BullseyeStrategy Ebook by Andrew Tan

“First impression matters and no one knows that
better than Andrew.
He is a person who meets so many entrepreneurs

on a daily basis and that trained his senses to
separate fact from fiction.
Do not try to pull a fast one with Andrew; he knows

when you are trying to sell him a lemon.
I have faith that Andrew, through this book, aims

to help future entrepreneurs avoid the pitfalls and
mistakes he made when he first started.
I wish him all the best with this book and hope
that you, the reader is able to use these lessons to
guide you through the challenging but rewarding
journey of entrepreneurship.”
Dato’ Dr Michael Tio, PKT Logistics Group Sdn Bhd

Group Chief Executive and M.D.
“It is really hard for entrepreneurs to build a successful
business, however, it is entirely possible for them to
avoid fatal mistakes. This book can help you foresee
and mitigate most of the common startup pitfalls.
After you read this book, you will feel empowered
and ready for your entrepreneurship journey. Looking
forward to working with some of the readers in
the future. “
Koichi Saito, Founder of KK Fund
“Andrew is the real deal, a no-nonsense kind of person

who is offering you access to ‘insider’ secrets to raising
capital. Pitch To Me gives readers the broader yet
comprehensive perspective on how funding works,
how investors think, and what they need to hear
before they will to put their money where your mouth
is. It will show you how to create the right pitch, get
to the right people, and package your offer the right
way, so you can land your own million-dollar deal”.
Juliana JAN - Chief Investment Officer Cradle

PROFILE
ANDREW TAN
Andrew Tan is a Serial Entrepreneur,

Venture Capitalist and most
passionately an Educationist. He
has embarked on a mission in
spreading his wealth of knowledge
& experience to as many who
wishes to learn from him.
From his adolescent years as a kopitiam boy, Andrew
picked up trade secrets over kopitiam conversations.
From there, determined to escape poverty, he
learned to finance his way through University in
London. Graduated with a Masters in E-Commerce,
Andrew paved his career in the UK in eBay & PayPal.
He returned to Malaysia thereafter, took 2 companies

he built all the way to IPO. In his quest to build great
businesses, Andrew overcame huge adversities including
a bankruptcy. After multiple successful exits as both an
Entrepreneur & a Venture Capitalist, it gives Andrew a
unique perspective and understanding from two sides of
the coin.
Founder & CEO of TinkBig Ventures
Founder & CEO of Wealthstone Academy
Founder of Wealthstone Advisory
Fund Manager of 3b Ventures
Former CEO of Crowdplus Asia, ASEAN’s first equity
crowdfunding platform.
Official Speaker/Trainer at Securities Commission
Mentor - China Accelerator
FOREWORD
This book is written to share my personal experience

as an angel investor, venture capitalist, and serial
entrepreneur over the past 16 years. I have distilled the
last 10 years of everything I learned in the fundraising
game, where I have helped 36 businesses raise millions
of dollars, in addition to raising millions from top VCs
for my own businesses.
If you want to learn how to master fundraising and make

sure that every hour you spend seeking investors and
pitching for a potential investment is having a massive
impact, then keep reading.
If you want to learn how to systematically increase

your confidence, understand the fundraising process,
grow your network of potential investors, get in front of
prospects, and close the investments that your business
needs to grow, then you’re in the right place.
I want to share with you how you can get immediate

insight to everything you will need from A to Z in order
to be successful with your capital raising efforts. This
book will give you a good head start that will teach you
how to fundraise, and learn the top financing strategies
so you can get the capital that your business needs.
As the person running your business, YOU – not someone
else – need to be intimately aware of mission-critical
functions such as cashflow and income statements.
By building these models and projections, you will

be able to validate all your business assumptions and
understand your key strategic drivers. Furthermore, having
your company’s projections for the next 24 to 60 months
can help you avoid catastrophic financial errors that could
put you out of business.
Let’s get started.

Table Content
1 ENTREPRENEUR:
TO BE OR NOT TO BE
Is entrepreneurship for me?
That important first step
Are you ready for this roller coaster ride?
Know your strengths and weaknesses
I HAVE
A DREAM 2
3 THE
TRAILBLAZING TEAM
Who are your “early adopters”?
Bang on target
The lonely journey
4 GETTING DOLLARS
FOR YOUR DESIGNS
How do I secure funding for my next “brilliant” idea?
Are your thoughts enough?
Perception vs Reality
5
What Investors will always ask
The importance of the Pitch Deck
LIFE
IS A PITCH
All you need to know about the Pitch Deck
Back to Basics
Types of pitch decks
Why would I want to have a deck before a meeting?
How to hit the Deck
Questions you need to consider
First Thoughts, Second Thoughts
Reviewing my approach
6
Tell your story, from problem to solution
PAYING
DUE ATTENTION
The Due Diligence Process as an Entrepreneur
My personal experiences as an Entrepreneur
The Most Important Lessons that I Learned
7 LOOKING
FOR LOOT
8
Ways to find your Investors
VIVA
LAS VC
How Venture Capital works
The Process of Getting Funded by a VC
How VCs monetise
VC involvement in your company
Understanding the value that a VC Brings
Cutting through the VC noise
VC and PE: Same or Different?
9 INVESTMENT
INTERGRATION
How to structure a financing deal with Investors
Dealing with Debt
Sexy Convertibles
Feeling SAFE
Entrepreneurial (Ad)Venture
Equity Equations
10 COMING
TO TERMS
What is a Term Sheet, and What to Include in it
The Ace up your Sleeve
11
Clause and Effect
KNOWLEDGE
THAT’S FINE AND FRESH
Nailing the Investor Updates
The 2nd Most Underestimated Email You’ll ever Send
12 3R TALENT
MANAGEMENT AND ESOP
How dilution works with investment and ESOP
MIND THE
(FUNDING) GAP 13
Hot 5 Things to do when Fundraising
14 KNOW WHEN TO
HOLD AND WHEN TO FOLD
How to Cash Out as an Entrepreneur
How Much Money Do You Need to Launch a Startup?
What to do when Cashing Out
INVESTOR
BULLSEYE 15
The Importance of Prospecting Targeted Investors
Types of Investors to Add to Your List
Finding the Right Investors for Your List
Building your List
CHAPTER 01
Entrepreneur -
To Be or
Not to Be
Chapter 1: Entrepreneur - To Be or Not To Be
IS ENTREPRENEURSHIP
FOR ME??
The age of entrepreneurship is upon us. We are now

seeing the highest rate of new business creation in over
a decade – and many of these fledgling companies are
being started by first time entrepreneurs. As technology
advances and creates an abundance of new and exciting
opportunities, more and more people are mustering
up the courage to abandon a career that feels painfully
conventional in order to embrace one that is deeply
meaningful.
However, it takes more than hunger and desire to achieve

success – and with great effort also comes with great
challenge.
Based on available data, more than half of small

businesses fail within the first five years – a number that
will only continue to rise. For those business that do
survive, many will struggle to ever achieve significant
growth. So why do entrepreneurs have such a difficult
time getting their ventures off the ground? A shortage of
capital? A lack of connections?
No.
The greatest hurdle standing in the way of the first-time

small business owner is a general lack of knowledge and
14
know-how: tangible information and experience about

how to create, maintain, and grow a company.
True, starting your own business can sometimes be

remarkably liberating and fulfilling, no question. It’s also
true that hard work and dedication can turn an eager
hope into a successful entrepreneur. However, a word of
caution: just because you CAN start a business doesn’t
mean you SHOULD start a business or that you WILL
certainly enjoy it.
Is entrepreneurship the right choice for you? Do your

ideas have the potential to become a business? In the
first part of this book, you will be asked to assess your
business idea and to evaluate your entrepreneurial skills.
The goal is to help you identify from the start if you have
what it takes to run a profitable company.
Next, you will learn how to turn concepts into a

business, including everything from basic accounting to
incorporation. You’ll be guided through the launching
process, and gain crucial knowledge on how to effectively
market, sell, and promote your product or service. Finally,
you’ll discover how to grow your business and achieve
long-term success, thus building a valuable company to
the point where you can exit the business with a huge
sum of money.
Launching a business is an adventure that begins with

that first step. Perhaps reading this book is that first step;
15
perhaps you’ve already started your business and are

just looking for new ideas and fresh insights.
Entrepreneurs live for the struggle of launching their
businesses – and the truth is, it is just not enough to
build a business worth a fortune. You have to make sure
you have an exit strategy and a way to get the money
back out. Always begin with exit in mind – because
decisions made on day one can have huge implications
down the road.
Today, the entrepreneur has become the very

embodiment of the modern dream – where life gets
better, richer, and fuller for everyone, according to
their own ability or achievement – but only if they get
the opportunity. Through hard work and perseverance,
it is she or he who dares not only to dream but to risk
everything for the chance to succeed will triumph.
THAT IMPORTANT FIRST STEP
Before you can begin building the next great company,

you must first consider these five important questions:
16
1 What kind of business

do I want to start?
Are you looking to open a small boutique firm, or your
goal is to create fast-and-furious growth? Do you want to
start a service-based business, or is your idea centered
primarily on a product? While one type of business isn’t
necessarily better than another, it’s crucial to research
your industry and market thoroughly before launching a
business.
Why am I starting
this company?
Perhaps even more significant that the “what” is the
2
“why”. Do you want to start a business to avoid working
for someone else? Do you have a great idea that you feel
would perform well in the market? Are you out of work
and looking to gain financial independence? The “why”
behind your business will play a major role in many of the
decisions you make as an entrepreneur.
3 Am I willing to invest the time and

energy it will take to succeed?
Owning a small business — especially at the beginning
— is a 24/7 job. From strategy and development to
balancing the books and sweeping the floors, it’s likely
you’ll be a one-man band, at least in the beginning. Don’t
17
fool yourself into thinking that you’ll start a business

next week and sell the company for millions of dollars
next year. For most entrepreneurs, the road is long and
challenging – in fact, a useful rule of thumb is to estimate
how much time and energy you think you’ll need to invest
in your new venture, then double that number.
What skills or training must I acquire

before opening my business?
Do you know what are your strengths and weaknesses?
4
Take a moment to list down what kind of training or skills
you may need to make your company work, and find out
whether they are available to learn and acquire.
5 What happens if my business fails?

Optimism is important, especially for the first-time
entrepreneur — but so is pragmatism. Since half of all
new companies fail within the first five years, you owe
it to yourself to consider what might happen if your
business faces a similar fate. Will you be financially
wiped out, or do you have another source of income?
Will you be able to get your old day job back, or will you
face long-term unemployment? While you shouldn’t let
fear of unknown deter you from starting a business, you
must also not let ignorance lead you down a dangerous
path. It’s just as important to anticipate failure as it is to
prepare for success.
18
Still interested? Yes? Then let’s move on.
ARE YOU READY FOR THIS

ROLLER COASTER RIDE?
While these types of questions are not easy to ask, their

answers will provide tremendous value as you begin
to shape your business idea. Launching a business
– especially for the first time – is a major undertaking,
and preparation is absolutely critical to ensuring at least
some measure of success.
Until the last twenty years or so, entrepreneurs were

seen less as innovators and more as risktakers or thrill
seekers. In many circles, it was considered foolish – and
even sometimes reckless – to launch a new company;
after all, why would you go through the trouble of
starting your own organization when there are so many
stable corporations to work for? However, it has been
proven that as technology invigorates the small business
landscape, big businesses stumble over their own red
tape; thus, the playing field slowly begins to level.
Still, much misinformation exists about what it takes to

be an entrepreneur. Some believe that you must have
access to a large amount of capital, while others insist that
bootstrapping is the only way to ever succeed. Some say
you must possess the right education and background,
19
others say you need to be extremely sensitive to

economic timing and geographic locations.
So what exactly are these myths? Much of the confusion

is fueled by a paralyzing fear of failure. There’s comfort
in believing that there’s only one formula for success,
because it lets you off the hook: it gives you permission
to stay at that job you may not like, and justification to
abandon that “silly idea” you’ve been dreaming about
for years.
Sorry – but the only way to guarantee that you will

never fail is to never try. Are you destined to become an
entrepreneur, or should you consider exploring other
opportunities? While a clearly defined mindset does
exist, there are plenty of talented entrepreneurs who have
broken the mould. With enough drive, determination,
and homework, almost anyone can start a company –
that means you too.
“ Know Your Strengths

&
”
Weaknesses
Identifying this information will help you make essential

decision about whom to work with, how to structure your
position, and even what kind of business to build. While
20
some people excel at this type of exercise, others may

find it exceedingly difficult.
This process is valuable because it determines

where you should direct your efforts. Professional
achievement relies less on your aptitude for developing
new skills than on your ability to fine tune the ones you
already have. Making this type of assessment can feel
overwhelminging, so to help focus the process, try to
think of it in the context of starting a new business.
Which parts excite you? Which parts do you dread
the most?
Below you’ll find a breakdown of the Five Essential

Phases every entrepreneur goes through prior to starting
a new business:
Brainstorming
A great business starts with a great concept. Are you

bursting at the seams with new ideas, or do you struggle
with generating them? Do you prefer brainstorming with
a team, or do you work better alone? At which part of the
ideation process do you excel, and where do you stall?
For some people, coming up with the idea is the easiest
part. Others approach this process with anxiety and fear.
What strengths and weaknesses does the process bring
out in you?
21
Strategizing
Having an idea is great, but having a plan is crucial.

How strategic are you? Would you say you’re more
of a dreamer or a planner? Are you consistently a few
steps ahead, or do you prefer staying grounded and in
the moment? Being an entrepreneur requires a certain
amount of strategic thinking, and some people are
naturally better at that than others. Where do you fall
on the spectrum?
Organizing
Organization is important to all businesses, but –

surprisingly – not to all entrepreneurs. Would you
call yourself detail oriented? Are you great with
deadlines? Are you motivated by order, process, and
procedure? It’s all right if organization isn’t your strong
suit – but it’s best to come to grips with it now, so that
you can prepare accordingly and bring on the right
support team.
Communicating
You can have the greatest business in the world – but if

you can’t communicate your product or services, you’ll
never succeed. Are you a natural-born salesperson? Do
you love to connect with customers and employees? Do
22
you do your best work when speaking, writing, or

expressing yourself? Getting your message across is vital
to the overall well-being of your business. How strong of
a communicator are you?
Executing
A plan is essential to success – but only if it’s properly

executed. Do you get excited during the creative process
but lose focus when it’s time to execute? Would you
rather dream up a project rather than actually launch it?
Do you value process over performance? Eventually, your
business will reach a point where its very likelihood will
rely upon the precision of your execution. Do you have
the right combination of skills to make it work?
While going through these phases, use the categories

given to help identify your primary strengths and
weaknesses. The sooner you can name them, the more
productive you’ll be.
Of course, you will have more strengths and weaknesses

than just what may fall under these five categories – but
hopefully, after going through this process, you would
have begun to uncover some common themes. Take a
23
few moments to make your own comprehensive list.

