"I meet with founders very often, and I have not met anyone this entire year who can raise easily—zero. The amount of pleading everyone has to do just to get a term sheet, even at early stage, is crazy to me, including for businesses so early that showing profitability at this stage is unrealistic. You’ve been around for a year or so, and they say you should be profitable now? Amazing. Or the one saying, can you get to 1 million ARR within your first year of launch? " - Gita Sjahrir, Head of Investment at BNI Ventures
" A lot of Indonesian founders think being a GP is glamorous, where you just raise money, invest, and collect management fees. I always say a GP is also a founder because they have to raise for something that hasn’t existed before. Even if you raise for Funds One, Two, Three, or Four, Fund Five has not existed when you are raising for it. In that way, a GP is also a founder, and if GPs and founders can look at each other like that in this emerging market, there will be better collaboration because people just need to communicate better. " - Gita Sjahrir, Head of Investment at BNI Ventures
" Indonesia announced stronger than expected economic growth, yet with falling auto sales, rising unemployment, and a decrease in foreign direct investment, many were forecasting lower numbers. We still ended up above 5 percent, which confused a lot of economists and normal people alike. When we think about Indonesians, it is important to recognize the diversity of people. Unfortunately, there is a concept that they are either in extreme poverty or billionaires in USD with nothing in between, but in reality there are many people in between. " - Gita Sjahrir, Head of Investment at BNI Ventures
Jeremy Au and Gita Sjahrir unpack Indonesia’s turbulence, from corruption scandals and startup economic uncertainty due to the collapse of eFishery. They contrast Singapore’s stability with Indonesia’s volatility, explore how weak rule of law erodes trust, and discuss how scandals damage both founders and investors. They also analyze the role of boards, GPs, and operating partners in strengthening Southeast Asia’s startup ecosystem.
02:00 Corruption scandals seem to show political motivation: The Tom Lembong case introduced the charge of “potential loss to the state,” which was never proven, and targeted him while other ministers who made similar decisions were left untouched.
04:46 Public mistrust deepens: Indonesians question whether corruption cases are genuine, ploys, or selective prosecutions, and many view them as witch hunts that worsen the disconnect between government and citizens. This has resulted in street protests.
09:19 Economic data raises skepticism: Official growth figures of above 5 percent confused the public, as weak indicators like falling auto sales, rising unemployment, and declining foreign direct investment suggest economic hardship is the reality.
12:12 Central bank cuts interest rates: The surprise decision was a move to boost growth to increase domestic investments and spending. Observers argued that transparency and equal rule of law remain the true foundation for long-term capital flows.
15:07 eFishery founder detained by Indonesia police: The founder’s detention followed a public Bloomberg interview in which he admitted to misconduct, reinforcing concerns that the scandal severely damaged trust in Indonesia’s startup scene. Law enforcement may improve public trust and deter bad-faith actors
19:33 Investor reaction turns punitive: Indonesia founders are asked to show profitability very early, to hit one million ARR within their first year, and to give up more than 20 percent equity even before a Series A.
28:17 VC operating partner model is missing: Unlike private equity, Southeast Asian venture capital rarely employs experienced operating partners - to support founders directly or fill board seats, leaving a gap in hands-on help and corporate governance.
Jeremy Au (01:13)
Hey Gita, good to see been a few months so I feel like we've got a lot to catch up on huh? I know. I know what? Okay what's the drama going on in Indonesia?
Gita (01:16)
It has been... yeah, there's been a lot of drama here too.
we run the gamut from corruption cases all the way to more and more uncertainty and also changes in policies. So it's been hectic.
Jeremy Au (01:36)
Okay, hectic, corruption. Okay. Well, those are always bad, not advised bad, but you know, if they're coming out the light, means it's good, right? I guess somebody's catching or debating or investigating. So maybe that's a good sign.
Gita (01:41)
Bad. Yeah.
Mmm.
These are the ones we found,
Jeremy Au (01:54)
Yeah.
This is like this survivorship bias or something, you know. yeah.
Gita (01:58)
survived pressure pipes. Laughing
while crying inside.
Jeremy Au (02:03)
Yeah. Is that, is that an emoji for Indonesia right now? Well, I think the emoji for Singapore is like determined face, you know, the, the two eyes, the flat.
Gita (02:12)
Well,
fantastic speech by PM Lawrence Wong. Fantastic speech for the National Day Rally. Kudos.
Jeremy Au (02:19)
Well,
that's interesting because I didn't watch it. So I'm glad you an Indonesian are telling me about how good your speech was because I was like...
Gita (02:21)
Yeah.
Yes! A lot of us watched it.
