Genesis

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.

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The term “funding winter” has permeated discussions from panels at tech conferences to casual cafe conversations over the last twelve months. The fundamental question pertains to venture capital liquidity constraints induced by prevailing macroeconomic and political challenges. Will these constraints persist in Southeast Asia, or can we anticipate a resurgence in funding levels to reach heights achieved in 2021? During that year, the tech sector in the region witnessed a historic high, with investments exceeding the unprecedented milestone of US$20 billion.

Let’s review the global funding trend over the past decade, encompassing venture capital investments into startups across the Americas, Europe, the Middle East, Africa, and Asia, including Southeast Asia. The chart below illustrates a consistent upward trajectory in funding from 2012 through 2022. Notably, 2021 emerged as an exceptional year, marked by an unprecedented surge in capital deployment with investments nearly 1.5 to 2 times higher compared to the preceding and subsequent years. As we approach the conclusion of 2023, it is important to acknowledge that the full-year funding figure is still awaiting final tallying. However, a preliminary estimate, based on a rough calculation, suggests that approximately US$340 billion may have been invested during this year. This would represent a dip from 2021-22 but on par with 2018 through to 2020 funding levels.

In retrospect, the venture capital landscape witnessed an unprecedented bull run in 2021, characterized by a substantial influx of investment dollars from both corporate and venture tourist investors into the startup sector. If we were to eliminate the 2021 funding spike from the chart above and draw a trendline across the past ten years as shown in the chart below, a compelling narrative emerges. Over this period, invested capital has displayed a consistent and progressive growth pattern, expanding by a noteworthy factor of 5 to 7 times.

What sets this trend apart is the discernible shift in capital allocation, with an increasing proportion being directed towards the Asia and EMEA (Europe, Middle East, and Africa) regions. This transformation in the funding landscape signifies a fundamental reorientation of global investment priorities within the tech and venture sectors. The significant surge in investment activity in 2021, driven by both corporate and venture investors, underscores the industry’s dynamic evolution and its resilience in the face of economic challenges.

In the context of venture funding in Southeast Asia, the second quarter of 2023 saw a notable increase, reaching a total of $2.1 billion. It’s worth observing that despite the increase in total funding, the deal count was lower during this period. According to CB Insights, Indonesia emerged as the leading recipient of funding in the region during 2Q 2023, with its startups securing $1 billion, an extraordinary 233% surge compared to the preceding quarter. Singapore (a base for Southeast Asia startups) closely followed with $914 million in funding, although this represented a 15% decline quarter-over-quarter.

The past quarters also witnessed an uptick in exits within the Southeast Asian startup ecosystem. This was particularly evident in the increased number of M&A exits for the second consecutive quarter. In this evolving economic landscape, more tech companies are grappling with the challenge of managing their liabilities and raising funding. As a result, an increasing number of these companies are opting to pursue mergers with larger competitors as a strategic move to sustain their operations and keep their businesses afloat. Startups are adapting to the challenges posed by evolving market conditions, which may include increased competition, funding constraints, or changing investor sentiment. Mergers and acquisitions can offer a viable path forward for startups seeking stability and growth, while also presenting opportunities for larger companies to expand their market presence and capabilities in the region.

In the current funding landscape startups are facing the imperative of planning for an extended runway as the process of closing financing rounds has become considerably protracted. Notably, earlier-stage companies, ranging from Seed to Series A, are finding it necessary to allocate up to 2 years for fundraising, representing an increase from the 16-month average observed just a year ago. Meanwhile, statistics reveal that later-stage companies, specifically those at the Series B stage and beyond, experience even more extended timelines, with fundraising cycles stretching to as long as 34 months.

Several factors contribute to these extended timelines, with one significant reason being the heightened focus of global VCs nursing their existing portfolio companies. Many VCs have slowed down their pace of new investments, with some openly admitting that they have not committed to new deals over the past 12 months. This trend has particularly impacted fund deployment, which has contracted by 25-30% in the current year, especially in regions like Indonesia and at the Series B+ stage. However, VCs remain active in earlier-stage cycles, notably at the Seed and Series A stages.

