With the extension of the National Research Foundation’s Technology Incubator Scheme (NRF-TIS), eight new incubator-funds have emerged last year. Among them is TNF Ventures (TNFV), which held an official launch last Friday.

The fund is founded by several veterans, consisting of a good mix of entrepreneurs, senior corporate executives and venture capitalists, mostly in the IT industry.

Specifically, the team members include Eddie Chau, founder of E-Cop and Brandtology, Shirley Wong and Steve Ting, both co-founders of the public listed BT Frontline, Tan Yen Yen, senior VP of Oracle, as well as David Su, Foo Jixun and Terence Tan, who are managing partners of their respective VC funds Matrix Partners, GGV and IPV Capital, all based in Shanghai.

Calling themselves investor-mentors (IMs), the partners of TNFV have vast experiences in building or nurturing companies from their infancy to success.  Taking the reigns to lead this stellar team is managing partner, Shirley Wong.

“We aim to to nurture the next generation of successful entrepreneurs. The by-product? To have wealth creation and job creation,” she says.

(More photos of the event on SGE’s Facebook Page)

TNFV stands out with its sizeable network of IMs. As the managing partner, Shirley will assign two IMs with the relevant expertise and experiences to each startup.

As a team, the IMs review their operations on a weekly basis, providing a platform to enlist any additional help from the other mentors.

As an NRF-TIS incubator, TNFV will invest up to S$600k per startup be it seed or Series A funding. It is seeking startups in the telecommunications, media, medical, and eco-related industries.

Staying true to its mantra of having fun, TNFV ended the day with a group of start-ups, who were pre-selected from a pool, playing poker.

The top three startups from the tournament won an exclusive dinner with the TNF Team to further fine-tune their pitch for potential funding.

For a hint of how the game went, even a pair of Aces (picture) could not win the game — a close semblance to reality where having the best team and idea may not be enough to make a successful start-up.

We’ve got to deal with market environment too.

Started in February, the fund is a collaboration between KDDI, a major Japanese telecoms operator, and Global Brain, a VC firm. The fund will invest in companies in Asia, Japan, and the United States, providing not just funding but also service development, platform for cloud services, and promotional initiatives.

Global Brain sees Singapore as a center of their upcoming activities in Asia, having already partnered with the NUS Entrepreneurship Centre. They have been managing several corporate venture capital funds for 11 years.

Startups can apply for the fund through the Global Brain website.

Andreessen Horowitz recently revealed that its investment of US$250K in Instagram became $78 million. Thats a multiple of 312. Investing in early stage ventures is indeed very rewarding yet inherently risky. It thrives on multiple high risk bets out of which one or more would achieve high rewards.

But that certainly does not mean putting blind bets on anything that comes your way. Those who believe in “Spray and Pray” kind of investing are often losers in the long term.

Most VCs through their experience would have developed some sort of an internal braincloud (mental) checklist which gets ticked during the pitching sessions. Relying on mental checklists again is risky. Some or more of those check points might get sidelined if the idea falls into one of the soft spots of the more influential team members.

So how can venture capital funds systematically mitigate undue risks?

Here is a list of risks inherent in Venture investing along with practical risk mitigation strategies and if needed a ‘Jugaad’. Jugaad is a colloquial Indian term that means a creative idea, or a quick workaround to get through commercial, logistic or law issues.

1. Risk of the unknowns

Most people think a business is after all a business whether it is hi-tech or low-tech. If it makes money, why shouldn’t one be part of it? Some argue that if one understands the need of such a product/service, one qualifies to invest.

But most would forget that it takes a lot more for a venture to succeed than just a great idea. The devil is always in the details and in execution. If you come from an e-commerce background and are offered an opportunity to invest in an orthopedic surgical device, think twice.

How would you figure out what is the right amount of field trials you need to carry out before pitching it to potential acquirers? What makes more sense – licensing the technology to an existing player or go solo?

Mitigation: Invest ONLY in areas where Fund Managers have some domain knowledge.

Jugaad: If you are excited to support an idea where the investment team does not have relevant expertise, the fund management should think about appointing an advisor who knows that domain and is willing to work closely with one of the investment team members.

2. Risk of working remotely

This is something I have learnt from my own and my partner’s experience. I am a firm believer in technology and remote working when it comes to Shared Service Environments in large multinational companies where job descriptions are clearly laid out and roles are well defined.

However, it just doesn’t work in a startup environment with the founding team sitting in a different time zone. Having a development center alone in a different time zone can create headaches and delays.

Mitigation: Invest LOCAL.

Jugaad: Appoint local advisors as representatives and enhance corporate governance measures by inviting -local independent directors to the board.

3. Risk of founder’s fatigue

Starting up is hard enough. Doing it alone makes it even harder. What would you do if the key founder throws in the towel? It is indeed very difficult for a startup to find a CEO material to pick up and run the company.

Mitigation: Invest in TEAMs not Individuals. Also, test individuals in the team by offering them less salaries than their expectations. This would be a small test for them to prove that salary is not their motivation and they understand the big common goal.

