This story was printed from TODAYonline 
Venture capitalists can also bring technical expertisewith their investments
Wednesday • August 6, 2008
ESTHER FUNG
esther@mediacorp.com.sg
VENTURE capitalists are often seen as cash cows by start-ups and fledgling entrepreneurs. But this overlooks other help these investors can provide.
“Nine out of 10 start-ups say that all they need is money. ‘Fund me and I’ll make you rich’,” said Mr Nicholas Chan, executive director of Azione Capital. “They fail to realise that they have nothing to give, other than an idea.”
Venture capitalists can not only provide funds for young companies, they can also bring managerial and technical expertise with their investments.
“Entrepreneurs who emphasise on their fancy education, hundreds of pages proposals, talkers-not-doers and trend-followers are filtered out right at the start,” said Mr Chan.
“There are some entrepreneurs who give us 100-page proposals and demand upfront funding of $50,000, and say they’d give us 1 per cent of their company,” he added, shaking his head.
There are entrepreneurs willing to scramble for financing and with energy to weather round-the-clock days, but they have to be open to some fine-tuning to their ideas, he said — especially on the profitability front.
Start-ups may take a number of years before they make money. According to a DP Information-ACE Startup Enterprise Survey conducted in March, only 28 per cent of start-ups turn profitable in their first year of operation.
For more than 10 years, Mr Zacchaeus Boon has been an angel investor, backing and guiding promising start-ups. He believes between venture capitalists and entrepreneurs, “there has got to be a lot of mutual respect and trust”.
“The one thing I’ve learnt, is that you never invest because of the idea alone. If you’re not able to get to the point where you know the entrepreneurs and yourself are on the same page and have acommon vision, it’s going to be difficult,” added Mr Boon, who is a partner at Thymos Capital.
His firm recently funded a start-up called Phlook, an online photo-sharing website that has storyboard-like features and zoom capabilities.
The founders, two former Siemens employees, approached Mr Boon for help months after they had quit their jobs to work on their website full-time.
“They walked away from secure careers and by the time they came to see me they’d been living on love and fresh air,” Mr Boon said.
“They were responsive when I suggested some tweaks to their site. They also shared with me what they planned to do down the road.”