Despite these challenges, there exists a prevailing sentiment of cautious optimism regarding the future. VCs believe they will gradually increase their investment activities toward the latter part of 2023 and into 2024, provided that macroeconomic conditions continue to improve and unforeseen disruptive events are avoided. In the midst of this downturn, industry insiders, like Oswald Yeo, CEO of recruitment startup Glints, underscore the resilience and growth potential of the Southeast Asian startup ecosystem. Across various industries and verticals, a positive outlook toward sustainable growth persists, with a significant percentage of surveyed companies (86%) expressing their intentions to continue hiring in 2023. This challenging period is also expected to cultivate the emergence of strong founders who can weather such adversity, building businesses that can withstand even the most challenging circumstances.

Tech IPO Window Resumes Business, But Not Wide Open

Despite these challenges, there are positive offshoots returning to the public markets with several high-profile IPO listings leading the charge, which hopefully would trickle down to the private markets. The month of September 2023 witnessed a series of notable IPOs, underscoring the enduring interest in technology-driven firms seeking public equity. Among these, Arm Holdings plc, a Softbank-backed entity, stands out, with an IPO that initially valued the company at approximately $54.5 billion and at one point surging to nearly $72 billion. Arm Holdings specializes in the architecture, development, and licensing of high-performance, energy-efficient IP chip solutions, integral to the functioning of over 260 technology companies worldwide, including major smartphone manufacturers such as Samsung, Huawei, and Apple.

Another prominent tech IPO in the same period featured Instacart, a grocery delivery service, which, having been previously valued at $39 billion, debuted on the NASDAQ with a fully diluted valuation just surpassing $11 billion. Concurrently, Klaviyo, a marketing automation firm under the umbrella of Shopify, made its debut on the New York Stock Exchange, achieving profitability and obtaining a $9 billion valuation, substantiated by $345 million in raised capital.

Conversely, some startups have opted to defer their IPO plans. VNG Ltd, a Vietnamese internet company with backing from Tencent, chose to delay its $150 million U.S. IPO until 2024, citing the prevailing volatile market conditions. VNG was established in 2004 and hailed as Vietnam’s inaugural unicorn, operates across diverse sectors encompassing online gaming, payments, cloud services, and the preeminent Vietnamese messaging application, Zalo.

Singapore-based cancer diagnostics firm Mirxes has submitted an application to the Hong Kong Stock Exchange for an initial public offering, potentially becoming the first non-Chinese and non-Hong Kong-based biotech company to list under a specialized provision. This decision follows a $50 million Series D funding round, which ascribed a post-money valuation of approximately $600 million to Mirxes.

Industry analysis by PitchBook indicates a queue of nearly 80 IPO candidates including TikTok, Stripe, Discord and more who are lining up to go public. While there exists a discernible opening in the IPO window, investors are currently leaning toward a cautious stance for the remainder of 2023. Venture capitalists are advising their startups to consider deferring their IPO plans until interest rates have stabilized. The possibility of further interest rate hikes in the year, coupled with reduced expectations for rate cuts in 2024, could further influence market sentiment. Moreover, volatility in share prices for both Arm Holdings and Instacart underscore the necessity for prudence in the prevailing listing environment.

More Dry Powder Reason For Optimism In Thawing Of Equity Winter

In 2022, while the number of newly established funds experienced a decline, the total capital amassed by global funds reached an unprecedented pinnacle, totaling a staggering $162.6 billion. This achievement marked the second consecutive year in which capital inflows surpassed the significant milestone of $100 billion, defying challenging economic conditions.

According to DealStreetAsia’s 2Q 2023 report, Southeast Asian investors successfully raised an impressive US$3.72 billion in the first half of the year. Notably, the recent announcements have catapulted Southeast Asian venture capital firms beyond last year’s fundraising record of $4.14 billion. Pitchbook reported that the US largest public pension scheme, Calpers, which manages some $444 billion in capital, intends to increase its venture capital allocation by more than sixfold, from $800 million to $5 billion. These developments highlight a robust investor sentiment in the region.

Vertex Ventures, for instance, substantially exceeded its expectations by closing its fifth fund at a substantial US$541 million, surpassing its initial target of US$450 million. This achievement notably exceeded the US$305 million garnered for the firm’s previous fund, which concluded in 2019. Similarly, Monk’s Hill Ventures concluded its second fund at a remarkable US$200 million. Additionally, Singapore’s Temasek announced its strategic collaboration with the National University of Singapore and Nanyang Technological University Singapore, committing US$55 million to foster the commercialization of deep-tech ventures emerging from the research pipelines of these esteemed institutions.