Jeremy Au (02:29)
going to say this, right? Lawrence
Wong is doing well on the global stage. think a lot of people are listening to him and reading him and actually give me quotes about him. Is this that domestic? What does the newspaper say? mean, okay. Okay. Now you're jogging my memory. I think what he said recently was like, Singapore is very boring, but everybody trusts Singapore and that's something that people, is an asset that people would high for. Right. I think I'm horribly misquoting him and I'm probably going to get.
Gita (02:33)
Yeah. Right.
God.
Mm-hmm.
Yes.
Jeremy Au (02:55)
in a slap in sound direction order and how I did that quote. was that a quote that came from that speech as well?
Gita (03:01)
Jeremy, all I'm gonna say is I might want a little bit of boring in my life right now because Indonesia, yes, sure, this is where the growth is. It is also where a lot of the hectic drama is. And I think if there's one thing we all know about Singapore, boring is great for business. That's called certainty. That's called rule of law.
Jeremy Au (03:07)
You
no.
Yeah. Yeah.
say there's this quote, right, which I think they misattributed it to the Chinese. But, you know, the West, say, may you live in interesting times. And that was a curse on people's like, you know, it's like, Okay, so what's going on? What's interesting in Indonesia from your perspective at a high level?
Gita (03:30)
Mm-hmm.
Very interesting.
Oh,
where do we begin? Actually, just now, probably in the last week, a vice minister detained or arrested for a potential corruption case, for a graph case, but he was also arrested with 13 other people and he's from the same party as the president.
Jeremy Au (03:54)
Mm.
Gita (03:55)
And the thing is, the sentiment right now for a lot of people is we're kind of going, right. And? and I think it's coming from how many cases are coming out and not all of them ended
being actually proven for corruption. So the very, very famous one that just happened is the Tom Lambeau case where he was convicted for years in prison for quote unquote, I'm not making this up, potential loss to the state. Right. No, no, no. If your face and your question went immediately to what does that mean, Gita? So
Jeremy Au (04:21)
What is potential loss of the state?
Gita (04:30)
Several other ministers other than him. I think there were five other ministers or six other ministers Enacted the same rule while he was still Acting as minister. The only difference is he's the only one who was arrested and he was the only one who was given this sentence of potential loss to the state Which is exactly what I just said potential
But so did it happen? Probably not. But they were really, really committed to putting this guy in prison. And then at the last minute, President Prabowo ended up.
abolishing his sentence. So now he's free. And the good news is Mr. Tom Lembong is now suing the judges, which he should, right? Because they took him through almost one year of being in prison waiting for his sentencing and his trial. the, yeah, yeah, he was not a free man. So this is why.
Jeremy Au (05:17)
What? He was in jail during that time?
Gita (05:22)
Now that all these corruption cases are coming out, the sad part is there's also a lot of public mistrust of is this case real? Is this case just a ploy? Is this case really about eradicating corruption? Or is this another very large corruption case that proves that we deserve our ranking by Transparency International, where we are ranked 99 out of 180 for.
corruption, right?
Jeremy Au (05:53)
Yeah, I mean, I just have questions actually a little bit. I think the first reaction I've asked is at several levels, right? One is, if you tell me, is there corruption in Southeast Asia, then the answer would be yes. so I think every local person in Southeast Asia would say yes. I think on a global stage or a panel, you know,
Gita (05:55)
⁓ You should, you should, because they're all crazy.
Yeah. Yes.
Yep, 100%.
Right.
Jeremy Au (06:17)
then
maybe people may not say no. But I think in our private conversations, I think we see that at a low level, immigration, all the way to enforcement actions, to other stories I've heard. So I think whether it exists or not, I think the answer is yes. ⁓ I think the second part is, if you ask me whether it's common as well for this anti-corruption movement, I think it's also happening, right? I think in China we saw the...
Gita (06:31)
Yes.
Yeah. Right.
Jeremy Au (06:42)
You
don't have like any corruption pushed by Xi Jinping and his early terms and years that's eased off. I think Vietnam had the burning furnace, anti-corruption investigation. And I think they recently stopped as the, I think the new leadership has come in and said, you know, we want to obviously feel like we've cleaned it up enough. One, but two similar to China saying we need to focus on economic growth and trying to build up a pro-business environment in this, you know, new US administration.
Gita (06:44)
Yeah.
Yep, you're right. Yep.
Right?
Yeah.
Jeremy Au (07:10)
And
trees, like even Singapore recently is still concluding, you know, kind of like a corruption trial regarding the M1 and minister. you know, and I think they're still going through that process now. so I think corruption and anti-corruption, trials seem a feature in Southeast Asia. I guess where I'm kind of feeling a little bit lost is you keep using the word potential loss to the state. And so I guess my first question, if you don't mind me asking is like,
Gita (07:15)
Yeah, yeah, yeah, I remember.
