Written by Arie Fasman, Peilei Mu, Michael Tang
February 25, 2016 – CEIBS E-Lab had the pleasure of having an unexpected guest appearance from Mr. San Eng. Mr. Eng is of course an EMBA alumnus, and the Co-Founder and managing partner at Xcelerate Ltd, an investment firm focused on sustainable branded lifestyle companies.
The main focus of the sharing was to understand the point of view of investors when they evaluate entrepreneurs and their pitch, what kind of information are investors looking for, and what drives investors in each stage of a lifetime of a venture.
Know the investors:
Greed vs Fear
Every investor always keeps in mind two simple motives, Greed and Fear, and constantly evaluates ventures based on those two.
- Does the venture have the potential to generate substantial returns on investment?
For example, certain VC funds are looking only for ventures that got this potential, and invest solely in them. The assumption that drives them is that only if one out of twenty ventures will make, the funds still receive a substantial return on capital. The KO punch approach.
- Does the venture have a chance to disrupt an industry?
In this case the fear of staying outside the game motivates the funds to invest, and in this scenario the fund will be more attracted by the growth potential of the venture. Important note, even in this case it is important for entrepreneurs to present the forecasted move to profitability.
Who is the investor
It is crucial for the entrepreneur to know who is he pithing to? What is the investor looking for? At what stage is the fund of the investor? Etc.
Good and qualified answers to the previous questions will substantially improve the chances of any venture to raise money from VC/PE funds.
San top 10 List
Lastly, Mr. Eng also shared what are the exact things that he is looking for in the ventures that he is interested in. It is highly recommended to consider those factors when any entrepreneur prepares his own pitch.