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- nus angel venture
The Working Relationship between Startup & Investor [Varun-Founder of The FinTech Nation]
Fundings & mentorships from angel investors can significantly accelerate development of young startups. Of course, it comes along with certain obligations that you need to deal with as a startup founder. Investors would expect their money to be put to good use as soon as possible. What are some of the agreements that should be set in the initial phase? How can startups and investors maintain a good working relationship in a long term?
In this blogpost, we have Varun here to share with us!
Varun is experienced at the cross-section of digital business building and financial services in Southeast Asia, as well as global emerging markets.
1) Hi Varun! Can you start off by sharing more about yourself?
I’m a partner at a consulting firm, leading the financial services, engagements, and leading the fintech practice here. I’ve been here around 3-4 years, before that, I was running a startup acquired by a financial crew, all along I’ve been working with different kinds of startups as an advisor, mentor and investor. All of these past experiences have gave me the exposure to how startups operate and their challenges. Some of them have reached an acquisition stage, some of them have exited out already, and having been at the cross-section of seeing different roles and playing different roles at the same time has actually helped me a lot to support startups and financial services.
I was inquisitive and wanted to see what comes off, and try, and because the cost of failure at that age is so low, that’s why I gave it a shot in this startup industry.
2) What sparked your interest in investing in startups?
When I was about 25, I was looking at some companies, and thinking whether they make sense. The 1st motive was not mainly about investing. The first motive was having skin in the game, and sometimes you’re lucky- because the startup might succeed in years later. Success is a great teacher and failure a bigger one, so you learn from both. I enjoy this journey of never-ending learning.
3) To date, how many companies have you invested in and are there specific sectors that you look out for?
I look at it from a Warren Buffett model of view. If you don’t understand it, don’t do it. I understand primarily consumer internet, digital marketing, financial services, so I only do those. Some are direct and some are indirect. I don’t keep track but probably around 10 to 15 startups or maybe more. Angel investing is not like the stock portfolio that you’re looking at on a laptop every day, stuff doesn’t change every day. There’s a lot of private investments, with average outcome of 7-10 years, it may be months before an update, so that’s something important to look at with the patience and commitment.
4) Personally, how often do you feel that investors and startups should meet?
As an investor- if he is going to be adding value, then startups should talk to them as frequently as you need to. But it shouldn’t be a drag, meaning if you’re thinking you should get an update every month, then you shouldn’t. The job as an investor is to help the founders, not act like the founders and assume that you’ll be valued and everything.
Sometimes advice has real value, but a lot of the times you’re not in the ring and you don’t know what the guy is going through. There are examples: for instance, there was a week that I was talking to them 5 days a week and for the next 2 months, I didn’t.
During the intense 5 days, the team was in the middle of a fundraising negotiation, and they wanted to understand specific laws and figure out how to negotiate a specific thing or rehearse a specific pitch. I did not want to disturb the business once they went back to executing. I am there it they need me. if they do not need me, I won’t bug them.
Agreed! Would you say it’s kind of having a child of your own, so when your child grows up already then it’s letting him/her do their thing?
There is a slight difference. The parent has the best interests of the child at heart, and the parent probably knows about most things more than the child, but that’s not always true of the investor. Most investors have a day job and are doing other stuff already, so there are times they would, but it’s not that frequent. A lot of angel investors overestimate their contribution and the value of their contribution, so that’s something most investors will not see because they think they’re valued, but actually, they’re not that valued.
5) Personally for yourself, what is your expectation of an exit time and returns, when do you know it’s the right time to exit?
I don’t. My biggest success were the ones that approach me at the initial phase, but I did not want them at the time. But when they resurfaced and their time was coming, I worked with the team to orchestrate it and work together from then on. I wanted to guide them and it reminds me of all the stuff done well. You don’t want to sell it, you want it to grow further. It’s similar to how you can’t time when you fall in love, for example, you can try to date or start finding people, but you don’t know the exact time.
The key question is that when you’re in that position, what do you do then? How do you position yourself best? You cannot define it, example for me, it’s simple. Don’t lose money, I’m old school that way, do your best, as long as you’re content at the end of the day that you did your best then stuff works/stuff doesn’t work, it’s okay!
6) Lastly, what interested you to come aboard with NUS Angel Ventures?
I wanted to start something similar to NAV 5-6 years ago, and I failed. Then, I had an intern in my day job and he mentioned that this was something that he said he was going to try, and I said “Nice! I tried 5-6 years ago and here’s how I failed and here are all the mistakes I had, you can use it! I’d be happy for you to succeed where I failed, and I’d be happy to help you not make the mistakes I did, and if you make mistakes make new ones. Don’t repeat mine. And here are the mistakes I can already see that now I know 5 years I have also learnt a lot to solve for you, the other ones that I don’t know how to solve- figure it out, but don’t repeat my mistakes, find new ones.”
Thank you Varun for taking time off to have this sharing with us!
We are grateful to have you as an investor of NUS Angel Ventures. If anyone has any more follow up questions, feel free to connect with Varun on LinkedIn and reach out to him!
If you have any other follow up questions, do email your questions to nusangelventures@gmail.com
Watch the full video interview here: https://youtu.be/cw32vIw-HLo
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