It’s important to be honest here: If you’re not great at
execution but wish you were, you should still count it as a
weakness. You can work on improving your skill sets later
– for now, the goal is simply to assess your current state.
Once you have developed a list of your strengths and

weaknesses, begin taking note of where you should
spend your time, and of what responsibilities you
should outsource. If strategy or organisation is not
your strong suit, you may want to think about bringing
on an associate or administrator. If you’re not great
at execution or ideation, perhaps you should find a
business partner who is. Identifying your strengths
and weaknesses is a simple exercise that can have
a dramatic impact on your business.
“Most people believe you need to be a well-

rounded person and work on your weaknesses.
That’s just not true. To compete on a world-class
level, you need to accentuate your strengths. Focus
on the things you’re good at, and hire someone to
do the rest.”
Now that you have a good idea about starting a business

and some of the myths involved, here is the unvarnished
truth: starting a business is simultaneously one of the
most rewarding yet difficult things you could ever do.
24
There will be moments – plenty of them in fact – of

uncertainty and fear. After months of working seven
days a week or years without a regular paycheque, you’ll
begin to seriously question why you were ever crazy
enough to start a company in the first place. But when
that moment occurs – and eventually it will – you can’t let
it get in your way. Instead, you must use that anxiety as a
catapult to push yourself to the next level.
When you decide to become an entrepreneur, you enter

into an exclusive club with members like Jeff Bezos, Jack
Ma, Steve Jobs, Elon Musk, and Mark Zuckerberg. You
may never receive a tote bag or newsletter – but make no
mistake, you will earn that membership each and every
day. If that club were to have an axiom, it would be this:
Where you came from, no

That no matter what matter what you’ve chosen
to build, or how you’ve
chosen to build it – you
can expect to encounter
nothing less than perpetual
challenge; and
If you put in the time and

That if you persist energy – then eventually,
you will triumph.
Isn’t that why you decided to become an entrepreneur in

the first place?
25
CHAPTER 02
I Have
A Dream
Chapter 2: I Have A Dream
No matter how big the idea or dream is, they should all
share one single underlying goal: the desire to solve a
problem. Whether you’re inventing something new or
simply developing a new approach, a great business
starts with a great solution.
Here are ten questions designed to help effectively
1
evaluate your idea:
What problem are you trying to

solve, and how will you solve it?
Don’t think too hard here: Simply identify the problem,
and briefly explain the solution that your business
2
will offer.
Is someone else already
solving this problem?
Most likely, there will be other people trying to solve
the same problem that you are. That’s not necessarily
a bad thing. Watch closely, and study each part of their
business. You might discover that by making only a small
3
tweak, you can capture a large piece of the market.
How is your solution better than or

different from your competitors?
Assuming you will in fact have some competition, you
must next identify how you’ll differentiate your product
or service from others. What are you bringing to the
table that’s different and/or better than what’s already
out there?
27
4 Is there a want or need

for your product or service?
Maybe you’ve come up with a brilliant new way to teach
people how to run digital marketing with zero marketing
cost to that small/medium-sized enterprise (SME), but do
enough people want and need that? Probably not. Before
you go through the trouble of starting a company, you
must first uncover whether there’s a genuine desire for
it in the marketplace. There are really only two question
to ask when evaluating your business idea: Is there a
real need for the product; and are there enough people
willing to pay for it? And if it’s been done a million times
before, you also have to ask whether you really have a
point of difference that makes it so much better. You
should never be afraid to fully examine your idea – even
5
if it means you might have to give it up.
How big is the

potential market?
Although there must be a market for your business, it
doesn’t have to be huge to achieve results. Plenty of
companies do well by targeting very small niche consumer
segments. To discover the size of your market, first gather
data on how many people are already using your product
or service – you can easily find this type of information
online. Try to estimate how much of the market you can
capture based on your size and marketing abilities. This
last step is the toughest because it’s the most subjective.
28
You may find it helpful to look at annual sales of your

competitors: how much of the market share do they
already own?
6 How much will it cost

to start the business?
This may be a tough question to answer at this point in the
process, but it’s still good to consider. If you’re planning to
open a retail store, for example, you’ll need significantly
more capital than you would to start a consulting business.
Think hard about the cost associated with launching your
business, and start tallying up the numbers.
How soon can you

start the business?
Does your business require permits and licenses that
7
take months to secure? Do you need to raise substantial
capital before you even begin? Developing a solid
timeframe will provide the perspective you need to make
bigger decisions later.
8 What personal and professional adjustments

must you make to start this business?
Most likely, you’ll start building your business on nights
and weekends while you work towards proof of concepts.
Even that requires certain personal and professional
29
adjustments. Think about any changes you may need to

make to be more successful.
What is (are) your ultimate

goal(s) in starting this business? 9
Do you want to make millions of dollars or build a small
modest family business? Are you looking to sell your
company quickly, or do you want to create a business that
can last a lifetime? The best way to fast-track success is to
declare it from the start.
10 What will happen if you

don’t start this business?
What if you walk away right now and don’t pursue this
idea? What will happen – or not happen – in your life
and the lives of others if you decide to give up the idea
of walking into an entrepreneur’s shoes and go back to
what you were doing before? This powerful question can
sometimes be the defining factor for an entrepreneur.
If answered thoroughly, these questions should provide

the clarity you’ll need to advance to the next stage of
building your business.
30
But is starting a business really all about solving a

problem? What about passion? Shouldn’t it play a role
in what kind of company you choose to start? That’s a
complicated question. Being passionate about your work
is important, and you certainly must love your product
or service. That said, there’s a major difference between
being passionate about your business and starting a
business based on a passion.
Passion shifts over time – and building a company around

something so fleeting can be unwise. What more is that
passion don’t always translate into businesses — either
operationally or financially. Loving art and owning an
art gallery, for instance, are two very different things.
Likewise, taking pleasure in regularly cooking for friends
and family doesn’t mean you’ll experience that same joy
if you own a restaurant. Passion is only a single ingredient;
it’s not a recipe.
When it comes to following a passion, the key is to follow

your effort, not your passion. Time is the most valuable
asset you don’t own, and how you use – or don’t use –
your time is going to be the best indication of where your
future is going to take you.
31
CHAPTER 03
The
Trailblazing
Team
Chapter 3: The Trailblazing Team
WHO ARE YOUR

‘‘EARLY ADOPTERS’’?
Selling a product that no one wants to pay for it is the

granddaddy of business killers. The key now is getting
your first customer. According to a consistent pattern
adopted by society, new ideas or technology are first
embraced by a relatively small group of people whom we
call Innovators – they are those who are relatively open
to trying new things.
These innovators are then instrumental in spreading the

word to the next group called Early Adopters, who need
more convincing but are quite receptive; they then help
spread the word to a group of early majority buyers, who
like to wait to hear about innovation from the earlier
adopters. Once these groups have come on board, the
last two groups – the Late Majority and the Laggards –
finally embrace the innovation.
Though the innovators and early adopters are described

as relatively receptive in practice, they can be hard to
identify – and getting them to purchase can require a
good deal of persuasion about the merits of the product
or service. Just finding a first set of customers can take
months. Also, sometimes the customers you’ve identified
simply turn out not to be interested in actually buying
your product at the quantity predicted – even if you have
tested the market. So, the fundamental questions still
33
remain: Who exactly are you selling to? Who makes up

your target market?
A target market is the specific group of customers that

your business aims to attract. Understanding yours will
serve you throughout the business building process.
Many new business owners are hungry for customers,
and will seek out just about anyone willing to buy their
product or services. However, while this strategy may
sound intuitive, trying to appeal to an unfocused group
of people can be ineffective.
Instead, targeting your product or services to a niche

audience will help build a more relevant, compelling, and
sustainable business. It’s just like opening a restaurant for
people who eat food: maybe it sounds appealing, but it’s
difficult to compete if you’re competing with everyone.
Instead of aiming for anyone who eats food, it would be far
more effective to focus on health-conscious foodies aged
between 25-45 who make more than RM100,000 a year
and who live in major city areas. Yes, you’ve eliminated a
large portion of the market – but now, you can position
your product in a way that deeply resonates with your
ideal customers instead of only being SLIGHTLY relevant
to everyone.
34
BANG ON TARGET
How do you define your target market? There are five

things to examine:
Demographic Information
Identifying the age, gender, ethnicity, income level, and

family status of your customer is the first step to defining
your market. A product that appeals to a 21-year-
old Asian Male that is making RM24,000 a year and
living with his parents will likely be quite different than
one that appeal to a 40-year-old married Caucasian
guy with two children making RM200,000 a year. What
demographic is the best fit for your business? This
question is the starting point to better understanding
your target market.
Geographic Location
If you target a customer living in a rural area, he will

probably have different needs compared to an urban
dwelling guy. Likewise, a person who resides in the
suburbs rather than, say, a bustling city environment may
buy products through different channels. The only way to
sell to your customers is to know where to look for them.
35
Wants and needs
What are your customer’s wants and needs? (Those,

by the way, are two different things.) Is he looking to
upgrade his lifestyle? Is he trying to save for his marriage?
Understanding what exactly your consumers are looking
for will help you better identify their buying habits and
position your business accordingly.
Hobbies and activities
Where do your customers hang out? What do they do

for fun? Would they rather go for sports on weekends, or
spend the day in hotels for high tea and networking? Are
they involved in their communities or associations, or do
they prefer to keep to themselves?
Market Size
Roughly how large is the target market you’re going

after? How big is the total addressable market? What
is the serviceable market size based on your current
resources and capacity? What is your current obtainable
market size that you will be able to obtain over the next
12 months? Do a little digging and try to acquire some
basic information on the size of your market.
36
Finding your audience can be challenging and sometimes

there’s no better way than hitting the street and begin
talking to everyone. Defining a market can make many
first-time entrepreneurs uncomfortable. But remember:
just because you’re targeting one type of customer,
doesn’t mean you can’t or won’t appeal to others. You’re
simply focusing your efforts to have the maximum impact
in the marketplace.
What’s more, your target market will likely change and

grow with your business. Think of it as a formula: Until
you get it just right, you’ll want to regularly tinker with the
variables. Once you start acquiring this type of data, you
may find it necessary to go back and refine your offerings.
That’s a good thing. Don’t be afraid to use faces you
uncover to build a more targeted and effective business.
That’s what this kind of research is for.
If you’re not capturing the market you’ve aimed for, you

might find an entirely different one out there if you keep
trying out possibilities.
Some products that abjectly fail in their intended market

can sometimes be adopted with wild enthusiasm by
another. The inventors of bubble wrap intended the
technology to be used for wallpaper – and then it turned
out that people didn’t want the kind of bubbly wallpaper
they had in mind. But they persisted with other ideas,
37
and found a huge market when they approached IBM

to use bubbly packaging for shipping a new computer.
When marketed as “a way to assure safe transport of
fragile goods”, the bubble wrap business boomed.
THE LONELY JOURNEY
The process of finding an optimal market can sometimes

take many years. It’s important to emphasize that a
product may find a certain amount of success before
hitting the market sweet spot. Listerine was created as a
surgical antiseptic and was marketed for all sort of uses
until finally it was pitched as a cure for bad breath – and
its sales skyrocketed. Listerine chugged along for over
forty years before finding its niche. As an entrepreneur,
you want to discover that sweet spot, not settle for only
serviceable sales.
So, you should absolutely identify and plan around a

particular market while you’re initially developing your
product and model. You should do some testing of that
market, and you have to be aware of the limits of advanced
research and keep an open mind about making changes,
exploring other possibilities that may be off your charted
course, and hanging very tough through lean times.
Sometimes, it’s not the product, it’s the positioning. In
38
some cases, connecting with your market won’t involve

changing your product much. Another great case study
of this is the story of Febreze. Researchers in P&G
discovered a formula for an odourless liquid that, when
sprayed on fabric, could completely eliminate any odours
lingering in them like cigarettes smoke – not just covering
them up with a perfumed scent. P&G marketed the
product as laundry fresheners and expected it to take off.
Unfortunately, when they launched it in the test market,

sales were lacklustre in comparison to their plan. P&G
didn’t give up on it though; some customers absolutely
love the spray, and P&G talked to them about it,
looking for any possible clues they could offer about
how to convince others to buy the products. In one of
those interviews, a woman said, “It’s nice, you know?
Spraying feels like a little mini celebration when I’m
done with a room.”
That comment helped P&G see that it had to market

Febreze differently. It had been pitched as a spray
for clothes. But spraying clothes that way wasn’t an
established cleaning routine, and people didn’t want to
pick it up. However, spraying a room with a nice scented
fragrance was a more regular routine in households.
So, the company added an appealing scent to the product

and came out with a new set of commercials showing
people spraying Febreze on bedspreads and piles of just
cleaned clothes, positioning it as a refreshing finishing
39
touch, adding to their regular cleaning routine. When

positioned this way, the product immediately took off.
The bottom line is this: The best way to discover a market

is by selling to it, not by only researching it. Of course,
you should research a market before selling to it – but
research alone won’t tell you enough. The best way to
learn whether or not a market will adopt your product
is to sell to it and learn from both the good and bad
experiences of that process.
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CHAPTER 04
Getting
Dollars for
Your Designs
Chapter 4: Getting Dollars for Your Designs
HOW DO I SECURE FUNDING

FOR MY NEXT “BRILLIANT’’ IDEA
It’s crazy how many times I’ve been asked “if shareholders
will support my idea” – so I wrote this book to save a lot
of futile energy for a lot of people.
I get it, it’s hard to start a business. It costs a lot of money,

and you probably don’t even have the resources. That’s
just life. You’re full of beans and enthusiasm, you want
magic to happen. You need help, so you just need
someone to fund you to get your idea off the ground.
Imagine you are an investor, an early stage investor,

what would you want to invest in? What would the
characteristics be? Seriously, if you really are looking for
an answer to this question, pause and answer it in your
head. Something that was proven and a sure thing… or
hopes, dreams and rainbows? The sure thing, right?
The best case is a company that is profitable with a

certain growth rate, revenue generating, users, mad
press coverage, a super product, and an idea, right?
Thinking like an investor, you help create a lot of clarity
with questions like this. You don’t know, that’s fine – but
when you think like an investor, it becomes more obvious.
42
ARE YOUR THOUGHTS ENOUGH?
Famous people get funded.
People who made money for their investors before get

funded.
Why? They made their investors cash before and they

want to make it rain again! With your investor hat back
on, if you invest in a founder that paid for your new cruise,
would you be more or less likely to give that founder
another round of cash again?
Ideas just aren’t worth much. It’s really hard to come up

with a really solid idea with a compelling business model
and market size that you are well positioned to execute
on (Founder/market fit).
Let me tell you, great ideas are hard to come by. With the
millions of founders globally, in aggregate there are a lot
of good ideas – and frankly, you may be feeling smug with
yourself with your idea, but it’s pretty likely that someone
else has had it and/or is already working on it.
So, ideas are worthless. They are worthless because

whatever circumstances existed for you to have your idea
in a pool of 7 billion people also exist for someone else.
Which means that ideas aren’t unique?
43
Ideas aren’t enough to get funded. The whole point of

this book is getting funded with an idea, so yes, your
idea has value, but that doesn’t make your company
fundable. Investors are not investing in an idea, they
are investing in a combination of things which together
create an investment opportunity.
There are also so many crazy ideas out there which are
often a prerequisite for getting the 100x outcome, that if
an idea is bonkers but the team are awesome and have
some traction to show the idea actually works, they will
invest! Um, Snapchat, Twitter, etc are a few examples.
Perception
VS
Reality
“Having value” and “being fundable” are two completely

different things. While a good idea is usually a necessary
ingredient for the formation of a good company, it is not
sufficient by itself for any serious investor to fund.
Why? Because there are also other good ideas out there,
some of which have already been developed, tested
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and put into practice, thus decreasing the amount

of risk an investor will be taking. The bottom line is
that ideas by themselves are simply not fundable by
professional investors.
Ideas are easy, and investors know that. You need to

prove you can build the product by, well, building the
product. Bootstrap something together first and then
you’ll have something to present.
Execution matters. Edison’s ratio is true with start-up:

it’s 1% inspiration, 99% perspiration. Just look at Ring
(formerly known as DoorBot). I have so many investor
friends that can’t get their head around the acquisition
by Amazon. I did some digging, and honestly, I think it
comes down to the execution. The product isn’t that
good, but how these guys executed is more than what
others wouldn’t attempt. Execution is the core skill of
a founder, not the inspiration of ideas. Ideas are worth
nothing unless executed. They are just a multiplier.
Execution worth millions.
WHAT INVESTORS
WILL ALWAYS ASK
Before you walk into an investor meeting or onstage to

present your start-up, you need to know the answers to
45
the questions listed below. Don’t expect to skate through

only on the strength of your slide and a well-practiced
speech. Investors want to know all the things you left out,
and how you came up with the assumptions you made. Be
prepared to impress by making sure you have an answer
to all of these questions.
Make sure you are writing down any questions

from investors so that you can nail your answers on
future meetings.
Here is the list of questions broken down by the different

key areas that will help an investor understands if your
company is fundable and if it is a good fit with their
portfolio of investments.
MARKET
How big is the market opportunity?
What percentage of the market share do you
hope to get?
Who exactly is your best customer?
How long will this take?
How do you come up with these figures?
What is your PR strategy?
Who do you most aspired to be like?
Who do you least want to be like?
Why is this the right time for this product or service?
What is your marketing strategy?
46
TRACTION
How much feedback have you received so far?
What changes have you made based on that feedback?
How many actual users do you have?
How long do users stay on average?
How many actual sales have you made?
What is the annual growth rate?
Total rate of growth?
Has growth been linear and consistent?
What has held back your growth?
Can you provide a demonstration of the product
or service now?
TEAM
Where are your headquarters?
Who are the founders?
Who are key execution team members?
Any existing board members?
What key roles may need to be hired for?
What experience do you have in this industry?
Why are you the right person to bet on to achieve this?
What motivates you?
Are any of the founders willing to be bought out now?
Are there any other people who may claim they
are owed or responsible for your ideas?
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COMPETITION
Who are your competitors?
What are your strengths and advantages over your
competitors?
What are your weaknesses or disadvantages?
What barriers to entry or scale are there for you?
Where is the competition letting down customers?
Why haven’t your competitors done this yet?
How do your features differ?
How do you compare on price?
How do you compare on service?
How do you compare on customer satisfaction?
FINANCIALS
How are you marketing your product or services?

How much is your marketing budget?
What are your per customer acquisition costs?
How much is your customer lifetime value?
How much equity and debt has been raised in the past?
Who participated in earlier rounds of fundraising?
What is your burn rate?
How long will it take to become profitable?
What are the key metrics your team is focused on?
What stock options have been given already? What
is the distribution of equity between founders?
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INTELLECTUAL PROPERTY
What is so unique about the company?
What big problem does it solve?
What legal risks do you see?
Are you aware of any product liability risks?
What regulatory risks could impact this business?
What intellectual property do you own?
Who developed any intellectual property owned?
Have any employees or partners who have left who may
challenge these rights?
Are there any additional patents pending or planned?
How are any current intellectual assets owned?
USE OF FUNDS
How will these funds be allocated?
How much will be spent on founders’ salaries?
How much will be spent on overhead versus expansion?
What if you don’t get all the money you are asking for?
What assets will be invested in with this capital?
What are your milestones?
What are the biggest risks to my investment?
Why are you choosing this method of raising capital?
How much of this money will be used for future
fundraising efforts?
How much are your personal expenses each month?
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BUSINESS MODEL
Which specific marketing channels are you using?
Why are you using these marketing channels?
What is your plan B if these sales channels are interrupted?
What profit margins are you operating on?
How will scaling impact profit margins?
What pivots have you already made up until now?
Can you tell me a story about how a customer has
decided to choose you and their experience with your
product?
Who in this organization is most replaceable?
What unique features are you working on?
What other streams of revenue can be added to this?
CORPORATE STRUCTURE
How is the company currently organized?
Who holds which titles?
How are shares split?
Is there an existing board or advisors?
Where is the company registered?
Who handles accounting?
What unique skills and talents does each owner
contribute?
Name someone you chose not to include as a founder
and why?
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Who filed the company?

