Albert Shyy, a Principal atA�Burda Principal Investments, belongs to the group of investors that haveA�been on the front lines as well as in the war office.
In 2010, he co-founded tailored clothing site AlbertMing, which specialised in waterproof suits. Three years later, he shut it down.
While Shyy said that although a�?a couple of partiesa�? were interested to buy, it would not have sold for much. a�?My co-founder [Ming Chang] had already gone to China and we basically just had some inventory and IP,a�? he said.
So when e-commerce giant Lazada came knocking on his door, offering him the position of Regional Director a�� on the condition he joined immediately a�� Shyy did not bother waiting to close a deal on AlbertMing and hopped onboard.
A year later, Shyy got bitten by the investor bug and joined GREE Ventures as a Principal. That gig lasted for a little over two years before he switched over to Burdaa��s Singapore office.
In an email exchange withA�e27, the tech-savvy investor talked about business strategies, the market outlook, and his investment philosophy.
Here are the edited excerpts:
Tell me why did you choose to become a VC and why the focus on tech?
I actually didna��t plan to become a VC, as I had previously been a founder and then joined Lazada to strengthen my experience in scaling e-commerce.
However, an opportunity came to join GREE Ventures and I was curious about being on the investor side of the table a�� I have to admit that Ia��ve loved it ever since.
Tech is becoming increasingly central to our lives across significant parts of the world, including here in Southeast Asia. In this region ita��s a really exciting period as hundreds of millions of people are coming online. I think wea��re just scratching the surface for the opportunities in this sector.
What is your investment philosophy? How do you help the companies you invest in beyond monetary support?
I like to invest in teams/companies that can offer some kind of unfair advantage in their industry a�� this can take many different forms, whether ita��s the industry expertise and relationships of the founders, the positioning that the company has achieved in its market, or even perhaps the work ethic of the team.
When we invest into companies, we plan to be long-term partners a�� so ita��s a team-wide effort from our side in providing support to them.
In Southeast Asia we talk regularly with our companies on topics including strategy, HR, fundraising, etcetera. Then, globally we can share best practices across our various portfolio companies and also insights from these markets.
Therea��s not a one-size-fits-all approach as each company has its own needs and priorities, but our focus is to build a smaller, targeted portfolio and work closely with all of these companies.
What kind of companies are you attracted to?
From an industry agnostic perspective, companies that can exhibit sustainable growth are always going to be interesting.
At the stage wea��re investing (Series B and beyond), we do expect the underlying fundamentals (margins, retention rates, etcetera) to be relatively healthy and for the team to have a clear understanding of their business model and how to continue scaling up the business a�� often times with a target for profitability/break-even in mind.
At present, we are focusing mostly on B2C business models and are looking pretty heavily at e-commerce and marketplace models in particular, partly because we have a lot of experience in this sector globally and partly because ita��s a good fit with the market in this region at the moment.
What kind of management teams/founders do you find affinity with?
We really enjoy working with humble, grounded teams that are just really passionate about the product and the vision theya��re following a�� they also tend to be laser-focused on execution and have a good feel for the market because they are living and breathing the space every day.
What kind of founders turn you off?
There are also some founders who have unrealistic expectations about VC funding, i.e. they want to raise money but dona��t want to deal with the strings attached, such as reporting, governance, etcetera, that institutional investors require.
This would be a big red flag and would generally hint at a difficult relationship post-investment as well. Fortunately, I think there is much less of this at Series B given most companies will have already gone through several rounds of funding to get to this point.
What qualities make for a good VC?
At the end of the day, wea��ll ultimately be judged on our ability to deliver returns on the investments we make, and it usually comes from selecting the right companies to back and being able to support them as they grow.
Personally, I feel that having empathy and respect for founders and their teams is also important as we shouldna��t lose sight that they are taking on all of the risks as they pursue their vision.
I remember having gone through the fundraising process as well and appreciated the advice and positive interaction that I received from some of the VCs I met a�� those are the ones that I wanted to keep in touch with even if they didna��t invest.
Thus, although I cana��t invest in the vast majority of the companies that I meet, I hope that I can also support those companies, even if in a small way.
Was there a moment where you went a�?Ia��ve made a mistake investing in these guysa�? and how did you tackle this problem?
I dona��t know if it was that extreme a�� of course not every (or any?) investment goes according to plan. There are instances of companies significantly underachieving sometimes, however.
In this case, the focus would be to revisit the assumptions wea��ve made about the business and understanding where we made mistakes, for example, is it around the market, team, business model, or other factors?
Doing this sort of a�?forensica�� analysis also enables a deeper conversation with the founders on the business strategy and where changes should be made.
Do you think there is a danger in creating a tech bubble when VCs are piling largeA�sums of money into startups with high valuations but are chalking up huge losses?
I think there is always a danger when the market gets too frothy but to me the indicator isna��t necessarily the companies at the top but rather when you start to see a long tail of companies with unsustainable valuations that are receiving funding.
At the moment Ia��m not really seeing that in this region.
Do you think Singapore Exchange (SGX) has what it takes to attract tech IPOs? If not, why?
I think the potential is there to build something like an AIM or Mothers type of sideboard here but I dona��t know enough about their strategy to say whether ita��s a focus for them and what the hurdles are.
Regardless of whether in Singapore or elsewhere in the region, I think there is certainly interest on the supply side for an IPO market to emerge, and it may only take one or two successful listings (even if small/mid-cap) to prove it can also be a viable exit pathway for a certain subset of companies
What is the most important advice you give every startup that you invest in?
Recruit and hire the best people you can a�� ita��s a marathon and companies need a lot of talented people to reach the finish line.
As a corollary, I also would advise they prioritise speed in the hiring process a�� the business tends to move so quickly that Ia��d rather quickly hire a good candidate than to perhaps wait several months to find the a�?perfecta�? candidate.