Yeah, that's a real term.
Yeah.
Jeremy Au (07:33)
Well, there, guess, I mean, the threshold is the, steal money, which is one, which obviously is a loss to the state also for personal enrichment. Then two is there's obviously a loss to the state, which is You are making, um, you're deliberately making losses because you are building public housing and public housing isn't supposed to, make a profit for the state. And then of course the third threshold you mentioned is.
Gita (07:48)
right, right.
Jeremy Au (07:51)
potential loss to the state, which I don't really understand. So I'm kind of like, so are you saying that this guy's incompetent? Are you saying this guy was corrupt? Or are you saying neither of the two?
Gita (07:53)
Mm-hmm. Yep. No. No. ⁓
It was neither. What they found was they found no proof that he stole any state money or that he took in any payment or graphs. Also, what he did regarding the import of sugar and, you know,
the prices surrounding that timeframe, other ministers have done too. So the big suspicion is why arrest just one when you could have arrested five others who did the exact same thing basically. And that was when collectively, I think the Indonesian public saw this as a witch hunt. when, yeah, so when you set potential loss, the problem was it was never proven.
Jeremy Au (08:18)
Mm.
Mm.
No, so politically motivated instead of true.
Gita (08:39)
That's why the sentence came out as a shock to pretty much everyone watching the case, because we said, well, that's crazy. That's saying, you you did a potential crime. Like, is this a movie? You know, but that was that was the verdict. Right. And at the last minute, President Prabowo abolished the sentence and the case. So, you know, now Tom Lembong is a free man. But again, it cast this doubt.
Jeremy Au (08:58)
Yeah.
Yeah.
Gita (09:06)
over
all other future corruption cases. So yes, this vice minister is out, you know, for the most part, every time there's a corruption case, a lot of Indonesians just think, yeah, most likely he did it because you're right. In Southeast Asia, corruption exists. Look, I corruption exists probably everywhere in the world. Southeast Asia is just one of those places that this, you know, this issue really blooms for.
whichever reason, and Indonesia, as you know, has been fighting this for a very long time. But again, there's a lot of trust issue between Indonesians and the data that comes out. And I think that's actually very worrying and very problematic. And I see it as an issue, especially from the communications.
Jeremy Au (09:42)
Mm.
Gita (09:50)
division of the government, whichever part of the government. So I'm not just talking about the presidential communications office, but also communications infrastructure, right? Something's going on that there's a disconnect between the government and the people. And that's causing a lot of distrust with whatever is happening. So for example, this is not just about corruption. It's about, let's say recently Indonesia announced stronger than expected economic growth.
Jeremy Au (09:59)
Hmm.
Gita (10:15)
So a lot of people, because of falling auto sales, rising unemployment, a decrease in foreign direct investment, were forecasting like, I don't know, we ended up being above 5% economic growth, which a lot of economists were very confused with. And so we're just normal people. And I think when we're thinking about Indonesian people,
In general, it's very important to think of the diversity of people. So unfortunately, there's this concept that maybe people are just between the haves and the have nots, right? We're either in extreme poverty or they are billionaires in USD and there's nobody in between. There's actually a lot of people in between. There's a huge middle, lower middle, upper middle class.
people who are educated up to high school, up to graduate, people who are professionals, diaspora. So Indonesians are just very diverse. It's not just between the haves and have nots. And I think this disconnect that the Indonesian people are just very diverse and therefore also have the ability to read and understand the news in various capacities, somehow that's lost. Because
Jeremy Au (11:13)
Mm.
Mm. Mm.
Gita (11:26)
basically that economic data came out. There's not a lot of explanation behind it. ⁓ And people are questioning again and again, because if you see the economic indicators, I'm a little worried about it, right? Do I think there's been a change in data? Actually, not necessarily, but I wonder.
Jeremy Au (11:31)
Mm.
Mm.
Gita (11:47)
what's driving it. And that's all just trying to find transparency and the explanation behind the reporting. Yeah.
Jeremy Au (11:52)
Yeah, I mean, I think
there's obviously a challenge for every emerging market, right? famously in China, I think there were obviously headline figures for GDP growth. I can't remember the minister, the CEO leadership was basically saying like, doesn't trust all of the data that's being reported, because officials at province level are being paid based on GDP growth. So they are fudging the numbers.
Gita (12:06)
Right. Yeah, I remember. Yeah.
Jeremy Au (12:11)
So he was using his own internal data. We're just looking at, you know, kind of like light sources and intensity and energy consumption. even in America, I think we had the jobs report.
Gita (12:17)
Mmm.