Who is the registered agent on record?
EXISTING FINANCING ROUND

What is your exit goal? (i.e. IPO, M&A)
What is your expected time frame for this?
Who do you imagine will help you exit?
When do you expect you will be conducting a follow
up round of fundraising?
How much is your pre-money valuation?
How are you determining current valuation?
How much are you trying to raise now?
How many previous investors will participate in
this round?
What is the next milestone this money will take
you to?
How else do you hope an investor will help
beyond money?
THE IMPORTANCE
OF THE PITCH DECK
Why I wanted a pitch deck before a pitch in a fundraising

process? Many founders view the panacea to securing
funding from venture capital investors in the fundraising
51
process as getting the first meeting: once they are in,

they will win! The reality in most scenarios is different,
as what you do when you are in the room, and how
you happened to get there (pitch deck) have already
contributed to your odds.
Let me quickly touch on two fallacies here to illustrate

the preceding paragraph.
FALLACY #1:
I JUST NEED TO GET IN THE ROOM
TO START THE FUNDRAISING PROCESS
What do you think is going to happen when you are
in the hallowed ‘room’ and the VC is already not
interested? Not much other than a more developed
relationship, which is of course not bad, but there is
only so much time for that.
Let me give you one example. I have had founders reply

“I get that you don’t believe in our business model and
the timing at this stage of the market is bad, but I am
much better at selling in person, can we have a meeting
anyway!”
In many sectors, I have already developed a thesis of

what and when I want to invest in something, so selling
to me isn’t going to change anything. You are spending
52
your time with the wrong investor and you could spend
that time gaining more traction, which would change
your outcome with me in fact!
FALLACY #2:
ONCE I GET IN THE ROOM
IT DOESN’T MATTER HOW I GET THERE.
How I came to know about your business does have
an impact. If you got one or ideally more than one
referral to me from someone I trust and has made useful
introductions before (Many people send bad deal flow),
then I will take everything more seriously.
If I already know something about your business and have

had the chance to talk to a sector expert or research your
business beforehand, then the meeting will be far more
productive (read potentially more successful).
This leads to the point of this chapter as to why I

want a pitch deck before a meeting in the fundraising
process. I have been debating and analysing the “end-
to-end” process of investing in companies, to not only
make better decisions and offer a better experience to
53
founders (e.g. How to respond faster), but to be more

efficient and effective in the use of time.
I must emphasise that the views here are entirely my

own and do not represent that of my partners. In
addition, this is the current state of my thinking, which
as ever is open to be stand corrected. To founders, who
I deeply respect, don’t find a reason to take offence.
You need to have a thick skin and understand raising
money is a game to be played to the rules of those
who are setting them, and knowledge is power.
54
CHAPTER 05
LIFE
IS A PITCH
Chapter 5: Life is a Pitch
ALL YOU NEED TO KNOW

ABOUT THE PITCH DECK
The whole of life is a pitch. Everything you do is a matter
of presentation and persuasion. In this chapter, it is about
how do you design and deliver your pitch to get the result
you want. How you pitch in business and how you can do
it far better.
The pitch is the hinge on which the door opens. Everything

else in life is about process. The pitch is about decision,
the decision to give you the job, the decision to give you
the funds to start your own business. If you get the pitch
right, everything follows and if you don’t, nothing follows.
The pitch moments, those crucial moments which give

the opportunity for big change, all have one thing in
common. You are trying to get someone else to do what
you want them to do which is to invest a million dollar into
your business. Someone being asked to invest a million
dollars is faced really with only one simple question to
answer: Will I get my money back? Of course, that doesn’t
seem to be a logical question, because it’s asking to
speak of the future. Yet while you can’t know what going
to happen, you can think you know.
Indeed, a banker who spends his whole life lending money

is endlessly deciding what will happen in the future. But,
of course, he is not deciding, he is just guessing. He will
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never call it a guess – that’s too scarily truthful. He’ll call

it an “informed estimate”, an “intelligent assumption”,
a “considered opinion”. But believe me, it’s a guess.
No one can foretell the future. A banker doesn’t know
whether he’ll get his money back; a date doesn’t know
whether what lies ahead is three hours of tedium or
thirty years of partnership. So when you’re pitching to
someone, you’re asking them to judge the future.
Since knowing the future is beyond logic, their

judgement won’t be based on logical factors but on
emotional factors, trust, confidence, hope, ambition,
desire. These factors aren’t rational, they are instinctive.
They are not of the head, they are of the heart.
Of course, logical arguments and rational thoughts have

an important part to play in a successful pitch, because
they can underpin emotional instincts with reassurance.
But logic in a pitch is never an end in itself, it’s only a
means to as end. So to pitch successfully, you’ll have
to understand that it’s not about widening someone
knowledge base, it’s about giving them a jolting power
surge to their emotional electricity. A pitch does not
take place in the library of the mind, its takes places in
the theatre of the heart.
Back to basics, let’s dig into decks first, as once we

agree on what they are, dos and don’ts, we can better
form a view as to whether they should be a prerequisite
for a meeting.
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What is a pitch deck?

A pitch deck is a short (10-20 slides) PowerPoint
presentation (NOT a Word doc), which succinctly
summarises your business in order to communicate to
investors that they should consider investing in you and
“invest” time to evaluate doing so. To be clear, this should
actually be a PDF, converted from PowerPoint. It prevents
system error and people changing your slides etc.
What are pitch decks for?

Decks are a “teaser” sales document to get you on the
path to investment, nothing else:
They communicate what you do and that your

company fits into their investment mandate/
investment interests.
They elicit preliminary interest in your company
from investors, so they want to know more.
They serve as an opportunity to showcase your
business and team on softer metrics.
What pitch decks don’t do?

Decks do not serve to:
Communicate the passion and energy of the team;
Spell out each and every nuance of your business;
Indicate quite how amazing the opportunity really is;
How an investor is going to invest on the basis of it.
58
TYPES OF
PITCH DECKS
It is absolutely imperative to understand that there are

different types of pitch decks for different situations
and to answer different questions.
Fundamentally, there are two types of pitch deck:
Reading decks
Situation
These are read primarily, without meeting with founders.
Form
There are typically more words per page and there are
more slides.
Objective
Founders are seeking to educate as well as

communicate here.
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Number/Variances
There will be multiple. Firstly, the deck is a teaser to get a

meeting (I said it), secondly to support due diligence and
thirdly to support any “nagging” questions founders may
seek to ameliorate (Such as details on their NPS to show
customers love them).
Presentation decks
Situation
These are presented by founders in person and/or on

a call.
Form
They are generally more graphical with fewer words.

Founders are solely focused on communication,
supporting what it is they are saying. The focus is on the
founder not slide (hopefully)
Number/Variances
Generally, founders will only have one of these, but

they may have another if requested, such as to address
questions that have arisen during the pitching process.
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What good decks cover?
There are more bad pitch decks than not. For the
purposes of this discussion, I will talk specifically about
the one I would like to receive before having a meeting
in the fundraising process. The key tenets of approaching
a good first deck are:
Keep it to the point and communicate the salient

high-level points in a compelling manner;
Just cover the key aspects (See below What should
be in a pitch deck). There should be a takeaway
supporting each and every slide at the top or
bottom of the slide, and the pitch deck needs a
logical progression to a conclusion (Invest!);
Put less faith in this document. This isn’t a silver
bullet, so founders shouldn’t think “If I don’t put
in these slides, I’m going to fail.” This is the key
reason why I believe founders write decks that are
too long;
Spend a lot of time making it pretty and readable.
People don’t like to read ugly pitch decks and it
says a lot about your attention to detail (Note: I am
an ex Mergers & Acquisitions [M&A] banker);
Use images and a little humour, in most cases you
aren’t talking to a robot. (Note: Most investors are
actually pretty cool, though not all).
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What should be in a pitch deck?
Overview
In two sentences, what is the business? Put the business

in a box, even if it is not a perfect one. i.e. “We are Uber
for toasters. We are the future of convenient toast in the
morning for busy mothers.”
Problem
What is the fundamental problem you are solving? It

needs to be a real one that a lot of people have and are
not having been solved.
Solution
How are you fixing this problem and how are you
approaching it?
Market size/opportunity
How big is the market you are realistically going after. If

you aren’t going to the US, I don’t want to see that on
the slide, unless it is indicative of the market opportunity
where you are focused. The opportunity size I am going
to use to do math to figure out your potential exit value,
so make it useful and reasonable (Note: I will always do
a valuation exercise on a call with founders’ data points).
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Product
Show me pictures which Illustrate or uses cases and

benefits. Your product these days needs to be polished.
Team
Pictures of the key team I am investing in, title and name,

what they focus on, bullets/logos of prior and relevant
experience. Key for me is answering the question “Why
will this team beat everyone else and why are they the
best team to back?”
Marketing
Simply put, how are you going to get big? If your CAC is
greater than your LTV, that is good to know too. I need
to see that there are scalable, repeatable channels for
you to grow.
Traction
“Up and to the right.” What milestones have been

achieved, what is the stage of the business?
63
Numbers
What are your high-level numbers? I want to know

how big you are already as it is linked to your valuation
and stage. It is not because I want to get confidential
information (See above regarding valuation exercise).
Funding and application thereof
How much money are you looking for, how long does
it last and broadly what are you going to use the
money for?
Hopefully, you will have noticed that I haven’t asked

for details of the “secret sauce” so I can sell it to the
Russians. This is high level. Also, if you are reaching
out to an investor you should already be willing to
trust them, otherwise stop spamming.
What investors learn from your deck?
The short answer: whether we are likely to invest. Simply

put, decks go into two buckets which have binary
outcomes:
64
Good ones Get founders a meeting and see if we

will invest.
Bad ones Pass.
WHY WOULD I WANT TO

HAVE A DECK BEFORE A MEETING?
Now we discussed decks, there are two main reasons why

I want them before a meeting in a fundraising process
and they all come down to working smart, not hard:
They’re time saving
Do I want a meeting?: If I don’t actually want to meet

a founder, then why waste both of our time?
There isn’t much new ideas under the sun: There
aren’t many fundamentally new business models. So
with a few exceptions, I already have a view as to what
I want to invest in broadly. I am also focused on South
East Asia, where I actually prefer (again generally)
non-innovative businesses.
Founders never “spoil the surprise”: The punchline
is important when telling a joke, not raising money. I
want to know what it is I might invest in and whether I
65
am interested. Founders can subsequently ‘surprise’

me with their energy and how committed they are
when I’m ready to be excited.
They help you form better decisions
Create a “dot” to form a line: Every interaction,

whether email, material, call or meet is a data point or
“dot”. Over time these dots line up to form a view or
“line” of the founders and the business.
Make a meeting or call productive: I like to get down
to it, so if I am interested in investing and I know
something about the business, is the time spent with
a founder is productive.
Focus on talking, not researching: I want to focus my
grey matter on responding and challenging what
founders are saying. If I am distracted, such as reading
your deck or researching competitors then you don’t
have me, and that is a very bad thing.
HOW TO
HIT THE DECK
What do I do with decks that I get?
I get a lot of decks and never have the time to read all the
ones which are inbound (I mainly reach out to companies
66
actively). Founders need to understand that it is not

rudeness and they just aren’t special. If investors don’t
reply, sometimes it is literally because their email
didn’t get opened and it is stuck in a massive backlog.
Understand this simple truth, and follow up a lot.
The Stages of Reading a Deck
Quick read #1
I may not even read your carefully crafted summary

email before double-clicking on your deck and firing
it up.
I press “down” every 2 seconds to get 50,000 feet on
what I am dealing with and to see if I close it. That’s a
15-second exercise.
If I am interested, I will skim through, focusing on
what ‘appears’ relevant, skip anything which ‘appears’
boring or too intense and then that’s that.
If there is something I notice where founders are
teaching me something, you have my attention and
I will read the whole thing in detail. That’s pretty rare,
but we invested in a company that did that.
Decide on the next step.
Emails not interested and delete the email, or schedule
a call. Regardless, I track pitches in a system and note
whether I will follow up in future in case things change.
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Quick read #2 before a call
Depending on how interested I am I will scan the

deck again to refresh my memory of who and what
I am about to talk about. I hate being inadequately
prepared, so prep time is linked to how well I know
an industry.
Read whilst we are talking (more and less)
I always have the deck open on a call or in hand if in

a meeting. I look for stand out points that need to
be clarified. If the call is going well I don’t look at the
deck again after 10 minutes and focus on engaging
with the founder.
If there is a new, visual presentation, I still have the
deck in hand to refer to (and will pick up on any
discrepancy between the two of them).
Share it internally if I am interested after a call and
see about having a meeting. At that point, I am really
interested and any meeting is serious.
I will circulate a deck to partners to get their view with

a quick summary of our chat and a line stating whether
we should push to get the deal done or wait to monitor
traction. It is worth noting that for my fundraising process,
68
I personally prefer to have a call before a meeting. I have

a predilection to be amicable with people, so by having
a call to review an opportunity purely on data and the
founders’ intellectual ability to respond in active dialogue,
without the opportunity for creating interpersonal bias, I
believe it has the weighted advantage.
What I don’t do with your deck?
Other commentators mention experiences of founders

having emotional responses to the treatment of decks, I
will get frank on those. Now let me be clear about what I
do not do with decks:
Study It
I almost never study a deck. If I need to, the founder

has done something wrong by writing too much, or not
being clear.
Think there is a correlation between founder

feelings and my time spent looking at a deck,
nor care if founders think I am lazy for not
having studied it
I am not being paid to read decks by founders and nor

do investors have a duty of care to whom are most likely
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strangers having received an email. If that was the case,

the spammed community would support more Nigerian
princes with difficulties getting their money out of the
country (Note: I have lived in Nigeria).
Invest in a deck, I invest in the team

and the general problem they are solving
I am an early stage investor so I don’t invest in a deck,

per se. The deck just says something about the team
who authored it. Later stage investors will more likely
emphasise a deck as you will have hopefully large and
validated numbers. They are investing in the continued
upside, not a new idea, and the team is likely fungible.
Prepare a list of questions to ask founders
I don’t sit down and compose a Q&A. If something sticks

out as being amazing or odd, then I make a mental
note. When I chat to a founder I already know all the key
questions to ask, and the ones I don’t know organically
arise in response to answers.
Share it with anyone other than within the firm
If someone sends me a deck, it is confidential. If I am

helpful and make investor intros, I actually ask for
permission.
70
QUESTION YOU
NEED TO CONSIDER
Why will a founder get a yes or no after

I look at a deck?
Understand that receiving a deck before a meeting

is simply a “hack” to spend more time looking for the
next greater thing, or to allocate more time helping
our portfolio, which we do a lot of. Therefore, a yes or
no when you email me a deck is based on a number of
factors such as:
Is your idea good or idiotic? Are you solving a real
problem, and will you be able to keep solving that
problem whilst getting customers to pay you? Does
your business have longevity; can you make barriers
such as network effects?
Is your solution awesome, or will it be with our help?
Will you beat the competitions’ offers for your
targeted market?
Is your targeted market big enough to get an exit, or
take a meaningful position? Will you be able to get a
big exit for me to get a multiple?
Do your team look incredible or at least good enough?
If you are doing an enterprise data warehousing
solution and none of the team have the experience
I will pass. If you have Tier 1 company logos for your
experience you get points etc. Does your team cover
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all the important divisions (otherwise state you need

to hire)?
Do you have thoughts on monetization and are they
reasonable? If you aren’t Nielsen and you are going to
make money from data, or advertising for that matter,
I won’t take you seriously.
How much are you raising? Are you too early or big
for us to invest?
What countries are you focused on and is the timing
right? In SEA, if you only want to do one country,
this doesn’t work unless there are exceptional
circumstances.
What is the competitive landscape like? Can you win
and what will it take? If there is a #1 twice as big but
they just got bought by a corporate that will mess it
up, I am still interested.
How is the market going to move, and how long? If
timing is bad, then I will pass.
How are you going to get big? Do you know how
marketing is going to get you there? Do your unit
economics allow you to shrink the market and take a
large share, for example?
For the length of time you have been operating,
what traction have you got? Results divided by
time matter.
How can contact change a view?
There are some arguments for not receiving a deck before
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a call/meeting in certain scenarios. Personally, I prefer a

standardized process where all potential investments are
addressed in a fair and consistent manner. There is a lot
of art to investing, so where I can apply even a weak-form
science, I think it is advantageous.
Whether I get a cold call, referral, met someone at an

event or even it is a friend looking for funding, I treat
everyone the same. Yes, if friends reach out formally for
investment rather than to meet up for advice, I insist on
treating them the same way.
If I am sent a nice summary email

instead, is that ok?
No. Yes, I would like a summary of the opportunity, in

bullet-points, but I want the deck to be in that email.
FIRST THOUGHTS,
SECOND THOUGHTS
How I think during a call or meeting is key to this analysis.

