Investing in Asia: The Strategy of “Accidental” Venture Capitalist Nicholas Chan (Part 3/4)

15 Oct 2010 in Interviews

Singapore’s Entrepreneur-turned-”Accidental” VC Nicholas Chan on Investing in Asia from John Exley on Vimeo.

NOTE: **Warning About Video: at the 4:43 mark in this video, something is messed up with my camera (or perhaps my file?) for about 7 seconds. Initially when reviewing the video it caught me off guard so I hope you aren’t taken aback by it!

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Begin: the 3rd segment of my 4-part interview with Nicholas Chan…

An “accident”?
Most investors do not become venture capitalists accidentally. Singapore entrepreneur Nicholas Chan was managing the non-profit Project:Senso he had founded as his 6th company just a few years ago when the government approached him about ‘scaling’ his impact on the startup business sector by establishing a new VC fund.

Today, Nicholas Chan is a serial entrepreneur turned investor. As the Executive Director of Azione Capital, I was fascinated in learning more about his strategy for evaluating first time entrepreneurs and how he’s done so far as a young (just 31 years old) VC. Nicholas discloses the investments he’s made and explains how he goes about his due diligence when researching a specific startup and considering investing. Additionally, he reveals the metrics he analyzes when evaluating startups. He has invested in 25 companies (six in the Location Based Services sector, which is hot in Southeast Asia as well as the U.S.) and had 3 successful exits thus far. For a breakdown of his successful exits, check my interview notes at the bottom of this post!

While he takes a strong stance against the majority of big-mouth-do-little bloggers (more on this in the final segment of my interview), he is active on Twitter and LinkedIn.

*Want Nicholas’ attention? Email him: nicholas@azionecapital.com

*Special thanks to my friend Lai Wing Sheng for helping out by handling the camera!

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Below are the interview notes I took:

1. Nicholas tells the story of how he became an “accidental” venture capitalist.

2. He discusses how his success with Project:Senso and helping non-profits caught the government’s eye. IDM (Singapore’s government-run ‘Interactive and Digital Media Network’) contacted him and suggested a way for him to scale his strong support with startups. Nicholas bought into their vision and forms Azione Capital.

3. Nicholas has lead the funding of 25 companies, through 3 different channels:
A) Government
B) Own pocket
C) Azione Capital

4. Of his 25 investments, Nicholas has had three successful exits in the last 2 years (1 personal funding on his own part, where he was a co-founder; the other 2 were partially funded by Azione Capital and partially by the government). The companies are:
A) Who Works Around You
B) Events Core
C) GameMo

5. Nicholas explains the way he analyzes startups and how he goes about his due diligence, from most to least important:
A) Team
B) Market
C) Idea
D) Technology

6. Discusses the metrics he analyzes.

7. He has invested in 6 startups in the Location Based Services market, so he discussed the industry in Asia.

8. One sector he’s particularly interested in right now: maritime (sea). Why? Because of the technology ships are using. Broadband. New enterprise systems. etc.

9. He also shared his insider opinion of the career trajectory for becoming a VC. I asked him if starting and successfully growing/operating a company first was a “rite a passage” for all aspiring VC’s.

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QUESTION for YOU the reader: what do you think of how heavily involved Singapore’s government is in the early funding of startup companies? Is it good for the ecosystem as a whole or do you think it messes up the market?