Jerilyn Wu’s Post

I certainly believe there is a lot of potential in Southeast Asia. The region is likely to produce a few $10B companies in the next 7-10 years, and I am confident that at least one of them will be in the F&B space.

This raises a critical point about investment leak in SEA, particularly in Indonesia. The game of startups and investors here is heavily influenced by psychological factors—I'm not bias-bias—like FOMO, driven by unicorns, leading to a bubble effect. However, real untapped potential lies in addressing simple yet profound problems beyond e-commerce, agritech, fintech, and carbon credit. Overlooked communities represent opportunities to break wealth concentration and drive true economic transformation. We need to shift from traditional consumerism to empowering communities as drivers of pure capitalism. Instead of social experiments and aid, we should give these communities roles to become engines of prosperity for themselves. This neglected approach holds immense promise. By leveraging local communities' potential and addressing their unique challenges, we can generate sustainable returns. This aligns with adjusting expectations to the actual size and demands of our opportunities. Ultimately, it's about making real changes that resonate with ground realities. By doing so, any investment in our region will be more grounded and yield significant returns, driving capital confidence and regional progress. #startup #investment #fundraising #bubbleffect #FOMO #unicorn #changemakers #DHGrowth #SEA

I know Jeremy as an optimistic person and someone who is bullish on Southeast Asia and Singapore and I'm a big fan of Tin Men Capital but this post comes across quite extremely pessimistic. if this view is represented by most VCs in SEA it’d drive a lot of founders away from SEA. Writing my commentary because I think a lot of the views founders and VCs hold need to go thru 99 rounds of discourse until SEA startup scene finds its original culture and message. -unrelated side note- shout out to jeremy for writing his thoughts publicly and engaging with the audience in comments section though, i think these conversations make a huge difference. Most VCs and founders in Singapore and SEA are too quiet and that's such a con of building in SEA. it feels like a depressed ecosystem and it doesn't need to. the culture of "share/talk when you make it" is so broken and net negative. Conversations about the most important topics are what allows every member of the ecosystem to qualify/disqualify decisions much faster and grow exponentially. btw i care about this because the 3 countries that i've lived in (iran, malaysia, singapore) suffer from extreme forms of brain drain (for very different reasons) but one thing i know is that countries get worse over time if they don't find a way to accommodate their thinkers/builders/entrepreneurs. -end of sidenote- anyway, the post gives me the impression that it assumes the following: it assumes zero chance of producing global companies like Stripe, in SEA, in the next 10 years. It also assumes the entrepreneurial talent in SEA has no chance of changing the odds, even thru its ability to move globally and sell globally, at the time when the craziest tech (AI) is changing the odds and disrupting markets. it also assumes SEA VCs can somehow control the market outcomes and make SEA more mature if they invest prudently and in smaller amounts. in my view, if SEA has more capital and an open mind, the population of its high quality entrepreneurs will increase exponentially(more talent retention and attraction). english speaking region, good regulations, low cost of living. the opposite is absolutely true too. talent leaves when there’s less money since talent follows resources.. if VCs raise based on the assumption that SEA is and will be an immature market, then that will indeed become the reality. the opposite of what jeremy shared wouldn’t be to spray and pray, but to signal willingness to fund growth.

posting a follow up thought on this because i think it matters: i think the undesirable outcome that Jeremy mentioned (and I agree the outcome has been undesirable) is not caused by the size of the funds or the way they have been invested in companies. I believe he is mistaking the quality of outcome for the quality of investment decisions. you can make good decisions and produce bad outcomes. the solution isn’t to go and change the decisions, but to double down in the decision making model. in the case of venture capital, the only decision making model that has worked globally is the power law. example: multiple investors invest in 100 smartest founders hoping 5 of them will become billion dollar companies and make a great return that pay off for the other 95 that didn’t. if you do that and all 100 fail, the solution isn’t to invest less, but to keep doing it again, knowing that founders become more experienced over time and knowledge transfer and network effects compound and the results improve. It is not for every LP. it is not for every fund manager. it is not for every entrepreneur or employee. But those who are in it should be comfortable the risk and reward involved. you can’t control/predict who wins, and reducing the fund sizes will just make Southeast Asia less desirable to smart talented and ambitious people. the notion that SEA has its own vibe and therefore VC laws don’t apply is exactly to say “we have given up on SEA to produce billion dollar companies, ever” and i think it’s important to at least say that explicitly. respectfully, VCs complaining about other VCs raising too much may be what LPs wanna hear in the short term but it is in effect suicidal for the startup scene. it’s not VC if it’s optimized for 2-3x return, its value investing. i don’t call that localization, i call it killing VC in SEA altogether. the craziest technological breakthrough of our lifetime is out there and the VC discourse in SEA cannot be about reducing fund sizes.