To understand why I have formed my view (other than
time allocation), it is critical to understand how I think
and what I am trying to achieve in a dynamic interaction.
There are four points here:
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1. I need enough information to ask the right

questions to allow founders to shine and to
ensure we end a call on the same page.
See if you know the industry in and out.

See if you are doing the right things, or what
additional things you can do and for us to debate
them there and then.
See how you think about the opportunity.
Do you think big enough, are you ambitious?

Are our aspirations aligned? If you want to make
a RM20m business, that’s great, but it generally
isn’t for me.
2. I need the founder to help direct my thinking

and bring up my comprehension (AKA what I
can’t Google or don’t have the time to).
I expect you to know your business better than I do.

There is a short period of time for me to get close
to sharing your vision
If you can talk me through your competitors’
strategy and positioning, I can get certain that there
is a good chance of you being #1, which is key.
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3. Are these guys going to beat everyone? Do I

want to win with them?
I like to have a beer with nice, smart founders,

but I want to invest in founders who will win. I
want to focus on challenging founders to see
how great they are.
I only really start to care about whether I like
founders and can work with them once they
help me get past my “crocodile brain”, the
“fear gatekeeper”. I can focus on rapport then
and dreaming of the potential, how I can help
them achieve it.
4. I want to put you in a box fast to understand

the world you are in.
I read a lot and talk to a lot of people, so I have

seen most things before. Putting you in a box,
even if it is not the right one, allows me to focus on
the differences, by removing the similarity. Pattern
recognition is key to being able to understand the
nuances, and the devil is in the details. I want time
to get into those details, not the basics.
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REVIEWING
MY APPROACH
There are benefits and considerations of my approach to

receiving decks before meetings:
BENEFITS
Save time
Does the startup fit our investment mandate and

interests? If not, we aren’t going to invest anyway.
No wasted meeting if there is an obvious portfolio
conflict.
I read faster than people talk, so reading a deck before
a call means more time spent on the value-add bits.
Avoid uncomfortable situation
If founders know I always want a pitch deck, then

founders who don’t like sharing decks, won’t contact
me or will adjust their pitch deck before sending to
me. Either way, there are no situations I have to say
‘do or don’t, up to you’ which is not a nice thing to do.
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Better outcomes
With enough lead time, the subconscious

processes the opportunity.
More productive, focused calls lead to better
decisions.
Ethics
Do not have meetings where competitive information

will be inappropriately shared (I expect the deck not
to be sharing competitive information and founders
should already know why we invested in).
CONSIDERATIONS
The apprehension of an entrepreneur to share
Founders may not want to share pitch decks and

sometimes will ignore a request for decks. May miss
out on an opportunity, though I think the better
founders know that execution matters more than
ideas so will be happy to share their pitch deck.
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Missed opportunity to network
In many cases, it matters more who you know than

what you know. It is always great to meet people and
exchange ideas if you have the time.
Form opinions
There is the potential to form inaccurate and

damaging opinions of a start-up whitout creative
cognitive bias. No one can truly be unbiased and zen
when listening to people. Whether reading a pitch
deck accentuates this bias is a fair question. If one
is too biased you may think that Uber is just another
taxi company not solving a particular problem.
Some people can’t write pitch decks which

may mean missed opportunities
Tough, you need to sell and the quality of your pitch

deck often links to quality of your product. In the Valley
there may be a lot of tech-only teams who somehow
can make a beautiful product but not enunciate their
business to VCs, but with my focus, I invest in balanced
teams which can communicate not only to consumers
but to me.
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Conclusion
If you are a founder looking for an investment from me,

please respectfully send me a deck before you ask for
a meeting. I am open to changing my view, but I have
one at present. I think this is the idealized start to a
fundraising process.
TELL YOUR STORY ,

FROM PROBLEM TO SOLUTION
People readily accept the idea that a presentation

needs structure, and the sonata form of exposition,
development, recapitulation is a good structure. Yet
they often still don’t quite grasp what that should look
like in practice. We’ve agreed a pitch is telling a story –
but what is the theme of that story.
A pitch story must be a story of problem and solution.

Most pitches contain an unending load of information,
but precious little persuasion. Why? Because they are
constructed in a business mindsets of facts, data and
information. You must free yourself from that. Don’t
concentrate on the data, concentrate on the problem.
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Your audience have a problem they want to solve. They

are not in the room with you as a favour to you, there are
there because they’re worried about a problem, and you
might – just might – be able to solve it for them. So when
you construct your pitch, construct it as a story, not just
any story, but a story of problem and resolution.
Don’t be shy about dwelling on their problem. Define it,

discuss it and deliberate over it. When you are ill, there
is nothing more reassuring than a doctor who can talk
to you about your symptoms as accurately as you can. It
creates a wonderful sense of empathy and trust.
The same applies in business. A good pitch starts with a

crystal-clear exposition of the problem you are trying to
solve. The unspoken response you want in the minds of
your audience is, he may not have solved it yet, but this
guy really knows what our problem is. That quickly leads
to the feeling, if he understands the problem well, I trust
him on the answer.
Then elaborate. Develop your understanding of that

problem. Show some research, statistics, even some
anecdotal insights, which dramatize that problem. The
purpose of this stage is plain; it is to make your audience
gut wrenchingly, suicidal and miserable about the scale
of their problem. Why? Because a doctor who cures a
headache will be remembered for a moment, but a doctor
who cures a cancer will be remembered for a lifetime.
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The bigger the problem, the more valuable the solution.

Once you have really brought your audience down, you
need to start showing them the answer. But don’t be
timid about labouring the point on bringing them down
first. Worry with them for a while. After all, if you take their
worries seriously you are taking them seriously
Having proved yourself their equal in anxiety, you

now need to prove yourself their superior in solution.
Sympathetic diagnosis is all very well, but then you have
to offer treatment. This needs to be gradual. A striptease
is not sexy if it’s done in a hurry. However, before we
debate too much about how to reveal your solution, you
need to have a solution in the first place.
Finding the right solution to a business problem is usually

hampered by the expectation that the answer has to have
some unique “eureka” factor. Don’t worry about that for
a nanosecond. The solution to most business problems
is usually not some astonishing breakthrough idea. It is
more often a healthy dose of pragmatic common sense,
underscored by some real passion about delivery. The BIG
point for now is to understand that is not the originality
of the idea which drives most business successes, it is the
commitment to making the idea happen.
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CHAPTER 06
PAYING
DUE
ATTENTION
Chapter 6: Paying Due Attention
THE DUE DILIGENCE

PROCESS AS AN ENTREPRENEUR
The due diligence process gets you one step closer to

getting the capital that you require for your venture in
the bank. Typically, when you are sharing information
with the investor your business offering is appealing in
the following areas:
Strong founding team composition and strengths;

Overall attractive business concept and business
model;
Large market size and anticipated growth of market;
Good traction: revenue and/or user growth;
Viable unit economics: Customer Acquisition Cost
(CAC), Customer Lifetime Value (CLTV), Marginal Cost
of Product, Product Margins Scalability of distribution
and/or production;
Solid distribution channels;
Company has significant partnerships or contracts;
Clear understanding of the competitive landscape
and strong competitive advantage;
Well-developed financial projections & expected
additional capital requirements;
Reasonable burn rate and current cash position;
Plausible exit opportunities: M&A, PE, or IPO.
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MY PERSONAL EXPERIENCES
AS AN ENTREPRENEUR
Below is a summarised and organised “checklist” an

entrepreneur can consult with, in no particular order:
1 Stay focused and start small.

Focus on creating a single item on a small scale, create
all the associated moving parts, then combine them and
master the process.
Stay knowledgeable and

continue your personal growth.
Never stop evolving. Keep on experimenting different
2
process and campaign. Measure and track all the
experiment and replicate what work efficiently in term of
costing. Make reading books and articles as a necessity
rather than a mere hobby.
3 You only have one shot at

this, so start over-delivering.
Have a game plan, be open to objections, anticipate
setbacks and research your competition. Get a business
coach, especially if it is your first business – a good business
mentor will help you save time and money.
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4 Develop, expand and

maintain your business network.
It is your first source for talent and clients. Have a clear
and focused message of what you do for your network
and prospects. As easy as it sounds, most people could
not describe their business in the initial stages. Attempts
to share your message and “spread the word” can be
very strenuous if no one understands what it is.
Have vision, and build a precise plan

for what’s actually making money. 5
It no longer matters how many users you have, it matters
how much hard cash your users generate. Structure your
business to get paid in advance for products or services.
This will keep your cash flow positive from the start:
#working capital.
If possible, a healthy cashflow in the bank should be of at

least 6 months of runway. Be ready to support yourself
without any substantial income for a long time. Make
sure you have enough funds to employ people as the
need arises.
Businesses run into problems because they don’t

have the right people in the right seats. Too often,
entrepreneurs want to keep the labour cost as low as
possible, and end up trying to do too much on their own.
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Free yourself from those areas in which you lack the skills
and focus on what you know and are best at.
6 It is impossible to do
everything by yourself.
You need the best team in place to weather the most
definite obstacles you will encounter. Or, as one of the
thread contributors put it: “Mix an ordered bureaucrat,
a crazy scientist, and a good businessman/woman, and
find a good manager to make them communicate”.
Get the right people on board and keep the wrong

people off. Hold regular meetings to explore the needs
of your team. Your best assets are the people with whom
7
you work.
Take advice
and make your decision.
As an entrepreneur, you will receive plenty of advice from
plenty of people. It is your responsibility to digest all this
advice and these ideas to make the right decisions. No
one knows your business better than you.
8 Find a good accountant/lawyer.

You need someone who can explain how different
business structures work (Private Limited, Partnership,
Limited Partnership, etc) and get the right structures in
place from the beginning to save on taxes.
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Go to where the market is. 9

“Build it and they will come” is a blueprint for failure and
it no longer applies to start-ups. Create a lean delivery
framework that will deliver to the market as quickly as
possible. Test the market demand as early and as often
as possible. Get outside and talk to customers. If you’re
not quick to act on demand, you will miss opportunities.
10 Choose your partners

and investors wisely.
There are a number of bad partners and investors out
there. Trust your instincts – they will serve you well as an
entrepreneur. Listen to your customers – it sounds simple
enough, yet it is one of the most overlooked areas – to
effectively anticipate their needs and leverage your
biggest critics to develop an excellent product/service.
Do what you absolutely love. 11

Don’t fall in love with an idea – try to stay as objective
as possible and address your weaknesses. Keep your
thought process clear and know when to say “no”.
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12 Think twice before starting

a romantic relationship with a co-worker.
If things work out – that’s marvellous, but what if they
don’t? Can you afford the risk of losing someone valuable
to your company and to your heart? All of your energy
should go into figuring out your business, personal
matters like romantic relationships whether you like it or
not, end up taking a backseat.
Keep yourself healthy. 13

Long hours, numerous meetings, traveling constantly,
extreme levels of stress, eating on the run all add up to an
overworked and over-exhausted mind. In order to stay
sharp to make the right decisions and lead your business,
you must stay healthy, both physically and mentally.
Ideally, you need to find a way to incorporate health &
fitness into your work life as much as possible.
THE MOST IMPORTANT

LESSON I LEARNED
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For the past fifteen years, I’ve had the privilege of building
two listed co which one was listed on MESDAQ ( now
known as ACE market) and the other listed co in Hong
Kong Growth Entrepreneur Market which is acquired
through M&A of my own electronic waste recycling group
of companies based in Malaysia.
What’s more important to me is the knowledge I’ve been

able to accrue during this journey. At times, it took many
dark turns. I made many mistakes, but I also gained many
invaluable insights from those misgivings.
Here are the most important lessons I learned during

the process of founding, building, financing, scaling, and
getting acquired:
1 Starting and scaling your business is a huge

personal financial sacrifice — prepare for it.
Founders should always expect to remove themselves
from the payroll at some point in time. Why? Because
if you truly believe in your business, you know you need
to allocate whatever money you do have to hiring or
retaining your team and maintaining your speed of
production. This will ultimately build the value of your
equity in the long run.
In my case, my co-founder and I went a few years without

salaries, then many years at a reduced below market rate.
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We were able to survive because of our savings from

previous careers, but if you’re thinking of making the
plunge to start a business, you need to make sure that
you have enough money saved to pay for basic living
expenses (e.g. rent, food, etc). You will need it.
Managing people is really hard. 2

You need to grow as a person if you want to be an effective
leader. Managing people is by far the toughest challenge
I faced as a founder. Between your own ego and a soup
of different personalities, you need to understand how
different people — including yourself — think and act.
How do you get others to complete mission-critical

tasks while navigating your own responsibilities and life
challenges? It takes a lot of self-control to not have your
own personality or ego run the show.
Although I still have a lot of room for improvement

here, I learned that an effective leader must have the
ability to listen and make people feel understood by
acknowledging their opinion.
Of course, that isn’t always easy. As a founder, you might
know how you want to move forward even before you
speak to an employee. But employees always need to
have agency. Meaning to say, you need to take 20 minutes
from your day to hear what they think.
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When people feel empowered, they can produce

incredible results. When they feel diminished or micro-
managed, they check out mentally. Having your team
feel like they are heard and valued will help you build
trust and move your company forward.
3 A strong company culture isn’t a

nice-to-have. It’s a need-to-have.
As a founder, never underestimate the importance of a
robust corporate culture. In the first few years of running
the business I was so focused on building the actual
business that I put its culture on the back burner. I didn’t
realize how closely culture is tied to success until we
developed a truly toxic environment.
Creating values and a charter that employees got behind

changed the perspective of our team and grounded our
company culture. The entire team created and edited our
company charter over time, giving us a shared framework
and a sense of ownership.
4
Raising capital is tough, but
managing your relationship with
investors is even more difficult.
Most people see raising capital as a badge of honour
and a marker of success — as if your job is complete once
you’re funded, and I’d say that is so far from the truth.
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Surely, raising money is definitely hard, and you will need

to understand how to play that game to be successful,
but what’s even harder is determining how to wisely
use that money. It’s something not many people will
likely advise you on. Along come the board meetings,
cap table management, investor updates, relationship
management, legal administrative tasks and so forth. It’s
a lot to manage.
To meet expectations, you will need to build rapport

with your investors on an ongoing basis, be in regular
communication with them, create updates for them (either
weekly, monthly or quarterly), and, most importantly,
deliver on your promises to them.
Liaising with investors can feel like a chore and a

distraction but it’s critical. If you do not manage these
relationships and fall out of communication, investors
can tune out and not invest in your next round, which
could send negative signals to potential new investors.
Investors can even kick you out of your own company if
they have enough control.
I realised that being transparent and open with our

investors about our issues would motivate them to guide
us more. You should make investors work for you by
establishing a close connection right off-the-bat.
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5
Your personal relationships will
take a hit, and you will have to say
goodbye to a work-life balance.
Building my business came at the expense of not
being present for a lot of important family and social
events. I missed birthdays, weddings and, worst, my
own honeymoon.
The reality was that I had no choice but to work and

couldn’t afford to take time off. Plus, whenever I did
take vacation (which was rare) I found myself looking for
the best Wi-Fi signal to hold meetings and respond to
emails. Looking back, I realize that more work did not
equal greater success. It’s all about smart work, not harder
work. After years of working six to seven days a week for
12-16 hours each day, your mind and body begin to break
down, and your ability to think effectively deteriorates.
It’s important to remain centred with mental clarity —
6
something I learned too late.
You are NOT your business.

I made the mistake of thinking I was the business. My
entire identity was attached to it and with that came great
highs and lows.
It did take me some time to understand that I was not

my company. It took even longer for me to detach myself
from it. Once I understood this, running the business
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became a lot more simpler. I made better decisions. I was

a better negotiator. I enjoyed being at work more.
Understanding that you are your own biggest obstacle is

critical, because that means you will know that you need
to get out of your own way. Only by doing that can you
start reaching your goals and your vision.
7 The founder’s journey is extremely lonely.

