Tam Pham is a venture capitalist with the Marketing and Communications Department at iGlobe Partners. It never really occurred to Tam that she would find her way into this part of the corporate world. Being a Business Marketing graduate herself, she had thought her route would be a conventional path with prospects at firms such as Proctor & Gamble or PricewaterhouseCoopers. She had even experienced a few internships at some prominent Multi-National Corporations like Casio. However, her time in university exposed her to the creative realm of entrepreneurship work: she joined start-up competitions, and even created a social enterprise in her second year. Then, upon graduation, she found herself starting out at a start-up, and she has since never looked back.
Tam: Well, a typical day is pretty hard to define; but as an analyst, I come in in the morning and do some news-reading, then meet the start-ups, attend board meetings, meetings with partners, investors, founders, write and document minutes. I also do research work into various industries, market research, and financial analysis.
And since I’m with the Marketing and Communications side, I also have to manage internal communications: engaging our investors, producing materials for our investors, working with both the investor and investment team, working with the managing partners whenever they need to prepare for any speeches or public appearances.
There’s quite a wide range of work that I oversee, so there’s not really a ‘typical’ day in that sense to speak of. And though it may sound like a lot, after a while, you really get used to it.
Tam: The start-ups that we meet may come through referrals or their own applications/ Generally we’d prefer that they come through points of contact or reference who may be our management team partners, investors, or previous start-ups we’ve worked with so that we know that they are trustworthy enough. We don’t really have any basis of credibility of trust yet if they write to us on their own, so that’s not as preferred. Because when you invest in a company, you also have to have a Board seat – and sitting on the Board of Directors means having very close working relations with the start-up – so you need to know that you can work with the team, that you have people who are credible.
In working with them, you provide guidance, contacts, introduce new markets, work at building up the team, you talk with the founders about structuring the organisation, how to work with their team, plotting the future steps moving forward, even how much salary to allocate or to take – the management partners really walk them through it. The management partners have at least 4 meetings with each company. They may not all be based locally so you could be flying internationally all over the globe to different countries at different times during the year.
So, we don’t just dictate to the start-ups what to do; rather, it’s working with them in a constructive manner and providing a constructive kind of feedback and consistent engagement. We also have to communicate to the investors what the profiles, processes and accounts of the companies they’ve invested in look like or how they are doing and managing. With each engagement, you’re really in it for the long haul: at least 3 years; an average of 5 years – or maybe, even longer, 8 years.
That’s why the selection process is very tedious; we have to go deep into the details of every management team member and founder because you have to know that you can work with them for a long time – at least the next few years. So, when companies come to us, of course, we have a framework of criteria when we look at start-ups because they may be at very different stages of development. Some have very little for us to base our judgment on because they are at very early stages – there’s no revenue, or maybe there’s revenue but no profit yet, or they’ve just graduated from an incubator or accelerator. That’s why we don’t really prefer early-stage companies – unless they are really very disruptive technologies or products. And so we can’t take the same approach in their pitch to us: we really have to look at the founders, their expertise, and whether as a person, based on their track record, they have what it takes: will they have enough perseverance? Do they know what they are saying? Some founders may be too confident and move without testing the market, so they end up producing a product that the market has not fit for.
But the really good founders are those who evaluate the Venture Capitalists themselves too and see which one or ones they really need to tap on for strategic directions: for access to expertise or contacts or networks that a VC can provide based on the VC’s track record. These are partnerships that will really work. And for start-ups, especially in the early stages, the founder’s personality and values really shapes and steers the character and culture of the company. And then for companies at a later stage, you have to look at revenue, direction, their product roadmap, the management team – since they’ve probably grown to more than just the founders. And we’re not looking at just any Small-Medium Enterprise, it’s usually very high-tech start-ups so there are high risks.
Tam: How we advise them really depends on the start-up itself, and our own insights as entrepreneurs and analysts looking at the projections – which year is likely a good year or a bad year, whether the markets are aware of and ready for the products or not, whether we have the confidence to go into this industry now or not. There’s no ‘one-size-fits-all’: some companies might have something good in the works already or have something already ready for launch, but based on projected revenue potential and revenue stream, it may be better for them to wait for a better time or better point of entry into the market for them to make it big. Some may want to go for public listing; but if they go for it now, they may reap lesser benefits than if they were at a better stage. So, we take a lot of factors and considerations into account before we then proceed from one step to the next: whether the team is good enough, whether the team is ready, whether the direction is strategic and makes sense. And not being ready may be because of a lot of different things: is it the team that’s not good enough? Or is it because of a misfit between the market wants and the proposed product? From there, we then look at changing or going ahead with the next action depending on the problem: administrative, operational, management team.
