"A lot of people are very bearish now and a lot of investment thesis has changed. What was super hot in 2020 and 2021 isn’t as hot today. Even VCs are more quiet nowadays. Back in the day, we were very focused on anything that can produce large GMV because, at the time, the thesis was large GMV, large market size. If you convert a small percentage of that, there'll be a hundred, 200 million dollar revenue company, but that does not happen to be the case nowadays. A lot of people look for something more tangible like revenue, and even the pre-seed stage looks at a lot of companies that are EBITDA positive.That's the way it should be because when you talk about real tech innovations, the first question is whether the talent is even ready to make something that's on a global scale. When you talk about tech, it has to be global. When I look at Indonesia, it's a consumer-driven country. It makes sense that a lot of the investments are more consumer-driven, more agriculture because that's what Indonesia is rich in. The current market dynamic is more sustainable in the long run." - Fandy Cendrajaya
"Be careful about the valuation. We talked about how in 2020, and 2021, we viewed post-money valuation as a success metric. We shouldn’t do that anymore. We should raise what we need at a conservative valuation as possible, just because of the exit landscape. We should work backward. If we feel that our company can go to $500 million, maybe the last round that you want to be raising private equity at, before eventually going public or whatever the case may be, is $100 million because the last investors have to have that upside.So, work backward, and pre-stage, I would always recommend people not to go above 10 million just because if you work backward, it will be quite difficult if you raise at 20 or 30.There have been success stories that you raise at 20, but you can still build into the valuation the next year. More often than not, the lower the valuation, the better it is for the founders and the dilution is kept at a minimum." - Fandy Cendrajaya
"The way we think about it is we have to always put the LPs’ interest first. Even if there's a lot of upside for me on the table, how many companies have gone on to a high valuation and have suddenly just stagnated there? A lot of them have, and it will be very prudent, at least for my end as a fund manager, to take some exits first whenever there's a chance because you never know what may happen in the future. That's what I always advise founders as well. Nobody's telling you to exit fully, but this is your company. You don't want to just make money off your salary. If you want to do that, you want to find something more stable, and the life of a founder is the opposite of a stable life. There's a possibility of exiting." - Fandy Cendrajaya
In this episode, Jeremy Au speaks on the Indonesia bull versus bear market, founding Kopital Ventures, and the tough startup exit environment and strategy.
Keywords: Fandy Cendrajaya, Indonesia Bull vs Bear Market, Founding Kopital Ventures, Tough Startup Exit Environment, Indonesia, VC, Founder Story
