Pitching to investors: lessons learned by local entrepreneurs in Silicon Valley
19 Jan 2015
Raymond Yip, Fiona Lau and Tony Wong and from Shopline
While a new generation of entrepreneurs is emerging in Hong Kong, both local and from abroad, young business bosses still face challenges in securing seed capital from local financial resources.
An interim report from Google and the Chinese University (CUHK) Center for Entrepreneurship shows that while nearly two-thirds of a pool of local experts interviewed consider inadequate accessibility to financial resources as the most important limitation for Hong Kong entrepreneurs, 88 per cent of 612 young entrepreneurs surveyed cited self-funding as their major source of seed capital.
The big question is what differentiates those start-ups that succeed in attracting private investment from those who do not, and what makes a difference when pitching business to private investors.
“From my experience, it was hard in the beginning,” says Raymond Yip, chief executive of Shopline. “I made a mistake when I approached the process as if begging for money. You should never do that.”
Together with two other co-founders, Tony Wong and Fiona Lau, Yip has developed a DIY e-commerce platform for creating online shops. At first, the team did not turn to investors for seed financing. Instead, the trio each put in HK$30,000 from their own pocket and started their business.
Through their personal network, they secured a meeting with Rui Ma, the venture Beijing-based partner of 500 Startups, a Silicon Valley seed fund and accelerator, which has invested in hundreds of internet start-ups in more than 50 countries globally.
However, their pitch did not come through right away as Ma deemed the business to be at too early a stage to judge its success. After many back-and-forth pitches, they impressed Ma by tripling their number of users from 500 to 1,500 in a short time. At Ma’s recommendation, Shopline became only the second start-up from Hong Kong ever to be accepted into 500 Startups, and was granted an investment of US$100,000 from the programme.
“You should always believe in your product and show it,” Yip says. “If your business is at an early stage, you don’t have that many numbers to prove yourself anyway. You should show that you have the confidence to execute, you have the right team, and that it is the right time to do it.”
To date, Shopline has received investments from sources ranging from an angel investor to, accelerator and strategic funds in the United States, Southeast Asia and Hong Kong, although Yip did not disclose the amounts.
Asked whether there are differences between investors in Asia and Silicon Valley, he remarks: “In my experience, Asian investors generally tend to be more conservative [than those in Silicon Valley]. They look for start-ups which have been earning some revenue to show potential for growth.”
Yip’s experience resonates with Xania Wong and Jeremy Lai, who recently went on a study trip to Silicon Valley thanks to the Empowering Young Entrepreneurs (EYE) Program organised by Google and CUHK’s Center for Entrepreneurship.
Together with four other teams, Lai and Wong underwent training on how to pitch business to investors and had the chance to present to a group of Silicon Valley investors at Wearable World, Altos Ventures, 500 Startups and Plug and Play Tech Center, a global accelerator that specialises in tech start-ups.
Looking back on the experience, Wong, who founded a mobile job-matching platform, JOBDOH, connecting employers and temporary workers, recalls that a fundraising coach reminded her not to focus solely on Hong Kong when pitching to global investors.
“US-based investors were interested in the Chinese market potential, but not Hong Kong alone,” Wong says. “Having said that, most US investors are unlikely to invest in start-ups outside US markets.”
To arouse investors’ interest, she customises her pitch based on audience profiling. For instance, she started her pitch by organising a convention as an example for Wearable World, since they were arranging one that week.
She adds: “Hooking the audience in the first 30 seconds is vital. You need an engaging point that relates your business to your audiences.”
Lai is a founding member of Optica, a start-up that provides software technology to improve the visual experience of people who suffer from colour blindness. When he pitches his business to potential investors, he highlights the significant market potential (250 million people worldwide are colour blind), as well as his team expertise and his personal entrepreneurial journey.
Jeremy Lai of Optica
“Selling yourself comes first, product comes second,” he says, “You can’t expect a green light right away. It is important to leave an impression so that you can follow up with potential investors after the pitch.”
This might be easier said than done, however. None of the six teams from the EYE programme were picked up by the Silicon Valley investors during their stay. However, JOBDOH and Optica have secured investments of HK$430,000 and HK$100,000 respectively from Cyberport.
Lai sees trial and error as an opportunity to learn. He explains: “It is rewarding to meet panel members who ask tough, difficult questions as they are vital pointers for taking your venture to the next level. Business meetings and pitches, formal and informal, are the bread and butter activities of most start-ups; so don’t despair if you have a ‘bad’ meeting. The most important thing is to learn from it and make your next presentation even better.”
Xania Wong of Jobdoh
Fundraising for start-ups is indeed a long and winding road but should hold no fears for forward-looking entrepreneurs.
In fact, last year Hong Kong start-ups attracted record levels of venture capital investment since the global financial crisis in 2009, with a total of US$40 million from venture capital funding in local start-ups in the first 11 months. This was almost double the US$22 million in investment achieved in 2013, according to recent research from the Hong Kong Venture Capital and Private Equity Association. The growing amount of investment from venture capital funding in local start-ups may offer a reason for hope.
As Shopline’s Yip puts it: “I have been rejected many times … A lot of investors will tell you that it’s like dating. I kind of get it. You have to say: ‘Here is the product and here is the team. I hope you like it. If you don’t, that’s okay.’ Then you move on.”
