivoting from traditional portfolios that were based on a mix of public equities and fixed income. Increasingly they are looking for an alternative bucket of private equity, venture debt, and real estate where opportunities for better yields than liquid assets, with lower volatility and less correlation to headline risk.

Next month, we hope to share some insights on Founders’ sentiments from a survey of the entrepreneur community. I thank you in advance to all those who have kindly agreed to be surveyed and share your thoughts with us.

Disclaimer: The content in this article is meant to be informative and for general purposes only. It is not and shall not be construed as investment advice.

(A version of this article first appeared on LinkedIn on 3 June 2022.)

What a difference these past two years have made!

Whenever I was invited to speak about venture debt in the past, I always start by explaining to the audience that venture debt is a form of business financing that is tailored for venture-backed, high-growth startups who do not have the collaterals nor track record generally required by traditional banks. When used appropriately, venture debt is an attractive form of growth funding because it minimizes dilution of a founder’s (& early investors’) ownership stake.

Fast forward to February 2022 where I addressed a virtual room of startup entrepreneurs from SEA Founders – a community of growth-stage founders in Southeast Asia. I was very heartened by the sophisticated level of understanding about financing tools to power startup growth. Comparing this to when I first started out in venture debt in 2015, these founders have certainly become more acquainted with its use case.

However, I thought it would be useful to clarify some terminology and practices. This will be a handy guide for founders when talking to venture lenders as part of their next fund raise:

Convertible debt is not venture debt.

Venture debt is a bit like a mortgage loan. If we want to buy a house, the bank will provide us with a mortgage loan that we progressively pay down. Before we accept the loan, we would do our maths, asking ourselves, “how much do we have to pay on a monthly basis for this home loan? What are we comfortable with?” Once we decide, we don’t think about it much until the home bank loan is fully repaid. Once fully repaid, the house is ours.

On the other hand, convertible debt is where we borrow money to buy a house, but the lender has the option to decide if he wants the loan repaid in cash or take a portion of the house in return. Here the borrower has to deal with the uncertainty of whether a part of the house may eventually belong to someone else. Hence, a convertible debt is not venture debt.

Shares are not given free to lenders via warrants.

Due to the risk profile of a startup company, venture lenders will ask for warrants, which is an option to buy some shares in the company in the future at an agreed price. I think it’s important to understand that you’re not giving the equity warrants to the lender for free. The lender actually needs to pay and convert the option into shares of the company at a cost.

The way we describe it at Genesis is that we are investing debt into the portfolio company while simultaneously playing the role of small-time equity investor. Because we believe in your company, we’re willing to provide debt financing to grow the company. And because we have done our homework as an investor, we would love to be able to put some equity to play too.

Covenants can be used for instilling financial discipline

Many founders’ initial reaction to covenants is generally negative. However, I believe if designed reasonably, it can bring financial discipline and performance milestones for startups.

Early-stage start-ups tend to have big dreams. Founders would say to me “I am aiming for five million revenue this year and twenty million next year. Based on P&L. I think I am comfortable with a debt to equity ratio of forty percent, so I want to borrow five million dollars in venture debt.” But when we propose business and financial covenants around the loan, founders would come back and revise their projections e.g., “I can’t grow 4x within 12 months.”

A very canny CFO from one of our portfolio companies once shared that taking on venture debt has allowed him to introduce financial discipline within his startup. An example would be working out the mortgage repayment I described earlier and discipline is needed to make repayments on time. Having a venture lender onboard gives him the confidence that he has passed the stringent credit litmus test and he can confidently tell prospective VCs that he has a track record of being financially disciplined. Therefore covenants that are structured reasonably will help companies grow, rather than suffocate. Hence it would be useful to have a candid conversation with your venture debt lender on the purpose of the proposed covenants.

I hope the above “advanced level” clarifications about venture debt is useful for you. For an elementary overview of venture debt, please read this article on the “Top 10 Questions Every Founder Asks About Venture Debt.” If you have any questions on how venture debt can support your startup’s growth, please do not hesitate to contact me.

(A version of this article first appeared on LinkedIn on 28 February 2022.)

Did the angel investor, Han Ji-pyeong, in the Netflix show “Start-up” inspire you? While the hit K-drama series was fictional, it offered some interesting peeks into the start-up world and venture capital (VC) funding.

If you are keen on a career in VC, our Managing Director, Jeremy Loh, shares his career journey and some tips:

Genesis (G): How did you get started in the world of venture investing?

