So yes there are opportunities to invest in Singapore, but I believe the bigger opportunity is outside of Singapore, i.e., in Bangkok, Jakarta, Manila and HCMC, where the funding scene is weaker at every stage and the market size and growth rates are faster. The downside of these markets – besides the pollution, traffic and lack of transparent business practices – is that the startups are also less mature. But I think this will change, and in general an angel investor or venture capitalist can have a bigger impact both in terms of financing and mentorship. The valuations will also be much more attractive. If you do go this route, having a trusted local partner or advisor is highly recommended.
By asking yourself a series of questions. How can I be successful and happy in my career? How can I be sure my family and close friends are a source of enduring happiness and joy to me rather than a source of unhappiness and heartache? How can I be sure I stay out of jail?
Avoid the temptation of raising more than you need. When you have not a lot of money, I think you’re more disciplined in how you spend your money. You know you can’t just spend hundreds of thousands of dollars on Facebook or Google AdWords, so you actually focus on your users.
I have met enough founders who have had nightmare experiences with their investors to know that dealing with investors isn’t always easy. Even tech superstars like Steven Jobs and Jack Dorsey were once ousted from the companies they founded.
Plus, every minute spent managing investors is one less minute spent building something your user needs.
If you can bootstrap it, bootstrap it.
Read this article in the New York Times a couple of days ago:
The Bloodhound case is a reminder that the founders of start-ups backed by venture capital often end up nothing like Mr. Zuckerberg. Instead, they find themselves thrown out and without significant profits even if their company is sold.
Doesn’t make sense for an angel investor to say this, but my advice to entrepreneurs is to not raise money unless you really have to. There’s honour in bootstrapping and growing organically. Mark Suster wrote a recent piece about his favourite entrepreneur story in a long time – an immigrant from Vietnam who grew his hot sauce business without ever spending a dollar on advertising (and who has never raised his wholesale price in thirty years). Not quite the same as the technology business, but the same principles apply – extreme product passion, uncompromising product quality, guiding principle for the company, customer focus, and providing something distinctive.
Admittedly Google and Facebook didn’t get to where they are today bootstrapping the whole way. Parting words to founders – if you have to raise external money, be very careful who you take money from.