Jeremy Au (12:21)
And there were several, kind of like months where jobs and then they had to do a restatement and they said basically that job growth was not as strong as it had been historically reported because of measurement error and so forth. So I think there's a dynamic, obviously, that it's not easy to measure these numbers and also the subject to manipulation or bad reporting depending on it. So I think we don't know the answer for that.
Gita (12:24)
right.
Right, right.
No.
Jeremy Au (12:43)
But I think what's interesting is that we do know that the Indonesia Central Bank is cutting interest rates again. And that was a surprise, right? because when you cut interest rates, obviously you're pushing more money into the system. You're trying to get growth up. Which is, think it makes sense. mean, think Prabowo has obviously shared that he wants the economy to grow faster. But I'm just kind of curious, like, why is it a surprise from your perspective?
Gita (12:47)
Yes, yes,
I think it's not just me. think everyone when we heard it yesterday, we all went, what's happening? ⁓ But again, I think the question isn't about is the economic growth data, you know, real or not. The question is more.
Jeremy Au (13:09)
You
Gita (13:19)
looking for transparency of methodology, because what the rate cut also indicates to me is that, okay, you want to boost growth and you want to make capital flow, right? You want to have more lending, more productivity, more use of capital. I get it, right? But then again, a lot of business people and a lot of private sector
what we're looking for is just beyond the rate cut. In the end, to have capital go in and out of any country, of any place, you basically just need a pro-business environment. It's about that. And pro-business environment requires rule of law. And rule of law...
doesn't mean then this is a country where everybody goes into a witch hunt and everybody holds a gun to your head, you know, and see whether or not you potentially lost money, you know? It's not about that. It's about ensuring that the law behaves the same whether you own a mom and pop F&B operations in remote island. And if you...
are the CEO of a multi-billion dollar energy company. That's it. I think that's what we're looking for. so a lot of these things like rate cuts, which is also probably in line with Prabowo's new budget coming out, which is a lot higher than this past year, so the budget for 2026. I think a lot of it is meant to boost economic growth and meant to boost activity.
But again, my question will always be, OK, in the end, it's about rule of law. In the end, it's about the structure and the infrastructure of the law and how it's administered to people. It can't be sharp to the people at the bottom, and it can't be dull to the people at the top. That's really where I'm at. So I think, OK, we were all surprised with the rate cut.
I get your point. I hope it works. hope it boosts lending. I hope it boosts bank activity. But again, capital cannot flow unless you have a lot of certainty in the market through equal administration of rule of law.
Jeremy Au (15:19)
So talking about rule of law, we can talk all day about macroeconomics and how, you know, the central bank is going to interest rates some more in terms of signaling, this stuff, And let's talk about rule of law since that's clearly something you care about. So I think that two other investigations other than the minister case, but I think one is the e-fishery
Gita (15:24)
Sure. Yeah, supposedly, yeah.
Yeah.
Mm.
Jeremy Au (15:38)
founder has been detained along with several executives. It's good, I guess. And then, the two of course is a tiny hub, which is a prior incident of failure and collapse. those are two different cases, but let's talk about the e-fishery one. I think it's a little bit more cut and dried. So the recap from my perspective is the Indonesian government detained them and a couple of executives and now they're being questioned. But I, after, you know, a collapse of a billion dollar, you
Gita (15:42)
Good. Yeah. Right.
Right.
Yeah, they should.
Jeremy Au (16:06)
agri-tech unicorn and darling and champion. And from the regional perspective, it's obviously caused a lot of pain. It caused a lot of global investor distrust in both Indian-Asian and Southeast Asian startups. So, but can you tell a little bit more about your perspective on...
Gita (16:08)
Mm.
Yeah. Yep. Until now.
I think in a previous episode, we were talking about how I kept saying, really, someone should detain that guy. Someone should arrest the guy because it sends a signal that you can't just basically rip apart the infrastructure and trust in the market and get away with it. It was fairly obvious. Also, the guy did a very public Bloomberg interview.
Jeremy Au (16:36)
Mm.
Yeah, you confess to doing it.
Gita (16:43)
on this, right? I
mean, I think the discovery process won't be so tough because there's a very public interview. Your honor. Yeah, here's something that went very viral with like, right?
Jeremy Au (16:52)
It's like, your honor, here's a screenshot of the Bloomberg article.
He says he did it on behalf of the farmers from a different perspective.
⁓
Gita (17:08)
Because
I wanted to do good therefore I did bad. I mean, okay so in a way it's it's good that he's saying it's just that again We're all waiting with bated breath with what does this mean?