The VC market landscape has undergone a notable transformation, shifting away from its traditional startup and founder-centric ethos to one that is more favorably inclined toward investors. Several key drivers underpinning this transformation include the widening gap between capital demand and supply, coupled with a discernible decrease in valuation upticks across various developmental stages.

In light of this evolving landscape, VCs are poised to continue deploying their capital; however, the terms of these deals are expected to skew more positively towards investors. Consequently, entrepreneurs are faced with the imperative to refine their business models and present a meticulously delineated roadmap toward achieving cash breakeven and profitability. Those entrepreneurs who can exhibit robust unit economics and pragmatic growth projections will find themselves in the most advantageous position when competing for coveted VC investments.

Developments In The Venture And Private Debt Sector

Smart money continues to flow into private debt, drawn to the favorable risk-adjusted returns and with plenty of headroom for future growth. The collapse of Silicon Valley Bank (SVB) in March 2023 did not dampen the appetite for venture debt, a subset of private debt. Banks across the world have jumped into direct lending to startups, seizing opportunities in a post-SVB era. HSBC picked up some of SVB’s assets and its team and went on an aspirational strategy to become the next SVB. HSBC announced a $3 billion Hong Kong/China fund and separately a $105 million (RM500 million) Malaysia New Economy fund that will be dedicated to providing high-growth, innovative companies with a suite of tailored debt solutions in their respective jurisdictions. In Japan, Aozora Bank announced its third $60 million (¥9 billion) venture debt fund for local start-ups, while MUFG launched two new venture debt funds worth $400 million for Japanese and European startups, reflecting strong funding demand as the market for initial public offerings remains dull.

BlackRock Inc estimates that between the end of 2018 and the end of 2022, the private credit market doubled in size from roughly $750 billion to $1.5 trillion. To further deepen its private credit offerings, BlackRock acquired Kreos, a provider of growth and venture debt in technology and healthcare in Europe and Israel who has committed around $5.6 billion in over 750 debt transactions, demonstrating strengthening investor demand for exposure to venture debt and private credit.

Venture Debt Dealflow

In the US across all stages, startups closed $6.34 billion across 931 venture debt deals in the first half of 2023, compared to $20.07 billion across 1,513 deals in the same period last year. The diagram below shows the debt committed to startups across different stage of development. While the debt commitment has reduced across all stages, it is more evident for early-stage startups. One possible reason could be the collapse of SVB who primarily operated in the early-stage market, sometimes lending to pre-revenue companies, while its new owner, First Citizen Bank, does not expect to step up to fill that void.

Debt capital remains in high demand among startups as companies turn to alternative financing. The number of new and repeat debt financing conversations has certainly increased. Lenders are however becoming pickier and seek more favourable covenant packages and warrant coverage, in addition to higher interest rates. Lenders also wants additional comfort that startups are on track to receive future investment and that their investors remain committed to the company. While lenders can benefit from a rise in interest rates, the converse is an increased loan repayment risk as increased cost of borrowing and tighter covenants means that borrowers need to operate within their means.

Funding Outlook For The Next Six To Twelve Months

The million-dollar question is how the rest of 2023 and 2024 looks like for the venture and tech sectors? Not to oversimplify things, there seem to be two groups of startups in the market currently: those that have raised funding in 2021/2022 (albeit at a high valuation) but that have adapted to the volatile market, conserved cash and growing sustainably; and another group that has continued to trailblaze growth but that has run out of funding and struggled to raise capital. Valuation expectation will need to be moderated and lenders are certainly witnessing an increase of queries for debt financing with or without new equity injection. In all certainty, entrepreneurs will need to start funding conversations much earlier in anticipation of the longer process.