Being an entrepreneur is not as sexy as it’s made out to
be. In fact, it’s the opposite. I thought being the boss of
my own company would give me freedom, but it shackled
me instead. Not one minute went by when I didn’t think
about the company. Many times, I couldn’t share my fears
with family, team members or investors because I wanted
to shield them from the turmoil.
Furthermore, when employees left the company, I took it

personally. I was so disappointed and even felt betrayed
in some cases. Eventually, I realized that turnover happens
and it’s rarely personal and understanding this makes
turnover easier to digest.
Never burn a relationship. You should always fondly

remember the work you did with someone and keep in
touch with them. You never know when that person can
help you down the line.
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Your biggest resource is time. 8

The biggest resource that you have is your time. You can’t
— and shouldn’t — work 24 hours a day, so knowing what to
work on and how to work on it is so much more important
than working hard on the wrong things.
Ask yourself: What is the intention and purpose behind

every task? Is it pure busy work or something that will
make a difference? If that thought leadership piece,
conference, speaking engagement or phone call isn’t
going to move the needle for your business, then
don’t do it. Your time as an entrepreneur is too limited
and valuable.
9 Success feels great, but the road to

it is long and difficult.
Failing sucks — period. It’s embarrassing.It’s disappointing.
It hurts. Let’s face it: Failing serves the unique purpose of
giving you access to critical insights that will help your
business get to the next level.
Failure plus a lesson equals deep insight. Failure with

nothing learned is a true failure. However, you need to
think deeply to understand the what, why and how behind
your failure. Only by doing that exercise will you be able to
extract the insight you need to move forward.
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10 Getting acquired and finding the right

exit is 10 times harder than raising capital.
In our case, we were lucky enough to receive inbound
acquisition interest, which resulted in four offers to buy
our company. Do note that this didn’t happen overnight.
It took hours of conversation and in-person meetings
over a six-month period.
Once we worked with our board to pick an offer, it took us

another three months to close the deal because of due
diligence and legal negotiations. This process played out
faster than usual in our situation because we had pre-
existing relationships with the groups represented in
each of the purchase offers. If you’re starting from scratch,
trust and relationship-building can add even more time
onto the acquisition timeline.
Picking the right acquirer was critical for us especially after

all the years of love and work that we put into building the
company. I wanted to be sure that the company buying
us would be able to take our business to new heights and
further our mission to help entrepreneurs.
Hopefully, if you can learn from my mistakes, you can

avoid them for yourself.
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CHAPTER 07
LOOKING
FOR LOOT
Chapter 7: Looking for Loot
WAYS TO FIND
YOUR INVESTORS
Need to find investors to launch a start-up or scale

your business? There’s more than one way to approach
fundraising and to get noticed by those with the
capital you need to get to the next level.
As I share with members of my Capital Wisdom Academy

workshop, where we help entrepreneurs from A to Z
with their capital raising efforts, having enough working
capital and runway to get to your next milestone is vital for
giving your business the chance to live to its full potential.
We empower entrepreneurs with “smart capital”.
We are entrepreneur for entrepreneurs.
Of course, the chances of receiving a random call from

some super-sized venture capital firm are pretty small.
Especially, if you haven’t attracted some well-connected
investors. Thankfully, for today’s entrepreneurs, I’ve
seen an increasing number of ways start-ups are
getting noticed, found and are connecting with
potential investors.
If you haven’t landed the money you want for your next
series yet, consider these options and then share a great
pitch deck with interested parties to convince them
of the potential of your business:
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Online Fundraising Platforms
The past five years have given birth to virtually countless

online fundraising platforms. They have become highly
popular with sophisticated and accredited individual
investors, angels, and even banks and funds looking for
new ways to deploy capital.
The major platforms run from peer-to-peer lending sites

which offer business loans to donation based, debt and
equity crowdfunding portals.
For donations you can try Kickstarter or Indiegogo. For

equity crowdfunding platforms in Malaysia, as at this time
of writing, there are 6 regulated market operator licensed
by Security Commission of Malaysia to conduct equity
crowdfunding. These platforms are as the following:
PitchIn;
CrowdPlus;
AtaPlus;
Funded By Me;
Crowdo; and
Eureeca.
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Peer to Peer Lending as approved by Security

Commission Malaysia are
B2B FinPal;
Fundaztic;
Ethis Crowd;
Quickash Malaysia;
FundedbyMe; and
Funding Societies.
Even if you don’t use online platforms to raise all the

money you want, they can be powerful platforms for
getting noticed. The key is finding the right match in a
platform for your venture and needs, as well as being
realistic about what it will take to make a campaign work.
Events
Success in business and fundraising is all about visibility,

getting noticed by the right investors, who you know,
and who knows you. Attending events is a great way to
achieve this. Try to find out who is attending the event
ahead of time and schedule meetings to be productive.
This can be pitch nights for presenting your own

opportunity and meeting active investors who are there,
engaging in coding marathons, or simply getting out to
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organised networking functions and industry trade

shows. To get ahead of the competition and take a more
passive route, consider attending other events where
your investors are likely to be. Think sporting events,
charity fundraisers, film festival and new brand launches,
fashion shows and etc.
Social Media
Social media can be your best friend as a lean start-up

or solo entrepreneur looking to test the market, gain
traction, and attract investors. It makes it easy to be
discovered, and is still one of the most cost effective
methods of reaching others.
You can take an inbound approach with your own

posts and updates, or take a more active approach
with collaborations and leveraging sponsored posts or
influencers.
Direct messaging can be powerful too. If you can get the

social profile handles of well-fitting investors, it might
only take one great message to connect with the capital
your start-up needs.
When it comes to social media, here are the most popular

channels and how to use them:
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LinkedIn for cold messages or to seek quality

introductions to pass the social proof with guarded
investors such as Venture Capital investors. In my
opinion, LinkedIn Premium is totally worth for
unlocking certain features.
Facebook for meaningful relationships after you have
been able to meet with an investor once or twice. It is
critical to build the relationship to generate trust.
Twitter for thoughtful conversations and engagement
with relevant information shared by the investor.
Blog
Blogging is one of the most underestimated methods

of attracting inbound attention, telling your story,
progressing potential investors through the thought
process of wanting to invest in you, and remaining visible
through each series of fundraising. Even without a website
or blog of your own yet, you can publish via Medium or
LinkedIn.
Moreover, another good option is to go to the blogs of

the investors that you are looking to target. They all read
their comments and often engage with responses. Leave
a thoughtful comment to get noticed and start building
the relationship from there.
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Email
Simple emails have proven to be able to get the

attention of notable angel investors and VCs. They’ve
even be responsible for the launch of some very
important and notable start-ups.
Apply to Accelerators
Popular start-up accelerator programs always have

an open invitation for applications from serious
entrepreneurs. If accepted, you’ll likely get a modest
check to keep developing your work, as well as
introductions to other investors, business advice and
help in staging future fundraising rounds. Just make
sure you know the terms and look for a good fit before
you apply, or accept the help.
Typically Accelerator programs include a demo day

where the start-ups attending the program pitch to a
crowd of investors.
In the event the accelerator that you are considering is

outside of the list included in the piece above, I would
highly recommend you to do extensive research to verify
the type of success stories and the track record from
such program. You may be better off using that equity
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that you intended to allocate to the Accelerator to create

instead a very active board of advisors and incentivize
them to help with making investor introductions.
Start Sharing Your Product
Fundraising and growth needs to be strategic to be

successful. Yet, far too many entrepreneurs and startups
aren’t focusing enough on just getting their product or
service out there in the hands of customers, influencers,
and in turn, in front of investors.
If you can acquire real customers, you will have under less
pressure to seek outside money. When you do, you can
achieve better terms, from better investors.
If sales are tough, then there are freemium and hybrid

business models that can help get your product in the
market and starting to generate some buzz.
As you can see, there are plenty of options to tap for

funding – just be sure to choose the right one for you.
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CHAPTER 08
VIVA
LAS VC
Chapter 8: Viva Las VC
HOW VENTURE
CAPITAL WORKS
Venture capital firms are, without a doubt, the muscle

behind innovation as they support the company they
may invest in, from the early stages, all the way to the IPO
— especially those with larger funds that have billions of
dollars under management.
DEFINING THE
INDIVIDUALS IN A VC FIRM
As I have been sharing with members of my academy, we

help entrepreneurs from A to Z with capital raising efforts,
empowering entrepreneur with “smart capital”. We are
entrepreneur for entrepreneurs because we understand
how tough and the struggle being an entrepreneur.
VC firms have different types of individuals working
at the firm.
The most junior people want to be analysts. These

people are either MBA students in an internship, or
people that just graduated from school. The main role
of analysts is to go to conferences and to scout deals
that might be within the investment strategy of the fund
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that the VC firm is investing out of. Analysts are not able
to make decisions, but they could be a good way to get
your foot in the door and to have them introduce you to
someone more senior within the firm. However, analysts
are for the most part conducting research of the market
and studying you and your competitors, so be careful
with educating them too much.
The most immediate position after the analyst is the

associate. An associate could be either junior or
senior. Associates tend to be people that come with a
financial background and with powerful skills in building
relationships. Associates do not make decisions in a firm,
but they can definitely warm up an introduction with
individuals involved in the decision-making.
Above associates, you will be able to find principals.

They are senior people that can make decisions when it
comes down to investments, but they do not have full
power in the execution of the overall strategy of the firm.
A principal can get you inside the door and be your lead
to help bring you through the entire process of receiving
funding. Principals are those individuals that are close
to making partner. They have power within the firm but
cannot be considered the most senior within the firm.
The most senior people within a VC firm are above

principals and are called partners. Partners could be
general partners or managing partners. The difference in
the title varies depending on whether the individual just
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has the voice in investment decisions or may also have a

say in operational decisions. In addition to investments,
partners are also accountable for raising capital for the
funds that the firm will be investing with.
Lastly, venture partners are not involved in the day-

to-day operations or investment decisions of the firm.
Venture partners have a strategic role with the firm,
mainly involving bringing new deal flow that they refer
to other partners of the firm. Venture partners tend to
be compensated via carry interest, which is a percentage
of the returns that funds make once they cash out of
investment opportunities.
Another figure in a VC firm is the Entrepreneur in

Residence (EIR). EIRs are mainly individuals that have a
good relationship with the VC and perhaps have given
the VC an exit, helping them earn cash. EIRs generally
work for a year or so with the firm helping them to analyse
deals that come in the door. Ultimately the goal of an EIR
is to launch another start-up for positive investment.
Investors of VC firms are called Limited Partners (LPs).

LPs are the institutional or individual investors that have
invested capital in the funds of the VC firm that they are
investing of. LPs include endowments, corporate pension
funds, sovereign wealth funds, wealthy families, and
funds of funds.
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THE PROCESS OF
GETTING FUNDED BY A VC
First and foremost, identify the VC that might be

investing within your vertical. There are plenty of tools
you can use to identify who might be a fit (You can use
Crunchbase, PitchBook, CB Insights, E27, TechInAsia,
or BEAM).
Once you have your list of targets, you will need to

see who you have in common and close to you who
would be in a position to make an introduction. The
best introductions come from entrepreneurs that
have given good returns to the VC. VCs use these
introductions as social proof and the stamp of approval
on the relationship. The better the introduction is, the
more chances you have of getting funded.
As a next step to receiving the introduction, and in

the event there is a genuine show of interest from the
VC, you will have a call. Ideally you would want to go
straight to the partner to save time, or the goal would
be to get an introduction to the partner ASAP. If you
are already in communication with the partner after the
first call, he or she will ask you to send a presentation
(also known as the Pitch Deck) if the call goes well and
there is interest shown.
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After the partner has reviewed the presentation, he

will get back to you (or perhaps his assistant) in order
to coordinate a time for you to go to the office and to
meet face to face. During this meeting, you’ll want to
connect on a personal level and to see if you have things
in common. The partner will ask questions. If you are able
to address every concern well and the partner is satisfied,
then you will be invited to present to the other partners.
The partners meeting is the last step to getting to the

term sheet. All the decision-making partners will be in the
same room with you. Ideally the partner you have been
in communication with has spoken highly of you, unless
there have been issues (which you’ve hopefully able to
cover by this time).
You’ll receive a term sheet if you are able to satisfy the

concerns put forward at the partners meeting. A term
sheet is just a promise to give you financing. It does not
mean that you will get the capital. It is a non-binding
agreement.
Following the term sheet, the due diligence process

begins. It will typically take a VC one to three months to
complete the due diligence. Unless there are major red
flags, you should be good to go, and receive the funds
in the bank once all the offering documents have been
signed and executed.
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THE FUNDRAISING TIMELINE

(APPROX. 6 MONTHS)
PHASE 1 PHASE 2 PHASE 3
Initial Email with an First call

introduction executive summary is schedled
or pitch deck
PHASE 6 PHASE 5 PHASE 4
Offering docs Follow up Meeting

are sent meeting in person
PHASE 7
Cash is wired
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HOW
VCS MONETISE
VCs make money on management fees and on carried

interest. Management fees are generally a percentage of
the amount of capital that they have under management.
Management fees for the VC are typically around 2%.
The other side of making money is the carried interest.

To understand this concept, carried interest is basically
a percentage of the profits. This is normally anywhere
between 20% and 25%. It is normally in the largest range
if the VC is a top tier firm such as Gobi Partner, Sequoia,
or Golden Gates.
In order to cash out and receive the carried interest,

the VC needs to have the portfolio of each one of the
funds making an exit, which means that the company is
acquired or will go through an IPO where investors are
able to sell their position.
Normally exits take between five to seven years if the

company has not run out of money or the founders
have run out of energy. Typically, VCs want to sell their
position within eight to 10 years, especially if they are
early stage investors.
Start-ups are a very risky type of asset class and nine out
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of 10 will end up failing. For that reason, VCs will go for

those companies with the potential of giving them a 10x
type of return so that it can help them with the losses
of other companies inside their portfolios. If you are
not able to project these kinds of returns, a VC might
not be the route to follow for financing.
VC INVOLVEMENT
IN YOUR COMPANY
VCs would like to have a clear involvement in your

company in order to stay close to their investment and
to have a say in major decisions that could impact their
returns in the long run.
With this in mind, VCs will normally buy in equity between

15% to 45% of your company. Normally in earlier stage
rounds, it tends to be on the higher end, but VCs need to
be mindful of the stake they leave with the entrepreneur
so that they are still motivated enough to stick around
and to continue focusing on the execution.
VCs will request board involvement in return for the

investment that they are making in your company. There
are two types of board levels. One will be the board of
director seat in which they participate in major decisions
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of the company. This is especially important when it comes

to future rounds of financing or merger and acquisition
transactions (also called M&A).
The other level of board involvement is what is known

as board observer, which means they will have an open
invitation to attend meetings without a vote. In my
experience they still have a lot of influence. Below is an
image comparing directors vs. observers.
BOARD MEMBER VS BOARD OBSERVER
Previous investor No fiduciary duty

Lead investor on a No voting rights
previous round of Same level of influence as
financing directors
Real interest is to protect Normally they just report
his/her investment back
No additional equity is Potential good
granted listener and different
perspective added to the
conversations
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UNDERSTANDING THE
VALUE THAT A VC BRINGS
Most VCs say the main reason why an entrepreneur should

consider working with a VC is because of the value they
can bring to the overall strategy and execution of the
business. However, that is far from true.
You will need to do the due diligence in order to really

understand if a VC is going to add value in addition to
capital. This value can be introductions for potential
partnerships, their network of other successful founders,
or the infrastructure the firm brings.
The infrastructure could be the most attractive part.

VCs like Andreessen Horowitz or First Round Capital
have a dedicated team of marketers, recruiters and
other resources to bring into a company they invest in.
Ultimately, this helps in fuelling the growth of the business.
CUTTING THROUGH
THE VC NOISE
As a founder you want to ask the right questions, which

will help you understand if the VC is truly interested in
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investing, or what style of partners you will be onboarding

to your company after the financing round is closed.
If the VC firm has not invested in more than 6 months

in new companies, that indicates that the VC is having
trouble closing their next fund or that they are in
fundraising mode. If this is the case, move on to the next
VC, otherwise the process will be put on hold. Closing
a fund typically can take between 12 to 24 months.
Ask how they typically work with portfolio companies.

Ask the VC to make an introduction to a few founders
from companies that have gone out of business. These
questions can provide a complete picture and see how
they behave when they are on the other side of the
mountain. During the dating phase, everyone is happy
without any worries – so don‘t be mistaken, as people
change when there is money on the line.
In addition, ask about allocations to the options pool

for employees of companies your size. (This should be
written out in the deal’s terms.) If you see they want to
allocate over 20% on a seed round, or over 10% on a
Series A, round of financing that could mean they may
eventually want to replace the founding team.
On average, out of 1,000 companies a partner ends up

investing in 3 to 4 of them on a yearly basis. This means
that only 0.2% companies receive VC financing.
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VC AND PE:
SAME OR DIFFERENT?
There is confusion between these two types of investors.