Jeremy Au (17:12)
Yeah,
Gita (17:21)
Will there actually be punishment at the end? Will there be some kind of accountability? Or is it just, you know, pat you on the back and say, hey, next time don't fudge the numbers. And so I think also what made a lot of people now jump on the TaniHub band and say, yeah, yeah, this must be a really terrible case is because...
The e-fishery case just set the groundwork for making people simply not have faith in the Indonesian startup ecosystem, which as you know, I always believe is extremely unfair because for every one e-fishery case, there's also like, what, 10,000 founders who are just doing their best, who really just didn't.
mean to do anything and is trying to solve a problem. They're just normal people and they're all getting the brunt of it, right? Everybody's having a really hard time raising. Everybody's having a really tough time convincing the Indonesian thesis. And some of these people have been working on their problem for what, like more than five years through the pandemic, through all the problems. And here we are.
Jeremy Au (18:25)
I mean, I think, you know, somebody was asking me yesterday, I was like, what is the impact of e-fishery? And obviously, I think obviously there's a loss of investor confidence, but I also was thinking about it more structurally. And it was just a fundamental misallocation of all that productive capital, right? I mean, all of this money that was ESG linked, that was designed to help people have better lives. I think it went into a business that destroyed, you know, effectively by today, I guess, 90 cents on a dollar. I think that's one side.
Gita (18:34)
major.
Yep. Yep.
Yep.
Jeremy Au (18:52)
But, you know,
Gita (18:52)
Yep.
Jeremy Au (18:52)
all that money could probably have been split up a hundred ways and become like, you know, a million dollars each into, individual founders that needed early stage capital. So it was a misallocation, not only to, from productive use of capital to unproductive use of capital. but also is a misallocation actually from late stage capital, would say. and that could have gone into early stage capital into the next wave of founders. And I think many good faith founders that honestly deserve a shot.
Gita (18:58)
into capable. Yeah.
or yep, right. Yep.
Jeremy Au (19:17)
unfortunately will not get a
Gita (19:18)
Right.
Yeah, I meet with founders very often. I just met with one yesterday. I'm meeting another one today because no matter what, I was a founder. They'll always be my community. And I have not met anyone this entire year who can grace easily. Zero. The amount of pleading everyone has to do just to get a term sheet, even if it's early stage, is crazy to me.
including for businesses where they're just so early that showing profitability at this stage is crazy. I'm like, what? You've been around for a year or so. You should be profitable now? Amazing. Or the one saying, can you get to 1 million ARR ⁓ within your first year of launch?
Jeremy Au (19:49)
Thank
Yeah. Yeah.
Hmm.
Gita (20:03)
Or when investors now go, yeah, well, we want to take more than 20%. If you want to take more than 20 % and this is just not even your A round, I just don't know where it's going to go. A lot of investors are now asking that. And I think, again, this is why it's so important that if someone's been a founder before that they also go into the investor seat because so much of the investor...
terms that I'm seeing right now is very reactionary, right? It's a reaction to what happened. So they're trying to increase confidence in the Indonesian market in their Indonesian thesis, which is how they raise the fund to begin with by saying, these are the safeguards I'm about to do. But some of these safeguards are just, well, they're just very hard to do. Nor are those really the companies then that can then
Jeremy Au (20:30)
and
Gita (20:50)
make your returns worth it. Right? ⁓
Jeremy Au (20:53)
Yeah. I think I
was reading this interesting report by Deal Street Asia, and it was basically saying that VC funds raising from LPs, 2020-25, the first half of the year was an all time low for the past seven years. So basically it hasn't been this bad since effectively 2018, right? I think it's interesting, additional data point, think from my perspective is that I think one of the
Gita (20:58)
Mm.
Jeremy Au (21:15)
disasters from the e-fishing sites. I think it's also broken a lot of LP trust in VC funds. Of course, we're at interest high interest rates. Obviously, we have the global trade tariff, kind of like uncertainty and so forth. But I think this definitely didn't help at all. And I think that's important because I think when you open up the news, I think the newspapers are still talking about how governments focus on entrepreneurship, the next wave of startups. But I think
Gita (21:20)
Yeah.
Hmm.
Right.
Jeremy Au (21:41)
The
fact that VC funds have raised so little capital in the past, you know, effectively one and a half years, I think is a leading indicator that they are going to have very little dry powder to invest in, you know, kind of early and series A startups in the next, I'll say four years, because I mean, you know, the money that's being raised today is going to deployed over the next two to three years. And I don't think things will change dramatically or improve dramatically in the next one year. So I think basically, I think it's going to be lean times.
Gita (21:48)
Yep.
Hmm?