Venture investors that take the brakes off and continue to invest in startups that have undergone business and capital rationalisation at an attractive entry point valuation may be capitalizing on being ahead of the herd with significant de-risking as the company has demonstrated added traction. The revival of startup funding over the next 6-12 months is intrinsically linked to several key factors reshaping the entrepreneurial landscape. As venture capital firms find themselves flush with more dry powder, they are eager to channel these resources into startups that have proven their ability to survive a major down cycle. This surge in available funding, combined with a slowly opening IPO market, creates a symbiotic relationship where startups have a clear path to exit strategies that appeal to investors. Moreover, startups are emerging from recent challenges as leaner and more efficient entities, well-equipped to maximize the capital they receive. This newfound efficiency not only instills confidence in investors but also ensures that the funding received is utilized effectively, ultimately fuelling the remarkable resurgence of the startup ecosystem.

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.

Neuron Mobility: Pioneering Sustainable Micromobility Internationally

Neuron Mobility, a leading Singapore-based shared e-scooter and e-bike operator, has swiftly gained prominence in the dynamic world of micromobility. As cities increasingly look for sustainable and safe transportation solutions, Neuron’s success in winning competitive tenders from forward-thinking cities underscores its reputation as an innovative urban mobility partner.

Since its inception in 2016, Neuron has been responsible for many e-scooter innovations. This has led to remarkable growth and the company now operates in 35 cities worldwide Neuron is the leading operator in Australia and New Zealand, and Canada, plus it also has operations in the United Kingdom.

In a conversation with Neuron Mobility’s CEO, Zachary Wang, we delve into the company’s origins and growth trajectory:

Tell us the origin and growth story of Neuron Mobility?

In 2016 my co-founder Harry Yu and I started Neuron in Singapore with the world’s first docked e-scooter system and the following year we rolled out the first shared e-scooter programme. The micromobility industry as we know it today did not exist back then, so in many ways, we had to pave the way as there were very few guidelines or other operators to learn from.

After testing our service in different cities across Southeast Asia for market fit, we made the strategic decision to concentrate our efforts on more regulated markets, with higher disposable incomes and better infrastructure for e-scooters and e-bikes.

Fast forward to today, Neuron is now the leading rental e-scooter company in Australia and New Zealand and as we complete our third year, in Canada we are the dominant micromobility operator there as well. Neuron now has a presence in over 35 cities around the world including Melbourne and Brisbane in Australia, Calgary in Canada, and Newcastle in the UK. We have learned a lot over the last few years and are incredibly excited about the opportunities for the future.

What is Neuron doing differently to achieve success where others have stumbled?

Neuron is first and foremost a tech company and we are well-known for innovating within the micromobility sector. We have introduced a long list of pioneering features like swappable batteries, integrated helmets, and advanced geofencing. It is not an exaggeration to say we have been leading the industry when it comes to introducing new technology.

Designing and building our own e-scooters and the systems that run them enables us to innovate quicker and more efficiently than other operators. We recently launched our all-new N4 e-scooter, the most rider-centric, sustainable, and toughest e-scooter ever built. It is purpose-built to win city contracts, increase our market share of riders, and importantly, lower our operational costs which significantly improves unit economics.

Another differentiator is our willingness to partner with cities – we often innovate specifically to meet their needs and they really appreciate this. We also prioritise safety which is a cornerstone of the company and this has helped us build trust among our most important stakeholders.

What are some of the positive impacts that Neuron’s e-scooter service is having on cities?

Our e-scooters make a significant positive impact in cities where we operate. They are replacing car journeys and in doing so, reducing harmful emissions and congestion. Additionally, e-scooters are a strong driver of prosperity, enabling riders to see more, do more, and spend more. Recent research showed two-thirds of all Neuron trips resulted in a purchase at a local business and in Australia, each e-scooter contributes a massive AU$70,000 per year to the local economy.

Our e-scooters have a broad appeal and the global gender split is now 60% males and 40% females, with more younger women than ever before using them to travel. Research has also shown that 5% of our riders have a disability or mobility issue, with many highlighting their benefits for allowing them to travel further and more frequently. We are also a local employer who invests in our people so they can advance their careers.

As cities worldwide strive for a more sustainable future, we’re proud to be providing a mainstream transport service that is delivering positive outcomes in the communities we serve.

Why did you pick Genesis as your venture lender?

We always strive to partner with organisations that deliver tangible value to our business. The Genesis team is no exception, they have played a vital role in helping to fuel Neuron’s international growth and technology leadership. This will continue to help drive us forward as we support more cities to achieve their sustainability goals.