Funds in Southeast Asia are raising too much money. Yes, this problem does not just apply to startups. Let’s run the numbers on the fund economics: → A $100M fund would have to deliver at least 300% (over 10 years) → That means they’ll need to return $300M → If they allocate in a hyper-diversified way, expect ~5% stake in companies → Working backwards, they’ll need $6B worth of exits to provide that return → If you raised a $300M fund, you’ll need triple of that. ($18B) 🚨 The question now is, can you realistically find $18B in exits in Southeast Asia at its current state of maturity to deliver that promise? Very few are able to or will ever meet that target. But, they’ll still raise these rounds anyway, because: - Certain institutions only invest in funds of a certain size - ‘More is better’ - right? - Higher fees on AUM for the fund This leads to forced allocation and can set unrealistic expectations for founders. The path forward for our region has to be more grounded. Funds need to work out a thesis without being overly optimistic. Otherwise we’ll see DPIs decline and apprehension from LPs to invest here. Play your own game. Adjust expectation to the demands and actual size of the opportunity. When results are delivered, then we can progress as a region with more capital confidence.

📢 NextBold Capital, a private equity firm focused on supporting the growth of small- and medium-enterprises (SMEs) in Southeast Asia, is raising its first fund to invest in SMEs across Vietnam, Cambodia, and Laos. ➡ NextBold Capital was co-founded by Sjoerd Zwinkels, former investment director at Mekong Capital, alongside Quadrant-backed Fitness & Lifestyle Group former executives Pedro Baliza and Jonas Wilbert, who bring extensive operational and investment experience. The firm aims to provide not just capital but hands-on operational expertise to help businesses in these markets scale sustainably. ➡ NextBold Capital's strategy encompasses targeting SMEs in key urban centres across Vietnam, Cambodia, and Laos – markets experiencing rapid growth due to a rising middle class, strong entrepreneurial cultures, and increased foreign investment. The firm focuses on sectors like education, healthcare, consumer goods, and services, where they see opportunities for governance transformation and value creation. #investvietnam #tradevietnam #ipavietnam

📢 NextBold Capital, a private equity firm focused on supporting the growth of small- and medium-enterprises (SMEs) in Southeast Asia, is raising its first fund to invest in SMEs across Vietnam, Cambodia, and Laos. ➡ NextBold Capital was co-founded by Sjoerd Zwinkels, former investment director at Mekong Capital, alongside Quadrant-backed Fitness & Lifestyle Group former executives Pedro Baliza and Jonas Wilbert, who bring extensive operational and investment experience. The firm aims to provide not just capital but hands-on operational expertise to help businesses in these markets scale sustainably. ➡ NextBold Capital's strategy encompasses targeting SMEs in key urban centres across Vietnam, Cambodia, and Laos – markets experiencing rapid growth due to a rising middle class, strong entrepreneurial cultures, and increased foreign investment. The firm focuses on sectors like education, healthcare, consumer goods, and services, where they see opportunities for governance transformation and value creation. #investvietnam #tradevietnam #ipavietnam

Eleven African countries are currently among the top 20 fastest-growing global economies, according to the African Development Bank Group. However, more work is required to overcome obstacles and fully unlock the potential of venture capital (VC) investments in the dynamic region, say Strathmore University’s Edwin Obonyo and INSEAD’s Claudia Zeisberger. Offering start-ups VC funding at an early stage can help improve their trajectory of success. This doesn’t just help the start-up – it also enables local investors to develop their knowledge of VC investing, underlines the value of local expertise, and strengthens all-important network ties between local and international investors. #VentureCapital #Africa

"Fewer secondaries mean fewer opportunities for early investors like angels to collect profit on their investments. Uwem U., Head of Investments at Launch Africa Ventures, believes angels should plan for 5 to 10-year scenarios. “Angels have to make investments with long time horizons in mind, rather than quick flips on secondary markets,” he said." #africa #angelinvesting #businessangel #secondarymarket #investinafrica https://lnkd.in/eDDHNJ6i

#CaringIsSharing 💚 below Amy Lewin from Sifted has stumbled across a theme I started looking into back in 2014/15. She asks whether 'Government's backing the VC sector is a problem or not'. No and Yes. No because we should be investing in innovation and Power Law. Yes because a primary source of the liquidity will be 28m pension pot owners who were receiving 0% returns (after pension fees of 0.5% p.a.) during ZIRP years and getting ZERO upside from Power Law. Few people in Pensions La La Land pay attention to the actual unmet needs of their members, preferring instead to operate a 🙈🙉🙊 policy when I challenge them on the Effectiveness, Efficiency and Relevance of their investment strategy for 28m Double Defaulters. This isn't the post for explaing why 'low cost' DC Workplace Pension Platforms use #Pensionwashing to rip off consumers and have been getting away with legalised robbery for over a decade, but this is why it is a PROBLEM. The Mansion House Reform finally brings the prospect of better potential outcomes to millions of hard working families in Gen Y, Z and Alpha - however, Gen X will require Restitution Funding to help close a £600bn financial harm scandal linked to ZIRP. Just Saying 🤷♂️ #BUOM