Jeremy Au (22:11)
for startups fundraising seed or series a for the next three years. I don't think it's fully understood yet by founders actually, because they know it's been tough for the past two years. And obviously they are fundraising now, I feel like I'm starting to hear the bell now a little bit, which is like, okay, the data has come in BC funds raising for LPs is all time low. That means two to three more years pain. So you got to, the story is like, want
Gita (22:16)
Several years. I agree. I agree with you.
Mm-hmm.
Right, right.
Jeremy Au (22:35)
It was like seven years of drought and seven years of famine. You got to know how long that drought is going to be.
Gita (22:39)
Yeah, right.
So as an LP now, one of the things that I try to bring to the table with the institution that I represent is that I also...
try to explain Indonesia, the region as best as I can with all of its flaws, but also where the growth opportunities are. And not just the typical, the macros look like this, blah, blah, blah. There are still pockets and areas of opportunity that maybe the average person just doesn't think about because a lot of LPs are not from Indonesia. A lot of the institutional LPs, right? Not a lot of them are from Indonesia unless they represent a corporation or sovereign or something like that. A lot of LPs
are actually foreign and this is what happens also when you invest into areas that you just don't know the context of. So you just see,
More than 50 are under the age of 40 years old, high social media growth. Therefore, it's going to be high consumption. You need to know the context and the nuance. I say that for every region. I say that about India. You need to know the context and what the government is doing, what public policies are there, why India today is very different from India 15 years ago, the strides they've made to make it more pro-business. These are elements that any investor needs to
And I think for the longest time, unfortunately, there was just a lot of hype and it was a lot of positivity and optimism, not backed by actual understanding of the context of Indonesia. So that's something that I try to bring to the LP table too, because we're responsible for making sure that GPs can invest and GPs are responsible for making sure that problems can be solved by well-meaning founders.
Jeremy Au (24:11)
Hmm.
Mm.
Gita (24:26)
all have a part to play, right? One is not quote unquote more important than the other, but it does start somewhere. The capital starts somewhere. I think it's that like we all have a homework and we all need to do our homework. And for GPs is balancing between
you know, making the requirements so hard that you end up not innovating. You end up just investing into things that are proven track record can make 2.1 or whatever it is that you decide your new DPI should be or your new IRR should be.
And a lot of them will just be a typical type of company solving very common problems. But I think this is where the opportunities lie. What about in things that people don't see? What about in technologies that still have a lot of potential that we're not talking about? Yeah.
Jeremy Au (25:06)
Yeah.
one observation I'm starting to make, I think we were the earliest people to call for an investigation to eFishery.
Gita (25:19)
Yeah, I was like, detain!
Jeremy Au (25:22)
I think the level of GP representation on startups is something I'm starting to notice.
needs to change, especially at the early stage. And I think what I'm starting to notice now is that I think, let me give you these bullet points, right? I noticed actually a lot of maybe they didn't give up bot seats, which is okay, fine, that's okay. But I think if you have a bot seat, you better name somebody to it, because I've seen a lot of GPs who are not using the, don't have somebody on a bot seat at all. So effectively,
Gita (25:30)
Yep.
Okay, that's, yeah.
Jeremy Au (25:49)
You supposedly have one bot CR3, but nobody's on it. And three is if they are on it, they're not clued in or they're not, you know, kind of like don't have that very clear read in on the company. And so they to be blindsided, So there's a lot of like covenants around, you know, like, Hey, financial damages, blah, blah.
Gita (25:56)
Yes. Insight.
Mm-hmm.
go. Yep.
Jeremy Au (26:06)
But not very much building world. the reason why I think I see this actually is because basically why it hands up is like the GPS that I'm starting to see, obviously I also understand their perspective, which is they're overwhelmed, they're busy. There's lots of companies, maybe some of them have, know, have an index approach is rather than a, you know, concentrated portfolio approach.
Gita (26:07)
Mm-hmm.
Yes.
Yeah. Yeah. Sure.
Jeremy Au (26:26)
But I'm just saying, I just feel like there's a lot hand washing after the fact.
Gita (26:30)
Yep. I've been thinking
talking about board seats. This is why when it came to the other case, so there was this case with Tony Hub and they arrested people on the board. But the thing is, I've been on board seats before and I can easily say.
A lot of board members are not privy to a lot of data. Everyone assumes that, I wouldn't say everyone, but I guess if you don't understand how startups work, there's this assumption that if you're on the board of startup, you must know everything that goes in and out of the company's financials. No, actually sometimes not even the CEO is always privy to that because the CFO is the one who...
does the transactions, right? I mean, depending on the amount, of course, if it's like a $50 SING transaction, yeah, maybe there's a good chance the CEO is not paying attention to that or, you know, that's privy to the CFO. But there's a lot of things that a typical board, especially an investor or a GP, simply wouldn't know. And I think, again, questions on transparency of the case, like what's happening with the case. They say it's potential corruption, potential...
money laundering, but again, none of us know. To be fair, it's not like Tony Hub did a Bloomberg interview to confess everything. I mean, at this stage, it's a lot of assumptions. But all I know is that it's very suspicious to me why.
you know, people bring in board members or investors because I know a lot of investors are not privy to, you know, the real details that happen inside a company. Because also there are rules on that. It's not always that we're supposed to get the day by day play of what happens in a company's financials. So I think...