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.

—

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.

PT Super Bank Indonesia (Superbank) and Genesis Alternative Ventures (Genesis), Singapore-based venture lender, have launched a financing solution, with both entities committing up to IDR 600 billion ($39.38 million) to back innovative Indonesian startups. The financing solution combines the principles of conventional bank credit and venture capital investing to target Indonesian technology startups while extending working capital to technology startups with minimum dilution of shareholder equity, the duo said in a statement on Thursday.

For full TechNode Global article (31 August 2023)

Superbank, the Indonesia-based digital bank backed by Grab, Singtel, and Emtek Group, is partnering with Singapore-based Genesis Alternative Ventures to provide US$40 million worth of financing for Indonesian startups. In a joint statement, the companies said that the financing will combine conventional bank credit and venture capital investment, while minimizing equity dilution for shareholders. They will also primarily target firms at the series B and series C stages.

For full TechInAsia article (31 August 2023)

Indonesian digital lender Superbank has partnered with venture lender Genesis Alternative Ventures (Genesis) to launch a 600-billion-rupiah ($40 million) financing facility to support innovative local startups. The financing solution combines the principles of conventional bank credit and venture capital investing to target Indonesian technology startups, according to the announcement. The platform also seeks to extend working capital to tech startups with minimum shareholder equity dilution, focusing on venture-backed high-growth startups in the archipelago, particularly those at the Series B or C stages.

For full DealStreetAsia article (31 August 2023)

Berita startup hari ini mengenai PT Super Bank Indonesia (Superbank) telah menjalin kemitraan dengan Genesis Alternative Ventures (Genesis) untuk meluncurkan fasilitas pembiayaan senilai Rp 600 miliar bagi perusahaan rintisan atau startup di Indonesia. Pembiayaan ini merupakan gabungan antara kredit bank konvensional dan investasi modal ventura. Dengan fokus pada startup teknologi, pembiayaan ini juga menyediakan modal kerja dengan pengurangan minimal terhadap ekuitas pemegang saham. Pembiayaan ini akan ditargetkan untuk startup pada tahap pendanaan Seri B dan Seri C.

For full Dunia Fintech article (1 September 2023)

Superbank, the Indonesia-based digital bank backed by Grab, Singtel, and Emtek Group, joined hands with alternative lender Genesis Alternative Ventures to launch an IDR 600 billion (US$40 million) financing solution to back innovative local startups.

The solution combines the principles of conventional bank credit and VC investing in targeting technology startups while extending working capital to them with a minimum dilution of shareholder equity.

The focus will be Series B or C-stage companies.

For full E27 article (2 September 2023)

PT Super Bank Indonesia dan Genesis Alternative Ventures menjalin kerja sama pembiayaan senilai Rp 600 miliar kepada startup Indonesia yang melakukan inovasi. Direktur Utama Superbank Tigor M Siahaan mengungkapkan, Indonesia merupakan negara dengan ekonomi digital terbesar di Asia Tenggara. Pertumbuhan ekonomi digital diproyeksi hingga delapan kali lipat dari Rp 632 triliun pada 2020 menjadi Rp 4.531 triliun pada 2030. “Indonesia memiliki potensi dan peluang untuk semakin mengembangkan startup lokal dan ekosistemnya. Kami bekerja sama dengan Genesis menghadirkan sumber pembiayaan bagi startup Indonesia yang inovatif,” ungkap Tigor dikutip Investor Dialy, Jumat (1/9/2023).

For full Berita Satu article (2 September 2023)

PT Super Bank Indonesia (Superbank) dan Genesis Alternative Ventures (Genesis) berkolaborasi memberikan dukungan perusahaan rintisan (startup) di Tanah Air. Kedua entitas ini sepakat memberikan dukungan pembiayaan hingga Rp600 miliar. Solusi pembiayaan ini mengkombinasikan prinsip kredit bank konvensional dan investasi modal ventura untuk menarget startup teknologi Indonesia. Termasuk untuk menyediakan modal kerja bagi startup teknologi dengan dilusi minimal terhadap ekuitas pemegang saham.