Jugaad: If the founder has a prior track record, that can be viewed favorably.

4. Risk of running out of cash

Most startups before getting proper funding are in bootstrapping mode. Spending is conservative and revenue prediction is optimistic. Who hasn’t seen those hockey sticks and the great magic of excel?

But as soon as they get investor funding, startups tend to shift modes. They think more like a real company with real overheads.There is nothing wrong with that except the fact that monthly burns suddenly shoot up to such an extent that there is not enough time left to pivot. If the idea spreads virally, it works. Otherwise, founders are happy to treat this as a learning opportunity on the scholarship provided by VCs.

Mitigation: Assess how much cash is required as per the most reasonable forecast. Multiply outflows by 1.5 and inflows by 0.5. Scott Anthony says: “It always takes longer and it always costs more.” Fund the company with at least 20% more than the number you arrive at. An early stage company needs at least 18 months runway.

Jugaad: Syndicate with someone who can do follow on investments. You are going to need that money whether the company does well or not.

5. Risk of post marital blues

It is very common to have disagreements whether it is among co-founders or between founders and investors. Being humans, conflicts are inevitable. Most of the time people manage to settle these issues with a little give and take. But there are instances where there are gridlocks and relationships become so sour that the parties can’t even stand each other.

Mitigation: Investment lead should be identified and allocated to the investment opportunity even before the first pitch. This person, through the course of due diligence, must pose some difficult questions in front of the team and observe the team’s reaction. If the team shows any signs of arrogance or denial, this must be looked into greater detail.

Jugaad: None. Stay away if you see such early signs.

I sincerely believe that there really is a science to nurturing successful startups, and that it has to do with methodically knocking down risks to get to the rewards.

Photo: Images_of_Money

About the author

Piyush Chaplot works with Innosight Ventures as VP-Finance & Investments. His current role is to source, evaluate, structure, monitor, and manage early stage investments in Singapore. He serves on the Board of www.chope.com.sg and also acts as part time CFO for some of the other investee companies. Additionally, he manages the finance and compliance functions within the Innosight Ventures group. He has more than 10 years of experience in financial and risk management roles in India, Indonesia, Australia, UAE and Singapore. Piyush is a member of the Institute of Chartered Accountants of India, CPA Australia and CPA Singapore. He holds a Masters of Commerce degree from M.D.S. University in Ajmer, India. He is also a Certified Internal Auditor (CIA).

Edgar was formerly the vice-president of strategic investments for Singtel, overseeing the company’s M&A activities.

Yvonne had been Innov8′s CEO since its inception in 2010. She will be moving on to retirement.

Innov8 manages a fund size of S$200M (US$158M), investing in technologies in the fields of network capabilities, next generation devices, digital content services, and customer service enhancers.

Its portfolio includes Bubble Motion, Stream Media, ViVOtech, and 2359 Media.

Innov8 provides ventures with access to SingTel Group’s mobile customer base in both developed and emerging markets in 25 countries and enterprise customers through its network of 36 offices in 19 countries and territories throughout Asia Pacific, Europe and the USA.

In addition, the SingTel Group’s assets, including subject matter experts and infrastructure are available to any venture it invests in.

Christian Besler, the incubator’s vice-president and community engagement head, bills Kickstart as “the only Incubator in the Philippines with existing strong ties to the local grassroot community.”

Explaining this, he says that Kickstart was part of the team that organized last year’s StartupWeekend Manila, the first such event in the country.

They received feedback from the startup community that there was hardly any local support network and access to funding from Filipino entrepreneurs were limited.

“The outcome of the 2011 Startup Weekend event was pretty overwhelming and led to the decision to build an institution capable of funding and mentoring emerging startups and founders,” he says.

The situation is slowly changing. Another incubator, IdeaSpace, launched in the country at around the same time as Kickstart, and aims to “jumpstart the creation of a Silicon Valley-like ecosystem in the Philippines”.

Other accelerators  and incubators that have started recently include Wireless Wings, and Launchgarage.

For Kickstart, they are planning to invest about 10M Pesos (US$250K) per startup, with exceptions made if warranted. They are starting off with 100M Pesos (US$2.5M) in deployable funds.

Startups are encouraged but not required to stay on premises, but that would depend on its stage of development and specific needs. Kickstart will also not focus on a particular set of industries, but “ rather on innovative and maybe also disruptive mobile and web solutions.”

The incubator is open to citizens and non-citizens alike, although they must be based in the country.

Lofty's landing page.

Roomorama, a Singapore-based vacations rental site, has merged with Lofty, a similar service, to scale up their business, reported TechCrunch.

They’ve also secured US$2.1M in seed funding from individuals like Jose Marin and venture capital firms PROFounders, Lerer Media, and Thrive Capital.

Lofty will be folded into Roomorama’s existing platform, with their B2B sales and management team transferred over but not their technical side.

Roomorama co-founder Jia En Teo will become co-COO with Brion Olivier, previously Lofty’s CEO.

Both sites have merged because they complement each other. For starters, both sites are focused on the middle to high-end travel market.