Jeremy (J): After completing my PhD in engineering and doing academic research at Imperial College, I returned to Singapore in 2004 and joined A*STAR, the R&D agency supported by the Singapore government.

Did you know A*STAR has more patents than Harvard or MIT? Yet few ideas were successfully converted into real businesses. I’ll share my experience to commercialise one of my patents. My team put together a business plan for an infectious disease diagnostic kit and went out to raise funds. That whole process made me realise that I did not understand the entire concept of starting and running a business.

I have a PhD and was backed by a top-class research team. But at the end of the day, if we cannot commercialise and turn that idea into a business, we are only half successful.

So I started looking at how I could gain experience with the business side of things and came up with two options: I could get an MBA, or join the venture capital industry as it straddled both the technological and the financial aspects of venture creation. Through serendipity, I was presented with an opportunity to join Bio*One Capital, a $1billion healthcare fund under EDBI that invested in medical devices, drug discovery development, stem cells etc.

Looking back, I realised that my entry in the venture capital industry was a transition. What I did was to leverage my domain expertise in precision and bio engineering to open doors into the financial industry.

G: I hear that the VC space is fast-paced and cut-throat. How true is this?

J: One thing that I can say for certain is that I have not had a boring day. Every day I am energised by start-ups and their ideas to solve a pain point through the clever application of technology. Today, it can be a medtech that can diagnose infections faster and tomorrow, it can be a fintech to serve the unbanked majority.

As for the culture, I can only speak for Genesis and the co-investors we partner with. We are family-oriented and collaborative – we constantly share deals with each other. This is an industry built on trust and if you want to go far, you have to build meaningful and positive relationships.

G: What do you look for when you hire?

J: Typically, venture capitalists hire MBAs, serial entrepreneurs, or people with corporate finance backgrounds. At Genesis, we believe in someone who wants to make a difference:

We look for an intellectually curious mind: someone who is not afraid to ask, “why not?”.

Someone who reads extensively to feed that curiosity.

Someone who challenges himself/herself to be in the shoes of the consumer or enterprise who would buy that product or service. This is the hardest skill to learn, as compared to getting a certificate in financial or technology. But it can be learnt.

G: Any pre-requisite technical skills?

J: You would need to have either a technical (engineering) or financial background to begin with. At Genesis, we will train you up and provide you with exposure to:

deal origination – networking in the startup ecosystem to get access to the best deals to invest capital
financial modeling with Microsoft Excel and analysing financial statements
Able to communicate confidently as you will have to present the investment opportunity to the leadership team and investment committee.

G: What advice do you have for undergraduates or fresh graduates who aspire to a career in venture capital?

J: One of the best ways is to serve an internship that is at least 6 months long with a venture fund or financial institution. Why six months? This is the minimum period you will need to gain valuable experience in how a deal flows from origination to execution. Not just one deal, but at least two or three different types of deals in different industries.

At Genesis, our internship program puts the interns through the same pace and vigour as though you are a full-time analyst in the firm. You will meet incredible founders and amazing venture capitalists. You will also work with a team that is fun and diligently trying to find that next Unicorn. We believe investing time to train up the next generation of venture investing talent will eventually have a positive impact for the Southeast Asia startup scene.

Our internship programme runs year-around so do drop your application at contact@genesisventures.co. We will contact you once a position becomes available.

Older Posts

Conversations with Olivier Raussin, Co-founder & Managing Partner of FEBE Ventures

Venture Debt: The New Normal Post-SVB

Soul Parking’s Journey to Success

From Intern to Analyst: Christopher Yap

Genesis [G]: Hi Chris, please tell us more about yourself.

[G] At university, you majored in Finance. What prompted you to choose Finance?

[G] Please describe your typical workday, if there is such a thing!

[G]: What was your internship experience like at Genesis and what prompted you to accept the offer of a full-time analyst role?

[G]: Any memorable experiences at Genesis you’d like to share? What did you learn from it?

[G]: You shared about web3 and crypto during your internship interview. Can you tell us what sparked your interest in this area?

Venture debt in Southeast Asia: Unlocking growth in uncertain times

Fireside Chat with Jon Medved

How to Pitch Your Startup in Southeast Asia

Business As Unusual: A Venture Lender’s View

Use Case of Venture Debt: Advanced Level

How to Start a Career in The VC Industry