For full Kabar Business Article (2 September 2023)

PT Super Bank Indonesia (Superbank) and Genesis Alternative Ventures (Genesis) have launched a financing solution worth US$39.3 million, or equal to Rp600 billion, to back the startup industry in Indonesia. The financing solution combines the principle of conventional bank credit and venture capital investing, targeted at Indonesia’s technology-based startups, while extending working capital to technology startups with a minimum dilution of shareholder equity. The collaboration between these entities emphasizes their strategic plans to empower Indonesia’s startups, specifically those at the Series B and C funding stage, to realize their further enhancement.

For full Heaptalk article (3 September 2023)

PT Super Bank Indonesia (Superbank) collaborated with Singapore-based venture capital Genesis Alternative Ventures (Genesis) to provide US$39,38 million in startup funding. Superbank President Director Tigor Siahaan said the funding would target startups with a minimum dilution of stakeholders’ equity. “Funding access plays important roles in developing innovative businesses,” Tigor said on Sept 1, 2023. The Superbank-Genesis funding has been targeting startups that are currently on the B or C Series of funding. Genesis Co-Founder and Managing Partner Jeremy Loh said Indonesia possessed great potential for technology-based businesses, thanks to a huge number of digital talents. “Genesis and Superbank have committed to support more Indonesian startups, in the middle of venture capital funding decreasing trend up to 60 percent from year to year,” said Loh.

For full Kata Data article (4 September 2023)

Aonic: Revolutionizing Dronetech in Southeast Asia

In an exclusive interview, Cheong Jin Xi (JX), the visionary founder of Aonic, formerly known as Poladrone shares insights into the company’s journey, challenges, competitive advantages, and future aspirations.

The agritech sector in Southeast Asia is undergoing a transformation, thanks to Aonic, formerly known as Poladrone. Founded in 2016 by Cheong Jin Xi (JX), the company recognized early on the potential in the agritech space and has remained steadfast in addressing its unique challenges.

Aonic secured a significant seed funding round from Wavemaker Partners, Malaysian Technology Development Corporation (MTDC), ZB Capital, Genesis Alternative Ventures, and others.

We sat down with JX to delve deeper into the company’s journey, drone technology, and its impact on the agricultural industry.

Can you tell us about the Aonic origin story?

My journey with drones began before the birth of Aonic when my passion for flying objects led me to pursue an aerospace engineering degree. Our initial goal was simple: to make drones accessible to everyone, hence the name ‘Poladrone,’ a playful blend of Polaroids and Drones. This ethos still defines our company today.

Initially, we offered basic photography services, but we quickly pivoted towards providing analytics services across various sectors, including agriculture, oil & gas, telecommunications, and surveying. We realized that the true value of drones lay in the data we could capture at scale. As our analytics solutions matured, we received feedback from customers highlighting a pressing issue: labor shortages, particularly in agriculture.

This insight drove us to develop two specialized agricultural spraying drones: Oryctes, designed for precise point-to-point spraying in oil palm plantations, and Mist Drone, tailored for blanket spraying in open field crops. These drones are complemented by our AI-assisted aerial mapping software, Airamap Desktop, and the Oryctes Flight App for seamless flight planning.

Over the years, we’ve sharpened our focus on the agricultural industry. While other segments like surveying and mapping remain lucrative, we see agriculture as our primary growth area. In Southeast Asia, farms continue to rely on slow, inefficient manual labor. The opportunity for impact is immense. Today, we’re dedicated to integrating ourselves into the agricultural value chain by establishing 3S (sales, service, and spare parts) centers across key agricultural areas.

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

While drones are widely known, many still associate them primarily with photography and recreational use. Awareness regarding enterprise and agricultural drones is lacking. This lack of awareness is just the first hurdle; the subsequent customer journey involving affordability, usage, and support is also broken.

To address these concerns, we took an ecosystem approach. This led us to establish our 3S centers and, more recently, the Aonic App. Together, these elements form a physical and digital ecosystem, serving as our center of excellence, an information-sharing hub, and an after-sales support provider. In simpler terms, it’s where we educate our customers, provide financing options, offer training, and service their drones physically and digitally.

What competitive advantages does Aonic hold over other drone solution providers?