Venture capital firms tend to work throughout the
life cycles of a company, all the way to the liquidity
event, when the start-up either gets acquired or goes
through an IPO.
VCs are also very much involved in the operational

structure. However, the main difference is that VCs invest
in people with a greater degree of risk than a traditional
private equity (PE) firm. PEs will go more for the numbers.
They invest in businesses that are already formed, where
the outcome is more predictable.
PEs will often invest in growth stages and later rounds,

so your start-up, if you are in the early stage, will most
likely not be a fit. Wait until you are at a Series C or
Series D round of financing before seeking funding from
private equity.
At the end of the day, VCs are an invaluable tool to get

your business off the ground and reaching for the stars –
but as you can see, it ain’t all that easy nor consideration
free. This chapter has given you enough of an insight
to know what you are getting yourself into when
dealing with them – so at least there should be no nasty
surprises there.
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CHAPTER 09
INVESTMENT
INTEGRATION
Chapter 9: Investment Integration
HOW TO STRUCTURE A
FINANCING DEAL WITH INVESTORS
Is debt or equity fundraising smarter for startups? I get

asked the question of how to structure a round all the time
by entrepreneurs. There is more than one way to fund a
new business venture and fuel its growth. For almost all,
it is going to require bringing in outside money at some
point. Even if that is only to multiply what is working or
to create a source of emergency capital. The two primary
options are to either leverage business debt financing or
fundraise for equity investors.
Each method can carry its own pros and cons. It is vital for
entrepreneurs not to blindly follow the herd just “because
everyone else is doing it.” Discover which is best for you,
at your stage in business, and stack the most advantages
in your corner.
Once you have decided the course of action and have

a lead investor covering at least 20% of your financing
round you would typically also include in the pitch deck
the form of financing in which you are raising the capital.
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DEALING
WITH DEBT
We’re all familiar with debt. At some point, we’ve all

probably at least had a student loan, signed up for a
mobile phone contract, had a credit card, or an auto
loan or lease. Debt means you are borrowing. Often,
you will have to repay in monthly instalments over a fixed
period of time at a predetermined rate. This can however
vary depending on whether you are raising debt from
investors, or are using lines of credit or working capital
loans, or even new hybrid convertible notes.
While non-recourse corporate financing is always

preferred, some new entrepreneurs may also have to
decide whether they will use their personal credit to get
off the ground.
THE PROS
The biggest and most obvious advantage of using debt

versus equity is control and ownership. With traditional
types of debt financing you are not giving up any
controlling interests in your business. It’s all yours. You
get to make all the decisions and keep all the profits. No
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one is going to kick you out of your own company.
Another big pro is that once you’ve paid back the debt
your liability is over. With a fluid line of credit, you can
repay and borrow just what you need at any time and will
never pay more interest than you need to. Looking at the
big picture, using debt can ultimately be far cheaper.
One major benefit that is frequently overlooked is that

business debt can also create more tax deductions.
This may not have a big impact at the seed stage, but
can make a huge difference in net profits as you grow and
yield positive revenues.
THE CONS
The most significant danger and disadvantage of using

debt is that it requires repayment, no matter how well
you are doing or not. You might be burning cash for the
first couple of years, with little in the way of net profits,
yet still have to make monthly debt service payments.
That can be a huge burden on a startup.
If entrepreneurs have not separated their personal and

business credit, they may also find their entire life’s work
and accomplishments are on the line if they default on
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the debt. Your home, cars, washing machine, and kids’

college fund can all suffer collateral damage.
It is also vital that borrowers understand that financing

terms can change over time. Variable interest rates can
dramatically change repayment terms later on. In the case
of maturing ballooned debt, like commercial mortgages,
there is no guarantee of future availability of capital or
terms when you may need to refinance. In the case of
revolving credit lines, banks have a history of cutting
them off, right when you need them most.
Too much debt can negatively impact profitability and

valuation. Meaning, it can lead to inferior equity raising
terms in the future, or prevent it altogether.
Structures used by early stage startups such are

convertible notes, SAFEs ( Simple Agreement for Future
Equity), and KISS ( Keep It Simple Securities). These forms
of debt eventually convert into equity on a subsequent
financing round so it is a good way to bring onboard
people that are likely to partner with you on the long run
with the business. For later stage companies, the route to
follow is typically venture debt.
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SEXY
CONVERTIBLES
Convertible notes are a debt instrument that also

gives the investor stock options. This flexibility
gives them security from the downside, and more
potential upside if the start-up performs as expected.
Theoretically, it can also be easier for some to justify
making the loan, which has specific returns and maturity
dates, versus the unknown.
Convertible notes are much faster than equity rounds.

There are only two documents in place, which are the
convertible note purchase agreement outlining the
terms of the investment, and the promissory note
explaining the conversion and the amount that the
investor is investing.
With convertible notes, there are only three main

ingredients the entrepreneur needs to look after:
The first ingredient is the interest that the

entrepreneur is giving to the investor. This is
interest to be accrued on a yearly basis on the
investment amount that the investor puts into the
company. The interest will continue to be applied
until the company does another equity round, when
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the debt will convert into equity with the amount plus
the interest received.
The second ingredient is the discount on the

valuation. This means that if your next qualified round
is at X amount of pre-money valuation, the investor
will be converting his or her debt at a discount from
the valuation that has been established in the next
round by the lead investor.
The third ingredient to watch is the valuation cap.

This means that regardless of the amount that is
established on the valuation in the next round, the
investor will never convert north of whatever valuation
cap is agreed. This is a safety measure in the event that
the valuation goes through the roof. It is a good way
to protect your early investors and to reward them for
taking the risk of investing in you at a very early stage.
One thing to keep a very close eye on is the maturity

date. This is the date by which you agree to repay unless
you have not done a qualified round of financing in which
the convertible notes are converted into equity. For this
reason, make sure that the maturity date is a date that
you feel confident about. You need to be convinced that
you will be able to raise a qualified round of financing on
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or before that date in order to convert the notes into

equity and avoid being in default. The last thing you
want to happen is to be in default and to have to shut
down your business because investors are demanding
their money back.
FEELING
SAFE
A newer instrument created by accelerator in Silicon

Valley which has been adopted by many early stage
companies. The Simple Agreement for Future Equity
(SAFE) aims to increase simplicity while preserving
flexibility.
Many of these accelerators argue that these notes do

not accrue interest, or have maturity dates, which makes
them friendlier to entrepreneurs. It relieves a degree of
extra burden which can be counterproductive to both
parties.
A SAFE automatically converts to preferred stock at the

next equity round of funding, or when there is an IPO.
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ENTREPRENEURIAL
(AD)VENTURE
Venture debt is effectively borrowing to raise working

capital and growth capital. This is a valuable source of
funding that doesn’t mean giving up more ownership
or diluting equity.
Venture debt financing differs from other sources

of money in that it is normally provided by specialist
entities and banks – such as Malaysia Debt Venture
(backed by MEESTEC) or Innoven (Singapore, backed
by UOB) – that offer their services to funded start-
ups and growing businesses. They understand the
dynamics of a startup and will often lend even though
asset collateral may be weak.
These lenders offset risk by tying loans to accounts

receivable, equipment, or rights to purchase equity
in a default. A healthy start-up can find venture debt
attractive in order to create more time between equity
funding rounds so that more notable milestones can
be achieved. These funds can also help speed through
milestones to reach the IPO.
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EQUITY
EQUATIONS
This type of funding exchanges incoming capital for

ownership rights in your business. This may be in the
form of close partnerships, or equity fundraising from
angel investors, crowdfunding platforms, venture capital
firms, and eventually the public in the form of an IPO.
There are no fixed repayments to be made. Instead,

your equity investors receive a percentage of the profits,
according to their stock. Though there can be hybrid
agreements which incorporate royalties, and other
benefits to early investors.
Typically, the term sheet will be summarizing what are the

terms of the equity round.
THE PROS
Equity fundraising has the potential to bring in

far more cash than debt alone. It not only means
the ability to fund a launch and survive, but to scale
to full potential. Without equity fundraising growth
can be far slower, if not seriously capped. These are
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some of the biggest concerns around the recent

talk of Elon Musk trying to take Tesla private again.
Flexibility in distributions is the biggest draw
to using equity. If you aren’t making a profit, then
you don’t have any debt service. You don’t have
that constant drain and stress. This can empower
entrepreneurs to make far wiser decisions, than
being forced to make rash ones which can cripple
their startups, just to make a loan payment.
Far more important than the money is that bringing
in equity partners means bringing in others with
a vested interest in seeing you succeed. If they
have influence, connections and experience, that
can make all the difference in becoming the next
unicorn success story, versus languishing as a small
business for decades.
Good equity partners can also make it much easier
to secure more attractive debt later on.
THE CONS
The primary fear of giving up equity is loss of

control. Partners can mean giving up decision
making control. That can affect every micro-factor
in your business. It can even lead to you being
replaced by your partners if you don’t retain enough
board seats and voting power.
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A reduced ownership percentage can also not only

mean that you have to split the profits, but in some
cases, some investors may be entitled to any
positive returns before you can get a penny.
One of the lesser appreciated cons of equity
fundraising is the time and effort it takes to soak
up. Loan applications and underwriting may not be
fun or fast. Though without the right connections
and a powerful pitch deck, equity fundraising can be
even more arduous and time consuming. Don’t let it
become a detour and distraction from getting right
to the important business.
To conclude, there are advantages and disadvantages

of both debt and equity fundraising. Know the pros
and cons before you start searching for the money.
Understand which may be the most beneficial for your
current stage of business and how it could help or hurt
for future fundraising needs.
Furthermore, make sure that you have the right legal

counsel representing you. Make sure they are corporate
lawyers that have closed several transactions before you
even consider engaging them.
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This part is especially important because you will be

directly dealing with money, which is always going to
be one of the major factors that can keep your business
afloat or sink it like the iceberg meeting the Titanic.
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CHAPTER 10
COMING
TO TERMS
Chapter 10: Coming to Terms
WHAT IS A TERM SHEET ,

AND WHAT TO INCLUDE IN IT
The term sheet is one of the most important documents

that an entrepreneur can ever construct or sign – so what
do entrepreneurs need to know before they sign one? By
this stage, you’ve put in a ton of time and effort, modified
a product, created a successful pitch deck, and acted on
investor meetings.
The rest of your life, the dreams you have for your start-
up baby, and how much you’re going to enjoy expanding
this company will rely on these concepts and what’s next.
How you presented your company via your pitch deck is
really what got you so far with that potential investor that
you are about to on board.
THE ACE
UP YOUR SLEEVE
Unfortunately, they don’t teach term sheets in school.

With so many other tasks, many entrepreneurs can get to
this point with barely any understanding of what a term
sheet look like, what is and isn’t standard or a good deal,
and how to negotiate.
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It’s wise to get ahead of the game and have your

terms in mind from the founding of the venture and be
working strategically to optimizethe outcome of these
negotiations even before you pitch or catch the scent of
a check.
The main goals to guide entrepreneurs when it comes to

term sheets are:
You want to raise as much capital as possible, while

giving up as little of the company as possible.
To ensure that you have not given up too much of
the upside potential or assumed too much risk on
the downside potential.
CLAUSE
AND EFFECT
There are a variety of term sheet formats out there today.

That includes traditional equity fundraising term sheets,
convertible debt, KISS and SAFE docs. Make sure to
master whatever type of instrument you’ll be using.
Here are common terms, clauses and factors you’ll

need to know and decide at some point for all types
of fundraising.
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1 WHO,WHAT AND HOW MUCH

The main part of this document lays out the different
angel or venture capital firms participating in the round,
how much they are investing, and what they are paying
per share. This is all about the valuation and ownership
percentages.
There have been plenty of high-profile horror stories

of founders who have been ousted from their own
companies. There are likely many more hiding under
a desk somewhere, experiencing the soul crushing
realization they have no control over their own ventures
anymore.
Picking the right investors is important. Yet, it is always

smart to have the paperwork in your favour as much as
possible, just in case they aren’t the people you thought
they were. Don’t get stuck on that first or next check.
Think big picture. You can bet they are.
This is especially true with convertible debt and what

valuation figures will be based on later.
OPTION POOLS 2
This sets aside the pool of shares which will be available
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for future hires or investors. This might not appear to

be a big deal now. Yet, it can impact valuation and will
certainly factor into the dilution of shares. As the founders
you don’t want to be soaking up all the dilution, without
your investors experiencing the same impact.
3 LIQUIDATION & PARTICIPATION

This clause dictates how much investors and preferred
stockholders are owed before everyone else when the
company is sold. A 1x preference means they get 100%
of their money back before anyone else gets a penny.
Any more than that means they’ll get more than their
investment returned.
Participation rights can also give preferred stockholders

a percentage of any proceeds in an exit on top of the
return of their investment. If you sell for RM10M, and they
have a 1x liquidation preference and 30% participation
rights, then if they invested RM5M, they get that back,
plus another RM1.5M, leaving only RM3.5M for everyone
else to split.
DIVIDENDS
Dividends may or may not accrue. If they accrue from
4
the beginning that money needs to be added to the
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investors’ share of the proceeds in a sale. Be careful

here, and who has the rights to demand when a dividend
payout is right.
5 PROTECTIVE PROVISIONS
One of the most notable protective provisions will be
an anti-dilution clause. Make sure you understand the
rights to dilute stock and the calculation used. You
probably have to elaborate here a bit more.
CONTROLLING RIGHTS 6
You will likely either have a set number of board seats
and appointments or ownership percentages of voting
share classes. The main factor here is whether the
majority of the seats or shares are held by investor
versus founder-friendly shareholders or members. This
will dictate who really gets to make the decisions, and
decides whether you keep your jobs or not.
While you don’t want to give too much away, be aware

that holding too much super-voting power can also be
a major concern for potential investors. Ideally, you’ll
hold enough to protect your values and vision, while
encouraging the maximum amount of investment from
the best participants.
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It is important to note that term sheets are usually not

binding. Ultimately, they act as a summary of the terms
that will be drafted by lawyers in order to close the
financing round.One investing nightmare that tends to
recur is when founders receive a term sheet and think
the deal is done.
They start increasing expenses, thinking the money will

be transferred. I’ve personally witnessed instances where
a founder with a term sheet ended up not closing the
deal, and the founder had to shut down because it was
assumed that the money was already in place. Stay put
until money is in.
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CHAPTER 11
KNOWLEDGE
THAT’S FINE
AND FRESH
Chapter 11: Knowledge that’s Fine and Fresh
NAILING THE
INVESTOR UPDATES
You’ve landed the funding for your startup, now

you’ve got to make the most of it. One of the most
important parts of this is knowing how to write a powerful
investor update. These investor updates can also be
used with potential investors that you are building the
relationship with.
This can be a pivotal part of your startup. It can deliver

one of the best returns on your time and effort, if you do
it right. Otherwise, the opportunity can be completely
wasted.
Here’s some pointers in relation to the providing updates

to your investors, and how you can get more out of it.
WHY SEND INVESTOR UPDATES
There are many reasons to send updates, but some of the

key benefits for you as a founder include the following:
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Staying Visible
At his 10x Conference in Miami, Grant Cardone said

he doesn’t mind how many people delete his constant
emails. At least they keep seeing your name. You are
always at the top of their mind. Don’t you want to stay at
the top of the mind of investors?
Getting Help
You don’t get, if you don’t ask. You don’t close the sale,
unless you ask for the sale. You aren’t closing funding
rounds if you aren’t asking for money.
Building Relationships
If you have kids, you know how that feels. If you don’t yet,
you won’t like it. Constantly be building relationships,
even when you aren’t asking for anything. You’ll then
have plenty of credit and goodwill built up if you do ever
decide to raise or need other input.
Reflecting & Gaining Insights
One of the great reasons to do investor updates is to

gain the time to reflect and gain insights on your own
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business. There is a lot of rushing and hustling in start-up

life. Sometimes it takes slowing down for a moment and
looking at your business on paper from someone else’
perspective to have some eureka moments.
UPDATES FOR CURRENT INVESTORS
The general status quo for entrepreneurs to update

investors seems to be monthly. That’s a reasonable pace
in the off season between funding rounds. It’s a powerful
tool for staying on their radar, passively letting them know
you are working hard and taking care of their money. It
keeps them engaged, and subconsciously anticipating
your next financing round.
In some cases you may go as far out as quarterly, though

consider the advantage of staying as fresh in their mind
as the other competing startups in their portfolio and
who are actively pitching.
With other investors who are actively involved in your

operations you might find weekly updates more desirable.
I see many entrepreneurs making the mistake of only

reaching out to investors when they need to raise more
money. You want to be top of mind and keep them
updated of your progress. This way when you need the
financing is a much easier conversation.
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UPDATES FOR POTENTIAL INVESTORS
Most venture investor recommends adding potential

investors to your list, and “sending out updates every
4-8 weeks”. This is a chance to keep on the radar, attract
interest and followers, encourage introductions, and
setup a great fundraising campaign.
DURING ACTIVE FUNDRAISING PERIODS
How often you send updates during active fundraising

efforts may vary depending on how long you expect the
round to take, and how fast your momentum is. Some
believe you can update every 2-3 days. Weekly, bi-weekly
or monthly may be more efficient. Every time you have
news to share, get it out there.
HOW TO SEND YOUR INVESTOR UPDATES
Investor updates are typically sent via email. Most

investors are heavy email users. It’s an effective medium
where you can get over enough key facts and context to
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get your message across.
There may be exceptions to this. Especially if you are

prospecting to new potential angels. These investors
are most frequently found on LinkedIn and Twitter. So,
entrepreneurs may consider these mediums for some
limited public updates or direct messaging.
WHAT TO SEND IN YOUR INVESTOR UPDATE
Key data you may want to include in your investor updates

may be (and I have elaborated this in the following pages):
New hires; Milestones achieved;

Press coverage; New investors landed;
Remaining runway; New clients signed up;
New products and Your next moves.
services;
Core metrics;
GET MORE OUT OF YOUR INVESTOR UPDATES
Each of your investors are unique. They will vary even

more as you progress through various funding rounds.
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Be sure to be asking for help through your updates.

People enjoy helping others. Your investors will be glad
to see you took the initiative to ask. Besides, it’s their own
investment at stake. Give them a chance to elevate their
returns.
First Round Review suggests to be specifically asking:
Who can make deals happen?

