Women in venture's tips on being good investors and what they are looking for

2021-01-11 |
Women in venture's tips on being good investors and what they are looking for

Eight female investors gathered in a woman-speakers-only forum, powered by Anchor Taiwan, to share the challenges they encountered as an investor and their advice for female investors to navigate through the male-dominated industry and for startup founders to secure fundings.

Raising entrepreneurs as baby sharks, not poodles

To become a good investor, Cinnie Huang from ITIC said one has to be able to bring in all the resources for the founders and also allow them to fail.

“We are not raising poodles, we are raising baby sharks,” Huang said.

The first panel in Woman in Venture event was about "How to Not Miss Out on the Next Billion Dollar Opportunity?" and the speakers were Cinnie Huang from ITIC, Tanna Yang from CTBC, Lisa Lo from CID Group and Lucia Liao from GadgeTek (Acer Group)
Anchor Taiwan

She cited that her previous experience as a product manager had helped her quickly spot all the potential pitfalls founders are going to make. While speed and delivery are fundamental in the startup world, she said an investor ought to give founders space to test out their hypothesis and learn from both the success and failure.

Tanna Yang from CTBC group, who was also a product manager before, agreed the work experience had become an advantage for her to grow her investment portfolio.

“As investors, we need to ask the right questions, for example, whether the founder is the right person to lead the team,” she said. Lisa Lo, partner of CID group, added timing is also important, in addition to giving the right advice.

Three panelists listed gender differences and cultural shock as some of the challenges they had encountered.

“Being a venture capitalist, we need to see every challenge as a positivity,” Lo said.

“We should be doing what is right, instead of doing what is expected. Sometimes we may try to partition ourselves into a female or non-female thing to do but we shouldn’t do that. Only flash drives need partitioning,” Huang said.

Yang said they are always looking for founders that are already thinking through all the journeys in the upcoming five to ten years.

“Our first questions usually are: Why do you want our money? Why do you want to be our partner?” she said.

Huang advised startups to look for an investor that resonates with them.
“Looking for an investor should be like looking for your future spouse. You are not looking for someone that is the richest or has the biggest muscles. It should be about whether he understands your vision, whether you can communicate with him and trust him, and whether he has the integrity you value,” Huang said.

Common mistake and what should an investor do
Sunshene Tsou from Taiwania Capital, Angela Liu from Cherubic Ventures, and Cathy Hwang from Zumaya Equity, further elaborated the essence of an investor.

The panel on "Drive Greater ROI Across your Portfolio" featured the 4 speakers, Angela Liu from Cherubic Ventures, Sunshene Tsou from Taiwania Capital, Cathy Hwang from Zumaya Equity and Angela Liu from Cherubic Ventures. (from right on)
Anchor Taiwan

To score a highly sought-after deal, Tsou said flaunting capital is not the key to winning. Alternatively, investors need to show the startup their “true value.” Hwang added the role of venture capital or private equity is similar to a salesperson’s, so investors need to think about their value-added in order to stand out from their competitors.

Liu said the next thing to do after making an investment is to help the founders find the next investors and secure their Series B fundings.

“My experience is that most of the funding processes are painful. There are a lot of back and forth introductions, inquiries, and rejections. What we can do is to leverage all of our networks to help them secure any kind of investors that might be suitable for their portfolio. Of course, luck is also an important factor in all investment, “ Liu said.

“You have to trust your founders. Once you bet on them, you have to trust them and help them cope with all the troubles. You have to try all the means you can get to help them survive the most painful part.”

One of the common mistakes founders or CEOs make is the lack of focus, as cited by Liu and Hwang, and it is an investor’s job to help them bring back the focus.

“Founders tend to be dreamers and pathbreakers. They are very creative. It is easy for them to be distracted by other things, for example, attending useless events or PR sessions. As an investor, it is essential to drag them back to the track. We need to make sure they are always pushing their products and delivering the next version of the product because only users can give them feedback, which decides whether the company will succeed.

Tsou added that many founders or CEOs try to do everything by themselves. They are smart but they don’t know how to delegate responsibilities to the people they hiring. Investors should be supportive and remind founders if such a situation occurs.

Hwang pointed out another form of ‘lack of focus’ as the incompetence of identifying their customer base.

“There aren’t too many levers for startups to survive. Either they grow revenue or cut expenses. Founders who are successful at securing venture funding typically are those who know who their customers are exactly and have a concrete plan to go after them,” Hwang said.

Learn to embrace uncertainties and write your own success

The last panel was "How to Find Your Edge and Turn Adversity into Advantage," featuring the talks from Susan Wu, an angel investor, and Laura Huang, the author of Edge and Harvard Business School professor.
Anchor Taiwan

At a time of uncertainties like the present, Laura Huang, associate professor at Harvard Business School reflected that innovation should be coming out of it but most people sort of follow what other people are doing.

“We always put pressure on ourselves to seize the uncertainties as it is an opportunity. When it comes to uncertainties, a lot of us go for average. However, being comfortable with uncomfortable is how you deal with uncertainties and complexity. It is a superpower,” she said.

“We often heard in forums or conferences, ‘What do we want to do with our lives?’ The question should really be: Who do we want to become in our lives? I am comfortable with risk and complexity so I know I should really lean into it. My investment strategy is to go big or go home,” Susan Wu, angel investor who had grown up in an ever changing environment, said.

Wu reminded investors that there are so many ways to succeed as an investor in the startup ecosystem.

She observed that successful venture capital stories and people profiles circulating online and offline, for example, The Forbes Midas List, are homogenous. These content, curated by a rich and powerful male-dominated social circle which she called “power bros”, always aims to tell readers what venture capital success should look like. From her experience, she knows successful venture capitalists who stay out of the spotlight and do not follow the narratives set by the clique.

“There are a lot of different ways we can be writing our own stories. You can be a successful investor without having to be part of the power bros,” she said.

〔Original :Meet Startup @ TW〕https://meet.bnext.com.tw/intl/articles/view/47197