You know what? think what you said earlier about board, I'm very big on not just results. I'm actually bigger on process than the final result, because the final result is a number that in the end, lots of people can play with. The process is something that you can track as you go. Right. And we're just looking at that transparency of process.
Jeremy Au (28:13)
I agree.
Yeah. I mean, I think the board has a responsibility to make sure that your quarterly board meetings are done. metrics have been reported. you let junior executives speak, right. To you know, piece, that you get, you know, understanding of the personnel movements, I mean, these are all processes, but I just feel like, you know, we, I'm just looking at it and I think that's something I see. think another thing that I'm.
Gita (28:31)
sure.
Yeah. Yeah.
Jeremy Au (28:48)
actually encouraging and starting to think of, and it's actually kind of like looking at the concept of operating partners, on the private equity side. I think private equity, think there's a like, hey, we are financial operators and once we buy the companies, we're not going to know how to ride in a tire repair shop. So we need a CEO to be an operating partner to take care of the business. And I think there's a very clear bifurcation.
Gita (28:54)
Mmm. Yeah. Yeah.
Yep. Yep. Yep.
Jeremy Au (29:10)
I think the operating partners is a very strong differentiated niche where they actually have the experience, but also have the trust to actually get stuff done, right. Especially in the U S and I think we don't really see that in venture capital. and especially in Southeast Asia, I think, it's almost like look down on, right. it's like a dead end job and maybe there's a starting to be emergence of what I call like, portfolio support of management, you know, like associates to.
Gita (29:12)
Yeah.
Sure.
Jeremy Au (29:30)
support junior value, but not really have any real authority or credibility or experience
Gita (29:31)
Sure.
Yep, that's the big one. There's no real incentive for funds to have that kind of operating partner model. I totally agree with you because again, there's still always this disconnect if you have a non-founder ⁓ becoming a GP and then eventually having to manage all of these companies. So again, for anybody who doesn't know this,
Jeremy Au (29:50)
Hmm.
Mm.
Gita (29:58)
A GP can have like 10 board member seats, right? Depending on the size of the fund, depending on the companies. And most of the time a GP probably goes to a board meeting only every three months. They're not necessarily privy to every single thing that happens every day.
Jeremy Au (30:02)
Yeah.
Mm. Yeah.
Gita (30:16)
That's not a thing. Sometimes you show up to your quarterly board meeting and you go, wow, you've grown so much. Wait, what's the problem? And then maybe sometimes you end up becoming the tiebreaker for a vote. But it's not necessarily true that the GP will know every single thing that happens every 24 hours. So I think that's, yeah, I think that's where the value of an operating partner, as you said, comes in.
Jeremy Au (30:40)
Yeah, I think basically what I just trying to say here is I think, I think we understand the U S approach of like high home runs Obviously they still exist, but I think in Southeast Asia, we said acknowledge that home runs are both smaller. The middle class of startups in your portfolio need a lot more support and failures at the bottom, right?
Gita (30:48)
not like this, yeah.
Yeah.
Jeremy Au (30:58)
to some extent, there's a little bit more of a structural incentive towards operating partners to help. I mean, lower the load because you know, investing partner, you still got to meet people and let's be super real. Like the kind of person who's really good at hands on and helping people walk through and say, okay, guys, this is the process to do your board deck. It's a very different person from the person who's going to be doing financial analysis. And that means there's a different skill set, know, and personality.
Gita (31:01)
Yep.
Right. You have to raise every day. Yeah.
Hmm.
Yeah.
Jeremy Au (31:20)
Once in a blue moon, there's some founder who's become a VC who's still willing to do both and go ahead. good for them. But I think for most we just need to acknowledge that, you know, we can't expect the GP to be superhuman. Uh, but we also understand that the market reality is you need
Gita (31:24)
Sure.
Jeremy Au (31:34)
somebody to really help them. And we can't do it with a mid-level PO cost support manager who's supposed to be a ticket manager of inbound queries or occasional talent support, occasional communication support. know I mean? Like, you know, so I think that's where the specialization needs to
Gita (31:43)
Yeah, totally.
Yeah.
