Bangkok 5 July 2019 – Many startups picturize their success and key milestone on the day they get funded from a venture capital. This is because getting funded means those startups can scale immediately. Even though turning vision into reality is not an easy task, yet it is possible if the startups are well-prepared by the time those VCs look for potential startups to invest in.
True Digital Park, Thailand’s first digital innovation hub with a vision to be the largest one in Southeast Asia, recently hosted “TDPK Take-Off: Let’s Talk to the VCs” event which comprised of series of activities at its work space. The event offers new members to experience a new working style and environment while having opportunities to meet with global leading investors and Venture Capital (VCs). Those activities included one-on-one consultation sessions between VCs and startups and networking events that allowed startups and young tech entrepreneurs to learn and share with each other. One of the networking events was “The After Funded Stories: What to do next after you get funded” where Pahrada Sapprasert, Director at 500 Startups, a leading VC that has invested with more than 60 startups, shared her experience as a VC and criteria of startups who deserve financial support from VCs.
Pahrada kicked off the conversation with Thai and international startup folks who are members of True Digital Park’s startup ecosystem. She said it doesn’t matter how long have startups been operating. It’s more important that the startups are ready. In other words, the startups that VCs are looking for should already launch their products and had some tractions in the market. Based on her experience, startups that got funded could have just launched their products for three weeks or have entered the market for two years.
Startups are also required to propose a clear and feasible business plan when pitching to VCs. Unfortunately, many of them are ‘thinking too small’. Pahrada elaborated that some startups capture such small market and they will soon reach saturation point, while VCs are looking for startups with ability to scale once they get funded. “We want to invest in startups that have potential to do well in the next five years. They have to convince us that they can capitalize from a sizable market with the opportunity to do business in a long run”, Pahrada said.
For startups, they should also do their homework before pitching. Because not only provide financial and consultancy support, but most of VCs can also bring in business opportunities to the startups. Pahrada suggested startups to consider VCs who invested in relevant industries or have a connection in the startups’ value chain such as VCs who are part of large corporations because they may be able to connect the startups with their sister companies.
Then the time has come. After getting funded, the startups must do their best to execute their acceleration. In addition, they must keep in mind to always listen to real users or customers, take feedbacks into consideration and keep improving. Sometimes those feedbacks may contradict the owners’ belief and the VCs suggestions, but sincere reviews and feedbacks are key steps to the next level, which means more fundraising or revenue growth.
In terms of competition, of course startups are worried about their ideas being stolen or copied. Pahrada suggested that “The only way to protect your business idea is to move faster than your competitors”. She also suggested Thai startups who want to be a unicorn or a multi-billion-dollar firm to equip themselves with English skill as much as learning the know-how from their startup friends and expats. They also need to grow their networks and collaborate with other members in the startup ecosystem.
Before leaving the stage, Pahrada emphasized the key points that startups should consider before receiving fund support from VCs including;
• Fund type e.g. angel fund, equity or participating debentures
• Other non-financial supports e.g. new business leads or advisory
• Conditions e.g. portion of equity, power and authority in management and expected return from investment
Talks and workshops are a part of activities True Digital Park organizes to foster startup network for its members under “One Roof, All Possibilities” concept. The activities are ranging from business empowerment to lifestyle and wellness activities to help startups expand their network and enhance daily working life. For upcoming activities, please go to our events page.