Table: Essential ingredients for a five-minute presentation in Silicon Valley
11家Startup入選太古地產「blueprint」加速器
16 Jan 2015
太古地產昨公佈首批入選「blueprint」創業加速計劃的11家Startup名單。首批Startup司由來自全球超過150份申請中脫穎而出，獲選參與香港首個由發展商成立的創業加速計劃。
獲選者包括開發視覺軟件Optica，及配對臨時工網站JOBDOH，他們是Google「EYE年輕創業家計劃」的勝出團隊。
除了創業加速計劃外，blueprint亦另外提供佔地1萬平方呎的共用工作空間，以每月每人港幣2,000元的會員費供創業人士使用。自12月開放以來，已有超過 60位會員進駐。
信報StartupBeat圖片
太古地產指，獲選的11家Startup提供多元化的B2B技術解決方案，代表著不同領域的創新業務，包含電子商務、能源監察、缺陷管理設備和行李追踪裝置等。blueprint將為他們提供位於康和大廈的免費工作空間，為期半年，計劃有專業導師指引、產品測試及市場拓展機會，並協助其引入投資，加速業務發展。太古地產的加速計劃獨樹一幟，既無需創業公司支付任何費用，亦無設立股權回報條件。
太古地產行政總裁白德利主持開幕典禮時表示：「近年來，香港的科技創業正急速發展。作為商業界的核心成員，我們很樂意為這些創業者提供資源，也許是工作空間、集資渠道，又或是鼓勵和意見，推動他們繼續向前。相對地，blueprint能在太古坊推廣創業文化，加強其作為香港主要商業區的地位。」
blueprint的專業導師團隊不斷擴大，吸納超過70位香港企業的頂級管理人才和創業家，包括14位企業領導者和16位公司董事。除太古集團管理層外，blueprint亦吸引其他來自不同行業領軍公司的專業導師，包括優步(Uber)、特斯拉汽車 (Tesla Motors)、Rackspace和聯想(Lenovo)等。
此外，blueprint宣佈將與歐洲領先的創業導師計劃及種子投資公司Seedcamp合作，其合伙人Carlos Espinal將到訪香港了解亞洲區的創業環境，並找尋適合歐洲市場的投資機會。他亦會為blueprint創業社區定期舉辦工作坊。
11家Startup將共用康和大廈佔地1萬平方呎的開放式工作空間。新穎的設計鼓勵創業公司之間的協同合作，裝飾傢俱由太古旗下不同公司的廢舊物料回收再造，包括一個由香港聯合船塢廢棄貨櫃改造的會議室，以及由國泰航空飛機座椅改裝的咖啡廳舒適雅座。
太古地產管理層與11家獲選Startup合照。
獲選Startup名單如下：
向藍天能源科技公司鼓勵人們監察自己的能源使用情況，提供節能資訊，幫助人們在未來選擇更高效的能源。向藍天能源科技公司旨在令能源消耗這概念更簡單易明，從而使人們監察自身能源使用的過程更具趣味。
2.領創派
領創派是一個具影響力的營銷平台，幫助品牌透過贊助具影響力的學生領袖及學生社團，激活其校園客戶群。
3.Optica
Optica研發了創新軟件 OpticaCG，以美觀的方式將顯示器展現的顏色進行區分，幫助全球超過2.5億色盲患者辦別更多色彩。
4.SnagR
地盤巡視和施工缺陷的嶄新網上及流動管理系統，透過SnagR， 駐地盤工程師可以拍下地盤巡視中遇到的任何問題，將其插入電子版圖紙並傳送至相關部門，取代繁複且容易出錯的手動標示，令地盤問題處理及檢查更加簡便高效。
5.Locate
Locate讓航空旅客追踪他們的行李，並提升行李處理的透明度。Locate的設計適用於任何行李箱，將使行李丟失的情況成為歷史。
6.BrandPit
協助品牌及市場研究公司了解真正的消費者習慣， 透過圖像識別技術，BrandPit解決了傳統文字資料分析的不足，掃清語言障礙、垃圾郵件標籤、不含關鍵字的用戶帖等一系列障礙。
Variab.ly打破電子商務及零售市場的現有格局，令買家及商戶得以私下自動議價。Variab.ly研發的專利計算系統讓買賣雙方可以自動協商出最優惠價格，團隊正透過遊戲化以吸引消費者參與並培養忠誠度，從而進一步推廣產品。
8.Easyship
一站式滿足電子商務賣家的銷售需要，Easyship為網絡零售商帶來⼀站式的物流解決方案—只需一個指令，即可完成收貨、包裝、運輸到訂單追蹤的一系列服務。
9.JOBDOH
急需臨時工？請使用JOBDOH – ⼀個優質員工的地區性預約平台。JOBDOH的高品質臨時工作配對方案將空缺職位與臨時工作人員無縫對接，有效減少缺席率、工作表現差異及行政負擔，讓臨時工招聘不再更加快捷高效。
10.TofuPay
TofuPay讓網上支付變得更簡易、更經濟。因應亞洲區客戶需求，TofuPay簡化支付流程。除了包括PayPal及AsiaPay的功能外，TofuPay更以獨特的設計及具針對性的方案解決了網上支付的常見問題，如提升客戶服務質素、簡化商戶帳號註冊流程、處理經常性支付、以及提供優惠及透明的收費架構。
11.actiMirror
為零售、酒店、房地產等行業提供數據分析和針對性媒體內容的新世代智能鏡片，actiMirror在“大數據”平台上運行，將戲劇性地重塑未來我們購物及享受酒店設施的方式。
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