Who can help build the team?
Who can help it grow the right way?
Who can coach and give relevant guidance?
#8 STREAMLINING YOUR INVESTOR UPDATES
As a start-up founder, you have enough to keep you busy

already. Investor updates are important. They can give
you a great ROI on your time. Yet, that doesn’t mean they
should bog you down when you also have to push those
metrics, manage your team and meet with investors.
Creating a template for your business can simplify the

update process, especially for existing investors after
you’ve closed a round. Other updates may be a little
more difficult to use template.
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Outsourcing this to a professional freelance writer is

another alternative. Feed them the stats and milestones
– and let them weave their magic into it.
Don’t overlook and miss out on the incredible value of

regular investor updates. Don’t be too methodical and
dull. These messages can return a lot of additional help
on your journey. Get smart and learn the best practices
and streamline the process to deliver effective updates
that get results, and even help you grow as a leader of
your own business.
THE 2ND MOST UNDERESTIMATED

EMAIL YOU’LL EVER SEND
The initial fundraising process in founders can create

lots of tunnel vision. Then you wake up, and even though
you have more money in the bank this morning, you
notice there’s still a ton of work to do. Money is going to
provide some immediate relief. However, there’s nothing
to do with your balance sheet about the help you need to
grow a business.
You may have also realised that no matter how much you
just received in funding, it’s probably not going to be
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enough fuel to get as far and as big as you want and

need. This is where knowing how to write a great investor
update email makes all the difference in achieving your
real goals or burning out.
The 3 W’s of Investor Updates

Why send them? When should you send updates to your
investors? What should be in these updates?
Why
Typically, VC firms and angel investors have a considerable

stable portfolio of start-ups. If you want the best assistance
that your investors can offer in terms of introductions,
promotion and guidance, you must keep them involved.
If you really want their support, you need to keep their

attention. Beyond asking for money in a crisis, you need
to build relationships if you expect them to support you
and keep working with you over the tough days. Just as
important, you want them to speak well of you, trust you
and be the first to step up and recommend you when it
comes to future fundraising rounds.
Committing to regular investor updates means taking

responsibility for yourself and your team. Whether you’re
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still nursing a hangover from celebrating your latest

fundraising round or putting out new fires and coding
throughout the night, this commitment means that
you need to constantly clock real results. It’s inspiring.
It fuels your venture’s rhythm and momentum. It also
demonstrates your ability to be transparent and execute.
With your diligence, you can wow investors here, even
though the numbers you are reporting are not that
impressive.
Taking the time to update investors also allows you to

stand back and look at your business and think about it
from an external perspective.
When
A quarterly email update is fine, though some

entrepreneurs may wish to update monthly if that is what
the investor is used to. Especially if the company is at an
early stage.
If your contacts will be reporting to others it will typically

be at the end of each quarter and the end of the year.
Giving them some good news to pass on or up the food
chain, and make them look like rock stars will only help
you appear to be a star in their eyes.
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What to Send
A simple email is fine. Keeping the same format and

creating a template to use each month will reduce the
burden on you, look more professional, and will be
more welcome by your investors.
Visuals can be great if they streamline the data

absorption process and save investors time. Though a
simple text email with bullet points, that comes across
as being personal can be just as effective.
With 190 portfolio companies, Pedro Sorrentino of

ONEVC sees 2-3 updates a day. Pedro says those that
are appreciated by investors are “data driven, short,
but engaging”.
8 Things To Include in Investor Updates
Summary of the Last Period
Provide a quick summary of the most recent period

since your last update. Just a few sentences will do.
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Product Launches
Highlight any new product and service

launches since your last update.
Key Hires
Include any new key hires made, their

skills and expertise, the return expected,
and how they will help.
Milestone Achieved
Include any notable milestones achieved. Ideally,

these will be milestones you laid out in your pitch
deck during your last fundraising round. If you don’t
have any, look for key benchmarks in data you can
supplement with to show traction.
Pending Milestones
Update your next milestones and goals so your investors

have an easy benchmark for where you are headed to
next, and something to quote to those they are telling
about your business.
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Items You Need Help With
Probably the most important section in your update.

Hopefully you’ve wisely selected shareholders who can
provide more help than just money.
Don’t be afraid to flex this advantage – but never

needlessly overuse it or abuse. Though, if you fail, they
are going to want to know why you didn’t have the guts
to ask for help before things fell apart.
It’s okay to reveal blunders and hiccups. This displays

transparency and builds trust. Then show how you have
solved it on your own or made adjustments.
Even if you don’t need any desperate help, highlight 1-3

ways the investor can help you get to your next milestones
or exit more swiftly.
Runway
Update investors on your runway. How much money do

you still have in the bank. What’s your burn rate? How
many months do you have left before you need to raise
more money or start turning a serious profit.
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This can help motivate investors to pitch in and help. It

can keep your next round on their radar so they keep
capital available and start spreading the word with
other investor contacts.
If your runway is short you can always include in this

section the first draft of your pitch deck for comments.
Existing investors, and perhaps prospects that you have
included in your newsletter, would provide feedback
and perhaps even come forward and lead your round
if you have engaged them enough with your updates.
Summary of Metrics
Round up key metrics in a few bullet points or easy

to understand graphic. Don’t confuse things with too
many numbers. Keep them focused on the one number
you are really working on improving and are measuring
success by.
Provide supporting data to show improvements in

metrics that will positively impact that key number in
the next update. Or how that one number is positively
water falling into figures they care about. Like paying
customers and cash in the door.
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It might seem like an unimportant (hence, put-off-till-the-

last-minute-able) task – but do not underestimate the
power of news. As in practically any other aspect of life,
communication is key – and the wrong word (which can
even be no word at all) at the wrong time will lose you
battles, friends, and especially money. If you can’t do it
yourself, there are plenty who can for hire. In this instance,
no news is NOT good news.
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CHAPTER 12
3R TALENT
MANAGEMENT
AND ESOP
Chapter 12: 3R Talent Management and ESOP
There are two main questions you want to answer in your

plight to make your start-up successful at get go:
How to recruit, reward,

and retain talents?
How does ESOP dilution affect

the founders and investors?
Nobody was born to know everything let alone be a

genius during a start-up dilution, but at some point and
in some way you will have to learn. One such point is the
notion that start-ups can make you a lot of money. Sounds
easy, right? The picturesque view of “cha-chings” see
you with your start-up, where you get some cash, then
you sell it off for a piece of change and you can start
driving a BMW. Peachy, eh?
It’s just a little more complicated than that. You start

owning your entire business, and if you bootstrap and
don’t offer the staff any shares, you’ll continue to own it
all. But that’s not normal for most tech start-ups these
days, because when you hopefully exit, other people get
a cut from your business along the way. When others get
a cut, it is called dilution, and that’s what we’ll get into, in
detail. Only, we will not only do the basic version, we will
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also learn about the impact of the Employee Share

Option Program (ESOPs) on this’ dilution. You can also
understand how your staff gets rich.
Dilution occurs as shit occurs. You’re going to get diluted

if you raise money, hire staff, engage in M&A, give lawyers
shares when you’ve been broken.
1. WHAT DOES EQUITY DILUTION MEAN?
It means your relative ownership stake in your start-

up is less than it was before, as you have given some
ownership to someone else. So if you sold for RM100m
you don’t get all the RM100m as others want their cut and
a piece of that pie. Every time you have a dilutive event,
everyone who was on your cap table before the dilution
gets an equal opportunity to the shares unless they have
special rights and something bad happens (like a down
round where there is full-ratchet anti-dilution).
The earlier someone joins, or invests in a company, the

more they get diluted as they suffer dilution at every
event. This means you, the founders of a company and
the first owners, are going to take the most dilution.
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2. THINK OF DILUTION AND

OWNERSHIP LIKE A PIE
You own a nice meat pie. It’s yours 100%. But in order
to sell it you need to wait for five years and during that
time, to survive, you have to give a slice of it to others.
You can’t make the pie bigger. It’s fixed and crusty, right?
Your ownership in a company is the same.
Each time an investor invests (for cash), an advisor joins

(for board position) or staff is hired, they all get a slice.
All the slices, including yours, add up to 100%, always.
The best way to think of ownership is in shares and not

just a high-level percentage. If you start with 100 shares
and you give away 10%, then the total ownership still
needs to be the “meaty pie” and add to 100%. That 10%
now is added as new filler to the pie to make it bigger.
Something has to give, and that means you, the founder
needs to get “diluted”. This happens by increasing the
number of shares.
If you own 100 shares then your ownership is calculated

as 100/100 (yours/total). If you give 10% away, that
increases your number of shares by around 11 shares.
With this, your stake is now 100/111, which is 90%.
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So, now we see that giving shares to people is not

free, understand that ESOPs aren’t free either. We are
going to work through a step by step example now with
numbers in detail.
HOW DILUTION WORKS WITH

INVESTMENT AND ESOP
To understand how investment rounds and ESOPs affect

your ownership, let’s create a scenario in the start-up
dilution calculator where you:
Start with 100% ownership;

Then hire some staffs;
Raise a seed round;
Series A;
Series B; and
Create two ESOP pools which are targeted at
10% post each raise.
At each stage, you can see how your ownership decreases

progressively from 100% to 41%.
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A. First hires
It begins. You founded a start-up and own 100% in

common, founder stock. The whole pie.
Next, you need to add some great tech developer to

your team to get product/market fit to be in a position
to do your seed round. Typically you will give 5-10% of
your company to these early, star-eyed staffs. This can be
done in options but often you can use “founders stock”.
We will use 10% for the dilution.
The result: you own 90% of the company and your team
of new engineers collectively own 10%.
B. Seed rounds
Great, the staff kicked ass and you got traction, time to
go raise seed round. You give yourself 6 months to get
the round done, but it only takes you 4 months. You find
and settle on a nice seed-stage fund.
You know these seed stage investors require 10% to

25% of your start-up to make their business model
work. Fortunately, they love you, and with some savvy
negotiation, they invest for 10% equity.
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The result: you own 81% of the company, your engineers

have 9% and the investors have their 10%.
How does the math work? Well, you times the holding
you had before by the ownership position of the
investors. So 90% times 90% is 81% and for staff 90%
times by their 10%, resulting in 9%. Simple, right?
C. Series-A
Fabulous! The seed funders helped you scale up and

now it’s time to put some fuel on the fire. It’s time for
the fabled Series-A. Things are looking up and you’ve
beaten the odds to get here. You had 18 months runway
with your seed, and you planned after 12 months to start
raising to get a full year of execution and 6 months to get
the next round done.
Your seed investors introduce you to TBV Capital who

does multistage from Series-A and beyond. They like you.
TBV negotiate for 20% of your company and demand a
20% ESOP post raise. You show them your hiring plan
and negotiate them down. They now require a smaller
ESOP of 10%.
The value of the ESOP is taken out of the “pre-money

valuation,” which means the dilution from the option
pool is taken before the VC investment and your effective
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pre-money valuation is lower than what you thought, but

hey, you need the cash. Before we look at the series-A
math, let’s look at what needs to happen with the first
ESOP you are going to have to make.
ESOP #1
The investors want a 10% pool post series-A. But you

are not diluted 10%, you are diluted 12.5%! Why? When
the 10% option pool is set up, everyone is diluted
12.5% because the option pool has to be 10% after the
investment, so it is 12.5% before the investment.
So how does the math work? The dilution at series-A

is 20% and the ESOP is 10%. So you divide the 20% by 1
minus the ESOP you need. That rounds up the amount to
the pre-investment of 12.5% amount.
That 12.5% then diluted proportionally against all

shareholders and 12.5% is added to the ESOP line.
Everything adds up to 100%.
The result: So pre the raise but post the ESOP, the
founders now own 70.9% (81% times 87.5%, which is 1
minus the 12.5%), the tech developers own 7.9%, and the
seed 8.8%.
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Series-A math
When the series-A investment closes, everyone is

getting diluted 20% other than the Blue Shirt who are
just getting on your cap table now.
The result: the founders now own 56.7% (70.9% times

80% which is one minus 20%), the engineers own 6.3%,
the seed investors own 7%, blue shirt owns 20% and
there is a post raise ESOP of 10%. This all adds up to
100% again.
D. Series-B
Woo Hoo! You made it to the promised land of Series-B,

you are clearly doing something right! TBV introduce you
to Gobi Partner who decide to do the whole deal for 25%
and need you to top up the ESOP pool to keep it at 10%.
Now the math is a little funkier here in how you calculate

the ESOP and dilution, otherwise, everything is the same
math as before.
ESOP math
Let’s start with how dilution is calculated. The goal is to
have 10% post-investment. But this time you already the
ESOP. That amount of the investment is 10% too, but it
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needs to get diluted. So let’s look at the formula:
You gross up the 10% ESOP you need post raise by dividing
it by 1 less the 25% investor stake.
Then you deduct the ESOP you already have which is 10%.
Now, since the ESOP top up is going to dilute you before

the investment, you also gross up the top up amount by
10%. So the dilution is not 3.33% but 3.67%.
All the shareholders get diluted by 3.67%. You can see

that the original ESOP is now 9.6%. I have added a line
for ESOP number two which splits out the top up amount.
That is 3.7%. If you look at the total ESOP line you can see
that the total ESOP pre-raise equals 13.3%.
Series-B math
Let’s look at the Series-B math now in the start-up dilution

calculator. All the math is the same as we have done before.
You just dilute everyone by 25%. If you look at the ESOP
total line you can see it adds up to 10%.
The result: by the end of all the financing and ESOPs, you
own 41%. You engineers who started with 10% now
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own 4.6%, but of a more valuable company. Your seed

investors are down to 5.1%. The series-A chaps who
started with 20% are now holding 14.5%. The series B
chaps have not been diluted so they own 25% still. Finally,
in total, the ESOP is 10% of your start-up.
Congrats, you have gotten through the dilution and

ESOP math! It’s a lot to take in, but go through the start-
up dilution calculation and you can figure it out. Yes, it’s
boring but you need to learn.
The key takeaway for you here is that there is a direct

effect to the percentage holding each time your start-
up undergoes a dilution from raising money – it is not
free and secondly, that creating ESOPs pre-funding will
cost you and your existing investors, but not the new
investors. That’s why new investors want you to make big
ESOP pools, larger than you will need.
Don’t get too greedy and don’t be too afraid when you
see the percentages shrinking from your initial portion
of the pie. What you need to acknowledge is that the
shrinking percentage holds larger value. For growth to
happen, dilution is a necessity.
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CHAPTER 13
MIND THE
(FUNDING)
GAP
Chapter 13: Mind the (Funding) Gap
HOT 5 THINGS
TO DO WHEN FUNDRAISING
Successful fundraising is more important than most
founders see on the surface. In order to raise the
maximum amount of funding and enjoy the journey
to the top, what vital factors should entrepreneurs be
alert to?
1 Benchmarking Valuations
& Fundraising Rounds
As part of the guidance that we provide to members of
the Inner Circle, where we help entrepreneurs from A to Z
with capital raising efforts, you cannot afford to undersell
yourself and your start-up. Who you apply to, how much
you demand and the terms you accept can make all the
difference in how far your venture makes it and how fast.
In order to understand at what stage direct and indirect

competitors have raised money, founders need to get
their hands on market research. There may also be
significant differences in the amounts committed to each
of their applicants by competing start-up accelerators,
funds raised in additional rounds, and exits. Some offer
an average of RM100k and don’t want to take public
companies. Others start businesses with RM500,000 or
more and have strong sales records for big companies
like Google.
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Knowing the direct and indirect valuation of capital

raised by competitors will help you understand where
you are going. So, if an investor comments on how
high your valuation is, you can always return it to what
the market pays. Having those data points will make it
difficult for ‘questioning’ investors to renegotiate.
The Importance of Being a Great Storyteller 2

Probably there is nothing more important than telling
stories when it comes to launching a successful brand
and raising the money to fuel its growth. Look at Coca-
Cola, Apple, and SpaceX. All of them were built on
stories.
This can be even more critical for tech start-ups and

entrepreneurs who may be geniuses in engineering,
invention and product design, and even coding beautiful
websites, yet need to convey technical features into
tangible benefits and compelling opportunities for non-
geeks.
If you are not a storytelling wizard, then find someone

who is, and willing to help you.
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3 What Failure Looks Like

You have to be willing to fail to jump into a venture
as an entrepreneur. You’re going to do all you can to
avoid that, though. More importantly, you want to be
able to walk through it with your head up high, emotions
in check and pivot or launch something even better,
because you need to know what failure looks like. It’s just
crushing if you don’t factor in the possibility, be ready to
get confused with the reactions of those around you and
don’t have a plan to keep going.
Picking yourself up and keep bulldozing your way

showcases determination and passion. When you’re
viewed in the market as fuelled by passion for a new
idea - angels may want to work with you and VCs are
likely to be all over you. Your passion may spark other
people wanting to wine and dine with you, and the
result is likely a flabby business romance.
As a part of basic due diligence, founders should ask

potential investors for a reference of a founder that failed
and ask that founder how that investor behaved during
tough times. You know, you can fail on Shark Tank, turn
down accelerator programs, and even crash and burn on
your first attempt, yet leverage those interactions into
something even greater endeavours. It depends a lot
on the relationships and people involved. Some will get
hostile, others will see the facts; the flaws in the initial
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venture may be glaring, but there will be some who will

want to see you succeed. They may even invest in you
again after losing money. You just want to know who you
are really dealing with and what to expect upfront.
Individuals vs. VC Firms

Everyone thinks that they want to get funded by big
4
names like Sequoia, Golden Gate Venture, and Soft Bank.
These firms are clearly doing something right. Having
well known investors on your list of previous fundraising
rounds can carry some serious street cred and benefits.
Yet, the individuals you are going to deal with are more
important than the name of the firm you raise from.
If you’ve ever had a credit card, sold a home or financed

one, or even had cell phone services you know how
important this is. You can do business with the best
known brands in the world that advertise attractive deals,
only for everything to fall apart in the service.
A real estate agent with lots of billboards at the best

known company in town may completely fail to sell
your house because they are working with much bigger
clientele who gets all their attention. While a hungry new
agent full of hustle might get the job done a lot faster,
and on much better terms.
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Maybe you had a bank account with Citibank for eight

years, but they turn you down for a business loan due to
a glitch in the system, while another outside broker gets
you an even better line of credit with them through the
same bank’s wholesale channel.
It’s much the same in fundraising for start-ups. The

individuals you deal with are going to determine how
swift things move, how great of a deal you get when it
comes to the term sheet, and how you are treated on
the journey, especially if you have this person on your
board contributing at the top with strategy. Do as much
research on them as you do the company whose name is
on top of the check.
5 Quality vs. Quantity in Investor Meetings
More investor meetings are not directly related to better

financing chances. It’s the wrong metric. Instead of cold
calling or spamming investors’ email inboxes, the goal is
to introduce other founders meaningfully.
Consider checking in with you best peers for reference.