Yeah, I agree. You're right. No, I think, again, funds may also benefit from just having more experienced operating partners, but there needs to be incentives already built in. And therefore, that's probably going to change the game. That's probably going to change how the ecosystem grows in the future, because the way we've done it until now, it's not always working.
Yeah. And I don't know, Jeremy, I think for people like you and me, there's, there's a lot of benefit with us, you know, still sitting in the ecosystem, still looking at things, maybe taking on different roles within the ecosystem. just to bridge that gap, because I still feel until today, there's just this gap between founders, GP and LP. and now that I've been a founder GP and LP.
I really see the gap and the differences in expectations. Yeah. And there just needs to be better bridging.
Jeremy Au (32:38)
Yeah, I think at the end of the day, it's just gotta be, um, there needs to be an operating partner equivalent with enough credibility with credibility and if needed authority on either side, but also be able to be a facilitator as
Gita (32:53)
a lot of Indonesian founders also keep thinking that GP are this glamorous job where you just raise a lot of money and then you can invest and you get management fee and that's so cool. And I'm always like, okay, GP in a way is also a founder and they're founders of a fund, right? Because they have to raise for something that hasn't existed before. So even if you raise for funds one, two, three, four,
Jeremy Au (33:08)
Yeah.
Gita (33:18)
Fund 5 has not existed when you're raising for it. So in a way, a GP is also a founder. And I think if GP and founders can look at each other in that way, in this emerging market, there's probably going to be better collaboration because people just need to communicate better. I think this is what I've been saying about, you know, whether it's some crazy case, whether it's, you know,
Jeremy Au (33:30)
Yeah.
Gita (33:41)
data and economic growth, whether it's anything else, just communicate better, you know, just have better process and transparency and systems for accountability. I don't know. Yeah.
Jeremy Au (33:52)
Right. Yeah.
Yeah. Yeah. I mean, I think we all know what an end state is, but the process that we all agree on is we need somebody who's actually has two eyeballs to really, you know, focus on it. per company, I don't think you need 10 or 20 or 40. don't think we're making them a fractional executive, but we're just saying
Gita (34:07)
No. Right.
Jeremy Au (34:09)
Are they distracted in that meeting? Yes or no. Right.
Gita (34:11)
Yeah.
Jeremy Au (34:12)
they know how to layer and prioritize and support their companies, Don't get me wrong, I think there are some funds that do a good job doing both kind of like the board management. I think they tend to be experience, but it's not for everybody, right? And I think it's a tricky part. On that note, Gita, any positive words, maybe like, is there like a...
Gita (34:20)
Yeah. I agree.
There you go.
Yeah, and that's such.
Jeremy Au (34:31)
word or phrase that you want to leave this episode with.
Gita (34:34)
By the way, I wanted to add in, that's a trend I'm seeing right now that's succeeding quite well, which is a focus on something like a, we are a fund that does early stage healthcare, something in this region or Agri something. And it's just much more focused and you're right. It does lead to smaller portfolios, but they're
Jeremy Au (34:36)
Yeah.
All right. Yeah.
Gita (34:55)
maintain, monitored and manage in a much more focused way. You're absolutely right.
Jeremy Au (34:57)
Yeah. Yeah.
Gita (34:59)
And I think that's the part that makes my parting words hopefully helpful is yeah, now that the world seems to be getting crazier, actually what's bringing me a lot more comfort is just the focus. Focus on the market that you know, that you've always been passionate with. I mean, I'm sorry, we're back to square one, but just focus on that. And as long as you keep focusing on it and you keep building for what you focus and you know, and you care about.
eventually, you know, things will look up.
Jeremy Au (35:28)
Yeah. Uh, on my end, guess the phrase I would leave for you folks is, may you live in interesting times. No, but I mean, it's startup land. always, we always live in interesting time. If you wanted a boring time, you would be, you would, yeah, would have you'll be in a multi-national corporation, taking a stable job and you know, you know exactly what metrics you need to have.
Gita (35:35)
No, Jeremy! That's true. That's true. You wouldn't be, you wouldn't be there. That's true. I'm still here. Look, still here. That's true.
Jeremy Au (35:53)
And I think we just, we all live in interesting times. So I think there's a, um, I'm going to get butchered this, but it wasn't that a lot of the rings quote, like, you know, Gandalf goes to Frodo and Frodo is like, Oh, I wish we didn't live in such terrible times. And Gandalf was like, it's not at us to choose what times we live in, but you know, we get to choose what we do in these difficult times. Right. Again, uh, the quote I gave is totally butchered. I'm probably going to get a correction order.
Gita (35:54)
fair. We do.
We do.
Jeremy Au (36:20)
from Lord of the Rings Okay. Alright. Peace out. I'll see you around.
Gita (36:22)
All right,
see you.
