Roundtable on “Venture Capital Financing in Global Economic Slowdown

26th October 2016

By: Andre Theng, Student Reporter

 

Despite the prevailing economic slowdown, venture capital firms are still looking to invest in good, innovative ideas. That was the message of five venture capitalists (VCs) who spoke at a roundtable event entitled Venture Capital Financing in Global Economic Slowdown organised by students of the MT5911 Venture Funding module. Over the course of the semester, the class has been exploring the venture funding process through case studies, project work and guest lectures. The five panellists at the event were all investors with illustrious careers and diverse experiences in their respective areas.

There was good news for students in the module, who learnt that periods of economic downturn do not deter VCs from containing making investments. Dr Alex Lin, Head of Executive Team, Infocomm Investment Pte Ltd, said “From a VC perspective, this is a good hunting period. Many people who cannot find a job will do a start-up.”

Ms Carmen Yuen, Senior Executive Director, Vertex Ventures agreed with Dr Lin, explaining that value propositions become all the more important in periods of downturn, as investors seek to maximise their investments.

The panellists shared on different stages of the funding process, and that the topic can only be answered by asking exactly what kind of funding would be affected by the downturns. Mr Leslie Loh, Management Director, Red Dot Ventures explained that while late-stage funding would be particularly affected due to the large amounts involved, early stage seed funding would continue. Many deals outlast downturns, and as such, VCs would continue to seek ideas regardless of the prevailing economic situation.

They also shared on how the start-up and innovation scene is one that is fast-paced and constantly changing. Start-ups today are changing the world and disrupting incumbents in a big way. Mr Leslie Loh, Management Director, Red Dot Ventures was of the belief that “the start-up movement is going to become mainstream” as more people are encouraged to innovate.

The students gained practical advice from the panellists. Mr Michael Lints, Venture Partner, Golden Gate Ventures gave this advice to students making pitches. He said “Tell a true story. A pitch to a VC is something like a marriage, and the first pitch like a first date.” He encouraged students to be honest in their pitches and to share personally, as VCs would be interested in their stories and their inspirations as entrepreneurs.

In closing the session, Adjunct Associate Professor Tan Kim Seng, the course’s lecturer, advised students to start networking early instead of approaching investors when they needed funding. A/P Tan added that a good time to start was immediately after the session – where students had the opportunity to speak with the panellists present over some refreshments.