That last problem regarding the management team is more serious and we really want to avoid that. That’s why when we assess the start-ups we really want to get the references through people who know them – personally or professionally – or people who’ve worked with them before, and look at their credentials, track record, and how they come across when we meet with them. Because we don’t want to have a situation where we need to remove the Chief Executive Officer (CEO) because companies, especially in early stages, are very vulnerable to such changes. And these changes can be very dangerous and destabilising to the culture and character of the companies. So, if we detect these red flags when we first meet them, then it’s likely that we will take them on; but if it’s further down the road and somehow people change – this is always a risk – then at worst we have to replace the CEO. And, of course, we can’t predict everything, so with that we have to make the best of what we can do and make a professional judgment.
Tam: The deals have been getting more exciting – yes, even with the local Singapore deals, we’ve met with some very visionary founders over the recent few months. We can see this and it’s encouraging because the managing partners that are with us also have very strong connections to the Silicon Valley networks – and of course as you would expect things there are very different: the quality and competition there for start-ups is generally higher. But it’s about catching up and we’ve started to see more interesting deals here in Singapore or in this region of Southeast Asia.
My own personal view is that we may have too many accelerators and incubators these days. It’s not that we should expect to see an exact replica of Silicon Valley here at Block 71, but if you really look at Silicon Valley or even China – which is growing very fast now – the entrepreneurship scene in these places is very much market-driven, rather than government-driven, as it is here in Singapore. Here, we have a lot more initiatives by and government support from the government to encourage entrepreneurship – which is not a bad thing: yes, this helps. But this only helps in the beginning, in the short term; in the long term, if we continue to, in a sense, ‘spoon-feed’, it may not be as conducive or good an environment for other players who may want to come in into the markets. And we need the see the hunger come from the entrepreneurs themselves. So, I think that if we can let it be a little bit more market-driven, it will be better.
Tam: No, I didn’t know at all! When I was in university, I was just as clueless as any other undergraduate – definitely not part of that few who really knew what they wanted in life, or had early inclinations – for me, I didn’t know. But I started to join start-up competitions; in Year 1, I first went for Start-Up Singapore organised by the National University of Singapore and we won a prize. I found it pretty interesting – though back then I was more involved in social entrepreneurship. So, I created a social enterprise in my second year, which we ran for a while even though it ultimately didn’t pull through. The thing is that I was in Nanyang Technological University and my specialisation was business marketing so the conventional path was to look at Proctor & Gamble or PricewaterhouseCoopers, but I had a few internships with Multi-National Corporations like Casio during my university days and I found that it was a misfit for me in terms of work, work culture, work environment, and values. So, I found myself looking at entrepreneurship work with more creative elements – which is how I found myself starting out at a start-up upon graduation.
However, during my university days, I already had a mentor who was working in a VC firm and he referred me to them. But no VC firm would hire a fresh graduate – especially one with no background in Finance, but one coming from Marketing. So, I went ahead to work for start-ups; I was with one, and then I later moved to join a different one. Barely 3 weeks into working for the second start-up, that VC firm called me up. They were actually aware that I had left that first start-up because that was one of the start-ups they were investing in. Then, now, with more experience, they were more willing to take me up. So, it’s almost by chance, really. And now, being in a VC firm, it’s quite a different experience from being in a start-up having the investor’s point of view and having those concerns as key considerations. And you don’t just see start-ups for their ideas like ‘Oh, this is very creative so it’s good’; but it’s really also about the bigger picture that includes the founders, their personalities, values. So, there are more details to look at than when you’re just in a start-up.
Tam: Formal presentation, quality orientation (attention to detail), communication, adaptability, and continuous learning.
Continuous learning is especially important because of the need for a broad base of knowledge about markets and industries and being up to date on the applications of new technologies or new developments in these fields. And sometimes there are some ad hoc requests that come in and you have to then go and acquire the necessary knowledge. So, you have to keep learning new things, and also as quickly as you can. For me, I’ve had to take up things like coding, computing, programming, organising fundraising, managing and organising database storage and retrieval – because sometimes to assess start-ups, you have to have some expertise as well, if not you will fall for the grand, flowery marketing words in their pitches.