Aonic’s competitive edge is twofold:

Product: Our products are proprietary, backed by patents. We design and manufacture the electronics of our drones in-house. In contrast, many drone providers source components from China, leaving them vulnerable to supply chain disruptions and confined within distribution territories.

Strategy: As I mentioned earlier, we’re building an ecosystem. Beyond our 3S centers and Aonic App, having proprietary products enables us to seamlessly integrate our drones with our solutions. For example, we can link Airamap Desktop, Oryctes Flight App, and Oryctes Drone for a seamless flight experience. Many drone solution providers focus solely on hardware sales, neglecting the broader customer journey.

Can you share some specific examples of how Aonic has successfully helped enterprises enhance their operations?

Certainly, let’s consider Sime Darby Plantation as an example. Traditionally they relied on conventional pesticide spraying methods, which posed challenges in terms of consistency, productivity, and worker safety due to labor shortages and chemical exposure.

With our Oryctes drones, they witnessed significant improvements in efficiency, outperforming manual spraying methods by up to 8 times. Furthermore, they gained valuable insights into chemical usage, which brought them closer to their Sustainable Development Goals. This includes reducing deforestation by improving yield per hectare, upskilling local talents, and enhancing workers’ quality of life.

Now, let’s consider a smaller-scale success story featuring Encik Ab Rahim, a smallholder farmer managing a 5-hectare paddy field. While he had been aware of agricultural drones and their potential benefits for several years, it was the establishment of an Aonic 3S center nearby that prompted him to embrace this innovative technology.

The presence of the 3S center gave him the confidence that Aonic would provide the necessary long-term support, including spare parts, maintenance, and knowledge sharing. Furthermore, Encik Ab Rahim availed himself of Aonic’s financing program, a strategic initiative that substantially lowered the barriers to drone ownership. The added benefit of free maintenance served as a compelling incentive for him to make the leap towards drone-assisted farming.

The adoption of Aonic’s Mist Drone marked a pivotal moment in Encik Ab Rahim’s agricultural journey – introducing higher levels of consistency and precision to pesticide spraying, while effectively eliminating the irregularities associated with manual methods. This boost in efficiency translated directly into a significant increase in his income, from $2,000 to $3,000.

Beyond the financial gains, the Mist Drone also offered intangible benefits. Given that Encik Ab Rahim is over 60 years old, he was no longer required to laboriously wade knee-deep into the paddy fields for extended periods. Thanks to the capabilities of the Mist Drone, he could now effortlessly cover his entire field, saving both time and energy.

The story of Encik Ab Rahim serves as a testament to the real-world impact of Aonic’s agricultural drone solutions, underscoring their capacity to not only drive financial growth but also enhance the quality of life for smallholder farmers.

Looking into the future, what are some of the key areas of growth and expansion that Aonic envisions beyond its current offerings?

We see our growth driven by two main aspects: providing more value add and expanding our 3S centers.

We aim to broaden our horizons by venturing into other agricultural products, offering more value along the agricultural value chain. Our ultimate goal is to become a one-stop platform for all agricultural needs.

Our relentless commitment to 3S center expansion will continue for the next 2-3 years. Agriculture is built on trust, and being closer to the community strengthens that trust. In the coming 1-2 years, we plan to focus on Thailand and Vietnam, two of the top three global rice exporters, while further fortifying our presence in Malaysia.

Can you share some insights into the team behind Aonic? What expertise do they bring to the table, and how does their collective experience contribute to the company’s success?

Our team operates on a fundamental principle: ensuring that our solutions offer sustainable value and sound unit economics, rather than pursuing unsustainable growth and burning through cash. Because of our financial prudence, we are already profitable.

We value team members with clear, logical thinking and a focus on execution, allowing each member to contribute according to their respective expertise. Moreover, we place a strong emphasis on past experience in traditional industries relevant to our services, such as agriculture and surveying. This enables our team to connect better with our customers.

We believe in internal training and development rather than hiring from competitors, as it helps foster the right approach and culture towards the technology.

With the rapid advancements in drone technology, how does Aonic stay ahead of the curve in terms of innovation and adapting to changing industry trends?

Maintaining a growth mindset is key to staying ahead in the ever-changing drone industry. Being young and dynamic, the industry is constantly evolving, and we must adapt continuously to remain relevant.