They may know who is best suited to your current
fundraising round, and may have the personal connections
you need. This ‘trusted’ route will also make your
fundraising efforts far more efficient and more enjoyable.
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If you don‘t know where to start, go on Crunchbase

and search for indirect competitors in your space. Their
page will list their investors. Then go on their sites to
review some of their portfolio companies which they
typically list as badges of honour. Once you have
identified the companies, go on LinkedIn to see who
are the founders and reach out for a coffee meet. Ask
the respective founder(s) politely for an introduction to
their investor(s) at the meeting. Founders always like
to pay it forward and this will be the best introduction
that you will get in terms of social proof.
Remember that the best introductions come from

other founders.
Fundraising can be both a fun and exhaustingly

crushing experience that takes you on a long roller
coaster journey of emotional and psychological trauma.
The outcome are naturally most rewarding. The key to
success is to keep going and never let a single ‘NO’
break your entrepreneurial spirit. You already have a
good thing going - trust in your value and get those
investors to invest in you.
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CHAPTER 14
KNOW WHEN
TO HOLD
AND WHEN
TO FOLD
Chapter 14: Know When to Hold and When to Fold
HOW TO CASH OUT

AS AN ENTREPRENEUR
It takes a lot of work and often a lot of sacrifice to

build a start-up. Launching new start-ups and small
businesses today, however, is becoming much easier.
The big question encountered by many entrepreneurs

is how to cash out and recover the value created. This
is likely my favourite question I pose when interviewing
successful entrepreneurs.
HOW MUCH MONEY DO YOU

NEED TO LAUNCH A START-UP
Timing a profitable start-up exit can be associated

with what you put in it. There might be a time when you
want to withdraw some of that built up equity and make
your venture a tangible endeavour and not just a paper
gain entity. Although everyone wants a good return on
their investment, including investors and early founders
- keep your integrity in check, no matter how lucrative
the numbers look like on paper.
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New technological advancements and better strategies

for leaner start-up trends shows that starting a new
business idea has become easier than ever. Although
Inflation is always a factor, it doesn’t have to cost much
to get started with some great creativity, a healthy
dose of resourcefulness, smart growth hacking and
fundraising knowledge.
For as little as US$1,000, many of today’s biggest

successes such as Facebook have been launched.
Most entrepreneurs will, of course, find that they need
significantly more. Some may even need more than
US$400,000 if their development is costly.
Don’t forget to factor your time investment too. You may

be leaving a high paying salary job or putting in a lot of
extra hours without pay to get this new venture going.
Time is money. Assign a value to it.
Your options for cashing out as an entrepreneur are

going to depend a lot on the traction of your business
and your data. Some of the strategic options that lead
to cashing out might also be expected by potential
investors and something that founders could include as
part of their pitch deck.
173
WHAT TO DO
WHEN CASHING OUT
Below are some of the strategies that you could use to

cash out as an entrepreneur:
Sell Off Your Assets
When you have a small business, the option to cash out

can be to simply sell off your assets. This may become
the only option for some who find their business plans
running into a wall, and they’ve just become tired and
want to call it quits or are wanting to exit in difficult
economic times.
This includes selling off equipment, real estate, and

even intellectual property assets, accounts receivable
and contracts.
Go IPO
For a long time the traditional path to the big money

from launching a start-up business was to take it public
with an IPO. Harvard Business Review points out that
174
the conventional algorithm for this exit plan was that “

a company needs around $100 million of annualized
revenue and a couple of consecutive profitable quarters.”
Of course, the tech era and recent string of big start-

ups that have gone public while still losing massive
amounts of money has changed those principles. At least
temporarily. More and more investors and founders are
also seeking alternative exits and strategies.
Sell the Company
An increasingly likely exit plan today is to be bought

out and/or be acquired by a larger company. This may
be a part of their growth strategy to improve their own
numbers - Facebook being one of the better example
when they bought over Instagram. Or it could be to
another start-up who is bundling multiple companies
together for a larger acquisition. You may have the option
to stay on as an executive or consultant to help ensure
there is a smooth transition. But, this can be a lengthy
process which can take months and involve intensive
due diligence.
Another alternative to the traditional sale is to sell the

company to the employees, or to sell out your stake to
your founding partners.
175
Secondary Sale
Another option is to sell some of your equity ownership

to new investors in a subsequent round of equity
financing at an agreed price. Some founders incentivize
new investors to acquire their stock by giving a discount
on their shares.
This option is becoming increasingly popular in the

venture space. Especially for financing cycles that range
from Series B to Series D.
Raise Debt
Some entrepreneurs who have already cashed out using

the above methods are now trying to reverse engineer
the process. They don’t see the company they cared so
much about going in the right direction anymore. They
want to bring it back.
In this scenario, you can potentially raise debt financing

and buy back the shares of your company, regain
ownership and control, and get back to the mission that
inspired you in the first place. Often without the exterior
pressures, which may sacrificed what is most dear to you.
176
Turn a Profit
While most businesses are focused on hyper-growth

today, the alternative is to simply prioritize profit. Start
generating real revenues, and real net profits each
quarter. You may then give yourself a raise, and perhaps
some nice end of year bonuses.
With any reasonable sized operation, most entrepreneurs

today will find that they can relatively easily recoup and
cash out any initial investment they made. Recapitalise,
pay off those credit cards, take your first supporters out
to dinner, and keep pushing the company forward while
retaining more control.
It may not be the most conventional approach today,

but you may actually find that it puts you in a much
better position to attract investment and buyout offers.
Especially as the dynamics of the market changes.
There are a variety of ways to cash out as an entrepreneur.

The earlier you plan for your exit, the more prepared
and more profitable it will be. Pay attention to market
movements, trends and especially how today’s most
successful entrepreneurs have cashed out and win big.
177
Get their advice. Ask them what advice would they give
their younger selves, knowing what they know now, if
they had to do it over again.
Don’t be afraid to take giant steps when things are not

going your way and feel free to release your “baby” even
if it may, at the start, be hard for you to let go. Remember
that business owners are unattached and entrepreneurs
are always up for the next challenge.
178
CHAPTER 15
INVESTOR
BULLSEYE
Chapter 15: Investor Bullseye
Be strategic and build an investors list that is targeted.

But, where do you get the list? Where do you start
looking? Who should be on your list? Once completed,
what are you going to do with the list of targeted
investors?
THE IMPORTANCE OF PROSPECTING

TARGETED INVESTORS
Planning to pitch, first, requires you to have an audience.

So, a targeted prospective target list allows you to plan
based on the prospective investor on your list. Being
strategic in inviting your audience to pitch opens to less
“no”s and the flow of accessing funding may likely move
faster.
The ROI on time becomes far more efficient when your

list of investors are targeted. This is extremely important
because fundraising should constitute a small part of your
job description as a start-up founder. The necessity of
this list becomes glaringly important especially when you
are in between rounds and the runaway for capital gets
shorter with time. So, the sooner this list is assembled,
the more time you get to cultivate relationships with
these investors so that when you design those decks for
each pitch, the questions that come your way will become
easier to overcome.
180
Keep your decks short and sweet, between 15 to 20

slides, because nobody has the time nor patience to
listen to your lifetime tale. Get straight to the point -
narrow down your requests to the interest of the audience
in front of you. Rest assured if your initial relationship
building is successful, your potential investor will request
for your pitch deck. Make sure the content of your pitch is
tweaked to your audience investment preference so your
opportunity is open wide.
TYPES OF INVESTORS
TO ADD TO YOUR LIST
Every fundraising round will involve different types of

investors. Don’t hold back on collecting contacts for
future rounds. Your next campaign will creep on you
faster than you think.
Your list should include but not limited to:
Friends and family Venture capital firms
Angel investors Family offices
Angel groups Corporate investors
181
FINDING THE RIGHT

INVESTORS FOR YOUR LIST
Building this type of list is not about volume and scaling to

the largest list. It’s about targeting the right investors who
are not only the most likely to fund your start-up, but also
the most desirable investors for your business. They need
to be the ones who are going to bring the most value.
Finding the right fit includes the following criteria:
Industry
Some funders are very ambiguous about their preferred

sectors for investments. Some may position themselves
based on other relevant factors based on individual
preference or simply focused on stage funding. Knowledge
on their focus and areas of preferred specialization can
also bring a lot of added value to creating your list.
However, don’t be too excited to add them to your list
before confirming that they are willing to fund your type
of start-up.
182
Location
Location is still important. Some VCs and accelerators

will expect you to be closer to them or they might give
local start-ups preference. Depending on proximity, the
amount of help and support you receive may also vary.
Proximity can avoid you from experiencing stress and

loss of precious time borne from unnecessary and
frequent meetings in your future fundraising rounds or
an exit. Start-up valuations can also vary significantly
from location to location. It is likely that your start-up, if in
Singapore or Greater China, may receive a much higher
valuation than in Malaysia, Myanmar or Cambodia.
Cheque Sizes
Better an investor with deep pockets and cashflow that

those calculating their cheque books when assessing
their investment potential portfolios. There’s little point
in pitching to investors who can’t deliver on your needs.
Look out for investors who are willing invest in you
and allocate far more capital to you start-up in earlier
rounds, whether or not you qualify or have the need.
This will also affect the data that you are expected to
show and the amount of due diligence that you will have
to conduct to survive.
183
Personality & Vision
For a business partnership to succeed, it is important that

all players are on the same page with the same goals.
Money will lack lustre when relationships turn sour. You
want to make sure that your strike a sound relationship
and manage expectations upfront with your investors
so the journey is a dream and not a nightmare. Make
agreements so that you can get along with your funder
and partner, share your vision, and understand the
entrepreneur’s journey and start-up set up from get go.
Do not assume that there will be a seamless match and

process due to their size or volume of experience. It can
be very predatory for some VCs. Many new entrants
to corporate investors are still trying to smooth their
personal integration processes.
What They Can Do for You
Experienced entrepreneurs know that the least value

they will get from good investors is money. If you have a
promising start-up that proves to works, the money will
come. So, be aware of who you are taking it from. Search
for experience, advice, links, scale, and other benefits.
Which investor can best take you to the next milestone
from this round.
184
Track Record
What is their track record in treating their founders? What

about their willingness to participate in all following
financing rounds? Is there a successful exit plan? Ask the
prospected investor for an introduction to a founder of
their portfolio that recently failed. That would give you
a good idea of how they behaved during difficult times.
Timeline
Will these investors likely be flushed with capital when it

comes to your next round? Will they have enough timeline
cushion to enable you to make the best decisions and
deliver the best service through your start-up? Or will
their own interests and limitations put too much pressure
on your venture?
One of the pieces of advice that I keep hearing from

founders is that you need to be very careful with the
expectations concerning the life of the fund of the VCs
that you are looking to onboard. You want to avoid the
situation of having the VCs pressuring you to do an
acquisition because they need to return the capital to
their own investors (also known as Limited Partners).
185
BUILDING
YOUR LIST
Get as much information as you can when it comes to

building a list of investors. Compile everything for easy of
reference in a database.
Get email addresses, handles of social media, phone

numbers, and even addresses. To reduce your burden
and become more timely, set up your email updates to
be as automated as possible.
Where do you get all this information?
Networking with other founders;

Startup accelerators;
Sites like Crunchbase or CB Insights;
Lists of active angels and VCs.
Building a targeted list of potential investors can

bring a lot of fundraising efforts efficiency and
benefits. Finding and shortlisting them may also help
you gain more clarity about your business and where
you’re going. Use this content to begin finding the
perfect investors for your next round of funding and
then start building those relationships.
186
THE LAST WORD
THE BULLSEYE STRATEGY TO RAISING CAPITAL isn’t

just a catchy title, it’s a call to action and a declaration
of opportunity. While the primary goal of this book has
been about providing you with the knowledge and
insights you need to successfully fundraise, it’s greater
purpose is much more profound than that.
Like all the big things in life, a pitch seems hard when
you’re worried about at its onset, but it falls into place as
soon as you start to deal with it. Begin by understanding
how crucial the pitch is. In life’s transaction, the pitch is
where decisions are made.
Clearly, who you pick as your investor is absolutely

critical to your success. It will make or break you. There
is a host of factors that can be part of a strong checklist
for vetting potential investors in your business. Keep
this in mind when tackling due diligence, engaging in
investor meetings, preparing questions, and learning
how to read people.
Don’t just settle for money. Look at what else an

investor can add value to your venture. This doesn’t
mean investors are going to come in and take over your
business. But perhaps they can lend their experience to
THE LAST WORD
help you make traction. Sometimes all it takes is a few

tweaks you hadn’t thought of. What’s offered could be
business-related in general, industry-specific expertise,
or, simply funding and the financial aspects of your
venture.
Ask what expertise this capital source brings to the table

that makes him or her more valuable to you than the
next one in line.
Good Luck.
NOTE
Disclaimer
The information is solely the thoughts, expression and experiences of the author.
The publisher, author and editor hereby expressly disclaim all any liability to any
person using the information in this book as a basis for making decisions or taking
action. The author advises to always seek after appropriate medical professional.
THE BULLSEYE STRATEGY
TO RAISING CAPITAL
Author ANDREW TAN
Production Director NG SHI HAO
Production Manager WILLSON GOH
Editor/Proofreader SYIREEN R
Art Editor NG WEN JUN, NGOH JIN HENG
Publisher HEDKI HENG

Published by SOMO PUBLISHING
N-1-3A, Pusat Perdagangan
Kuchai, Jalan 1/127, Off Jalan
Kuchai Lama 58200,
Kuala Lumpur Malaysia.
Contact +6016 - 212 7245
Fax +606 - 335 3344
Email online.somo@gmail.com
Website www.somopublishing.com
Edition OCTOBER 2019
Price RM 49.00
ISBN 978-967-0980-22-5
All rights reserved. No part of this book may be reproduced, translated, stored in a retrial
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without the prior permission of the copyright owner.
Perpustakaan Negara Malaysia Cataloguing-in-Publication Data

Tan, Andrew Yan Hoang, 1981 -
THE BULLSEYE : STRATEGY TO RAISING CAPITAL / ANDREW TAN.
ISBN 978-967-0980-22-5
1. Venture capital.
2. New business enterprises--Finance.
I. Title.
332.6322

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“First impression matters and no one knows that

better than Andrew.

He is a person who meets so many entrepreneurs

Do not try to pull a fast one with Andrew; he knows

I have faith that Andrew, through this book, aims

Dato’ Dr Michael Tio, PKT Logistics Group Sdn Bhd

Koichi Saito, Founder of KK Fund

“Andrew is the real deal, a no-nonsense kind of person

Juliana JAN - Chief Investment Officer Cradle

Andrew Tan is a Serial Entrepreneur,

He returned to Malaysia thereafter, took 2 companies

This book is written to share my personal experience

If you want to learn how to master fundraising and make

If you want to learn how to systematically increase

I want to share with you how you can get immediate

By building these models and projections, you will

Let’s get started.

The age of entrepreneurship is upon us. We are now

However, it takes more than hunger and desire to achieve

Based on available data, more than half of small

The greatest hurdle standing in the way of the first-time

know-how: tangible information and experience about

True, starting your own business can sometimes be

Is entrepreneurship the right choice for you? Do your

Next, you will learn how to turn concepts into a

Launching a business is an adventure that begins with

perhaps you’ve already started your business and are

Today, the entrepreneur has become the very

THAT IMPORTANT FIRST STEP

Before you can begin building the next great company,

1 What kind of business

3 Am I willing to invest the time and

fool yourself into thinking that you’ll start a business

What skills or training must I acquire

5 What happens if my business fails?

Still interested? Yes? Then let’s move on.

ARE YOU READY FOR THIS

While these types of questions are not easy to ask, their

Until the last twenty years or so, entrepreneurs were

Still, much misinformation exists about what it takes to

others say you need to be extremely sensitive to

So what exactly are these myths? Much of the confusion

Sorry – but the only way to guarantee that you will

“ Know Your Strengths

Identifying this information will help you make essential

some people excel at this type of exercise, others may

This process is valuable because it determines

Below you’ll find a breakdown of the Five Essential

A great business starts with a great concept. Are you

Having an idea is great, but having a plan is crucial.

Organization is important to all businesses, but –

You can have the greatest business in the world – but if

you do your best work when speaking, writing, or

A plan is essential to success – but only if it’s properly

While going through these phases, use the categories

Of course, you will have more strengths and weaknesses

few moments to make your own comprehensive list.

Once you have developed a list of your strengths and

“Most people believe you need to be a well-

Now that you have a good idea about starting a business

There will be moments – plenty of them in fact – of

When you decide to become an entrepreneur, you enter

Where you came from, no