Should investors bet on the horse or jockey?

By Piyush Chaplot, venture capitalist

Besides the usual screening process, every investor I have met so far also has an unwritten methodology known as the “gut feel”. It is difficult to admit but investing is as much an art as it is a science. Partners of the same firm who would follow the same technicals sometimes differ from each other when taking an investment decision.

What exactly is that gut feel? I think it is the Big Data analytics derived by the super computer in our head by scouring through years of varying experiences. I was looking back at my experiences and how my gut feel has evolved over the years. Do I tend to invest in a good idea or a good founder? It’s the age old question that every investor has in mind: Bet on the horse (idea) or the Jockey (founder)? Read more

Don’t get caught in the missing middle

Piyush Chaplot is currently the Vice President of Finance & Investments at Innosight Ventures and a Director at Chope. This article is an edited version of the original on his blog. You can follow him on Twitter: @PiyushChaplot.

Can you find a place on this planet where it is easier to start a venture than Singapore? Thanks to various schemes by government bodies like National Research Foundation, SPRING Singapore and other agencies, you have at least 25 different sources of seed capital (read An overview of angel investing in Singapore). You can even get enough grants to keep your company alive for the first few years. In my personal view, if you can’t raise seed money here, you do need to seriously think about your chances elsewhere.

But the real drama starts AFTER you have raised the seed money. Most people believe that half a million dollars is enough to take the company to the next level. Hard to disagree if you are a couple of graduates working on a cloud-based application or a mobile app. But not all startups fit that bill. If we want to build serious technology-based startup companies in Singapore, then we are looking at much higher monthly burn rates and/or much longer incubation periods. Read more

Key learning points on building a viable business model

On 5th July, a workshop on “How to build a viable Business Model” was held to equip entrepreneurs with a better understanding of what makes a good business model and what to look out for when pitching to investors. Speakers included Tanguy Lesselin of Cartouche, and Piyush Chaplot of Innosight Ventures. The workshop was co-organized with SGE.

Check out the key learning points generously contributed by the speakers from the workshop: Read more

Chillin’ With Piyush Chaplot of Innosight Ventures

 

We’re chillin’ with: Piyush Chaplot of Innosight Ventures, an experienced investor and mentor, after his presentation on “How to build a viable Business Model“, co-organized by SGE and Tanguy Lesselin of Cartouche, and supported by Microsoft.

When: This Thursday, 5th July at 8PM

Where: We’ll be meeting at Harry’s Bar, The Sail, 4 Marina Boulevard, #01-31 The Sail @ Marina Bay [map].

Interested in chillin? REGISTER HERE

How to build a viable Business Model – 5th July 2012

You have an idea for a startup that you have been itching to work on. But you are unsure on how and where to start. Knowing that only one of out ten new startups manage to launch successfully, how can you turn odds in your favor?

Fret not, the upcoming workshop to be held this Thursday will answer these questions and more! Read more

Why big corporates like SingTel can be White Knights to Asia’s startups

This article was republished with permission from the author’s blog.

“What are you doing here in (insert country), you should be in Silicon Valley.”

Do these words sound familiar to you?

In Asia, it’s very common for Founders with great ideas to either run their companies in boot strap mode or relocate to Silicon Valley. Even great talent is expected to take huge pay cuts when they join a startup.

We don’t need a scientist to figure out the primary cause of this issue. This is primarily because of the scarcity of risk capital in Asia. Entrepreneurs with good ideas have to slog for cash. One key factor that gives wings to the dreams of most Silicon Valley startups is the free flow of capital that lets them dream big…really big.

Silicon Valley is blessed with excess capital. And, that is probably why failure is embraced.

But how do they get that kind of money? What is the source? Who are these Limited Partners (LP)? Read more

How to mitigate risk when investing in early stage startups

This article was republished with permission from the author’s blog.

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. Read more