#57: Inside Singapore's Leading Venture Capital Firm - Chua Kee Lock, CEO of Vertex Holdings

What were some of the industry trends that you were seeing that you thought that, wow, America is really at the forefront of innovation?

In our business, in terms of investing, it's important to remember that essentially there are four stages.

First thing is about creating a network, looking for the right idea, right things to back, right entrepreneur, and right team of people.

So that first stage involving you create as much network as possible means that ecosystem have to be relatively

healthy, yeah?

Second

part

of the venture capital is essentially involved after you identify some potential new idea, exciting idea, you have to perform sufficient due diligence, question yourself whether this makes sense, this product makes sense, this market makes sense, all the people is going to be able to capable of delivering the right solutions.

So you have to go through that whole due diligence deliberation yourself or together with your more senior colleagues and come to the right conclusion.

And let's say assuming the conclusion is to invest, then you have to go through a whole documentation phase of legal documentation and subsequently you invest in the company.

The stage three, which is after you invest in a company, in any startup, whatever can go wrong always will eventually go in the wrong direction.

And as an investor, of course, don't say I'm too young.

I'm an associate, a mentor, which is a much older partner.

He'll be sitting on the board, working with an entrepreneur, working with him or her, figuring out how to, you know, steer the company in the right directions, that stage is equally important because it takes about, you know, maybe perhaps five, seven, eight years to build companies.

You need to raise many, many rounds of financing thereafter.

And of course, the last one, which is equally important is at some point in time, you need to figure out when to get exit because you need to generate returns for the investors.

So coming back to your questions, one of the very early days that you discovered in the Silicon Valley because of the fact that they were able to develop that ecosystem very quickly, partly because there was a lot of immigrants, a lot of sophisticated venture capitalists.

That networking, that context, that so-called relationship is very much vibrant.

You were talking about Singapore in the early days, we don't really have that because you don't really have that funding ecosystem, don't really have a lot of people willing to start a company.

Or even if, let's say, you want to get people to help you do certain things like building a software and so on and so forth, it's very difficult to find such people.

One of the biggest, you know, important ingredient of any venture capital is to have that whole ecosystem of an early stage investor, entrepreneur, and the whole support system around it.

One of the interesting things that I've, as I've read about Silicon Valley history is that, you know, the early wave of venture capitalists were very engineer heavy, meaning that a lot of them actually were very deeply involved in science or the rise of the semiconductor within the US.

And you yourself were an engineer by training.

I wanted to understand like, you know, what about your background as an engineer that gave you maybe insight as to how technology would develop? Engineering

is important because, you know, for if you are investing in technology sector, very first principle, you have to be knowledgeable.