And while Roomorama has customers but lacks inventory, Lofty has inventory but lacks customers. Finally, both companies’ businesses focuses on different regions. Roomorama’s activities are primarily concentrated in Asia, while Lofty’s business is concentrated in the West: A third in the United States and another third in Europe.

At the moment, Roomorama’s  average gross booking value is US$1,300, with 80 percent of bookings between eight and 14 days. They have about 50,000 listed properties in about 3,600 locations.

The company aims to double their properties by 2012, while keeping their focus on high quality accommodation, reliability, and closing transactions quickly.

Roomorama was founded in 2009, just five months after Airbnb. Last year, they’ve set up operations in Singapore with the aim of expanding to the rest of Asia.

Unlike Airbnb, Roomorama focuses more on the high-end market, and relies more on rental market professionals to supply accommodations.

They also have a perks program for travelers visiting certain locations, as well as a series of websites called How Not To Be A Tourist that supplies useful local information for tourists.

When: Wednesday-Saturday, 23-26th May 2012
Where: JW Marriott Kuala Lumpur, Malaysia [map]

Info on packages and registration.

You might also want to read an overview of angel investing in Singapore.

To qualify, applicants must be passionate about building a technology company, regardless of whether they have started their enterprise.

The program supports a wide range of technology industries: Digital media, software, biotech, cleantech, ecommerce, advertising, consumer electronics, and more.

The Founder Institute is a pre-idea startup program where people with entrepreneurial traits are selected to attend (more stories on FI here). Applicants do not need to have an idea or a startup initially to get in.

Applicants will be invited to take a Predictive Admissions Test, which aims to identify entrepreneurial traits. If accepted, Singapore citizens and permanent residents will pay a subsidized course fee of S$600 (US$475).

Foreigners have to fork out the full amount, but the Institute will be giving out five scholarships worth S$500 each (US$400).

FI was set up by Adeo Ressi, who’s also the founder of TheFunded.com, an infomation site on fundraising.

Previously only available in the US, FI has expanded its program internationally in collaboration with local partners. The man who started the Singapore Chapter is Jeffrey Paine, who is also a full-time mentor at Golden Gate Ventures, a Silicon Valley linked incubator.

Deadline for application is 8th April, 2012. The program will start from 27th May and last until 16th August 2012. Promising entrepreneurs will be introduced to investors who may potentially fund the company.

To apply, click here.

The eight incubators are: Get2Volume, Golden Gate Venture Investments, Incuvest, Jungle Ventures, Red Dot Ventures, The Biofactory, The Network Fund (TNF), and WaveMaker Labs. Full details in the press release.

Under TIS, the NRF will co-fund up to 85 percent of total investment per company, or up to S$500k (US$400k), with the rest topped up by the venture firm. Only Singapore-based startups need apply.

The incubators can choose to buy out NRF’s equity share within three years of investment, at a price of 1.1 times capital in the first two years, and 1.15 times capital in year three.

Born in 2006, the NRF dictates the country’s direction for R&D by developing national policies and planning strategies for innovation, enterprise, and research.

Fuller descriptions of the eight incubators follow:

Golden Gate Ventures — It is an early stage incubator based in Singapore helping internet startups build and launch successful companies across Southeast Asia. GGV’s founding partners share a rich background building successful Silicon Valley startups and managing investments in Silicon Valley and Asia. Read our article on their launch.

Jungle Ventures —  Jungle makes seed to early Series A investments across Asia Pacific and also operates an early stage accelerator in Singapore. Startups through the seed fund accelerator can look to get: S$50-500K in startup funding, co-investment by 500Startups, a leading SV based fund, and more. Articles on Jungle Ventures.

IncuVest — It has experience starting, building, operating and creating valuable companies. Their interest to mentor early stage and startup companies, invest and create value through our investment ecosystem is supported by this experience and their extensive network of global business contacts, angel and venture capital, and corporate backgrounds. Their focus is in the ICT space, specifically in eCommerce, social media, mobile, payments, big data, and business analytics in the financial services, lifestyle and healthcare verticals.

The Network Fund — TNF is founded by a group of high profile ICT industry veterans who brings extensive experience in founding and mentoring startups, have guided and helped companies in business strategy execution, go-to-market, trade sales and even IPO.

Red Dot Ventures – It is an early stage technology incubator founded by Leslie Loh, an accomplished serial entrepreneur in Singapore. Together with their qualified pool of angel investors and corporate partners, they help startups succeed by providing a supporting ecosystem that includes seed financing, comprehensive mentoring, go-to-market platforms and entrepreneurial talent development.

Get2Volume Accelerator — It focuses on innovative semiconductor and microelectronics emerging growth companies. Successful semiconductor and microelectronics companies are global from day one. Get2Volume brings global capabilities, capital and connections to enable emerging growth company success.

The Biofactory — It is a biomedical incubator located at Singapore Polytechnic, aims to create successful biomedical product companies from Singapore-developed technologies.

WaveMaker Labs — It will incubate digital media, technology and technology-enabled services start-ups that will use Singapore as a launch pad to address markets across Southeast Asia, India and North America.