Our unique advantage lies in our ability to closely collaborate with some of the most advanced drone companies in China. Many of our team members are fluent in Mandarin and work collaboratively across various departments, from commercial to operations and research & development. This provides us with a front-row seat to upcoming technology trends before they are shared globally.

As Aonic continues to spread its wings, expanding its 3S centers and venturing into new horizons, they’re proving that the sky’s not the limit; it’s just the beginning. So, stay tuned, because in this drone-driven world, Aonic is the company that’s taking agriculture to new heights, one flight at a time.

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.

PRESS RELEASE

Superbank and Genesis Alternative Ventures Launch IDR 600 Billion Financing Solution for Innovative Indonesian Startups

The collaboration marks a significant milestone as Superbank expands support to local entrepreneurs and MSMEs
Targeting VC-backed, high-growth technology startups in Indonesia

Jakarta, 31 August 2023 – PT Super Bank Indonesia (Superbank) and Genesis Alternative Ventures (Genesis), Southeast Asia’s prominent venture lender, have launched a financing solution, with both entities committing up to IDR 600 billion to back innovative Indonesian startups.

The financing solution combines the principles of conventional bank credit and venture capital investing to target Indonesian technology startups while extending working capital to technology startups with minimum dilution of shareholder equity.

This collaboration between Superbank and Genesis underscores the determination of both entities to empower startups in Indonesia, particularly those at the Series B or C stage, to realize their full potential.

Tigor M. Siahaan, President Director of Superbank, said, “As the largest digital economy in Southeast Asia, which is expected to grow eight times from IDR 632 trillion in 2020 to IDR 4,531 trillion in 2030, Indonesia has the potential and opportunity to further develop local startups and their ecosystem¹. We are thrilled to partner with Genesis to provide a powerful financing avenue for innovative Indonesian startups. In today’s dynamic business environment, access to funding is crucial for these innovative ventures to thrive. This partnership exemplifies Superbank’s unwavering commitment to supporting local entrepreneurs and MSMEs and driving sustainable growth.”

Jeremy Loh, Co-founder & Managing Partner Genesis Alternative Ventures, said, “Indonesia is brimming with opportunities in terms of local startups and tech talents. Genesis and Superbank share the same commitment in tapping the huge potential of this sector and supporting more startups in Indonesia given the notable 60% year-on-year² decline in venture capital funding for startups the Asian region has witnessed.”

This collaboration marks a significant milestone in Superbank’s transformation into a digitally-focused bank that just started 6 months ago.

For further information, please contact:

Andre Sebastian
Public Relations Lead Superbank
public.relations@superbank.id

Keshie Hernitaningtyas
Brightminds for Superbank
superbank@brightminds.co.id

About Superbank
PT Super Bank Indonesia (Superbank) is a bank that’s currently transforming into a digital-based services bank. Superbank is the new brand that replaces PT Bank Fama International, a commercial bank that was founded in Bandung, 1993 which was taken over by the EMTEK Group, Grab and Singtel in 2021. Superbank has received various awards, such as “The Most Efficient Bank in the Group of Banks Based on Core Capital (KBMI) 1 Category” from Bisnis Indonesia Financial Award (BIFA) 2022. As a newcomer in the Indonesian digital banking sphere, Superbank has a mission to expand access to credit for MSME customers in managing their businesses, provide innovative solutions for retail customers, and foster collaboration through one of the industry’s most extensive ecosystems.

For further information on Superbank, please visit www.superbank.id.

About Genesis Alternative Ventures
Genesis Alternative Ventures is Southeast Asia’s leading private lender to venture and growth stage companies funded by tier-one VCs. Genesis is founded by a team of venture lending pioneers who have backed some of Southeast Asia’s best loved companies. Armed with a strong reputation among entrepreneurs and investors, Genesis is a trusted partner in empowering corporate growth while minimising shareholders’ equity dilution. Genesis was founded by Ben J Benjamin, Dr Jeremy Loh and Martin Tang in 2019.

For further information on Genesis Alternative Ventures, please visit www.genesisventures.co.

¹ Communications and Information Ministry press release (26 September 2022)

² Communications and Information Ministry press release (12 December 2022)

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.

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