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Meet the Members – Paul Margaillan

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Who are you?

 Paul is the owner / founder of Space Management Services (SMS) which offers a variety of exciting spaces, products & services to an ever diversifying clientele. Prior to setting up the SMS group Paul ended his 13 year term in late 2012 as CEO and co-founder of Easy (Ez) Revenue Management Solutions, headquartered in London, United Kingdom. Previously Paul served as Senior Vice President of the TIMS Corporation (Optims) from 1994 – 1999 and helped lead this organization to become the European leader and supplier of Revenue Management Solutions & Services to the hospitality industry.

Trained and educated within the business & hospitality sectors, Paul is widely recognized as not only one of the leading CEO’s of this era but also as one of the genuine experts in Operational Revenue Management & Demand Forecasting techniques. Paul succeeded in combining his diverse business expertise with the latest innovative ASP technologies, the EasyRMS client portfolio grew to almost 1,300 hotels under his leadership until the company was sold to a private US technology giant at the end of 2012 in a record all-cash deal. ​Paul has also served as Non-Executive Chairman of McLaren Technologies​ since 2014.

How long have you been doing angel investments and how do you do it?

​I have been in angel investing since early 2013 and currently have over 20 active investments in play. Generally I invest in conjunction with HNWI networks in Europe, USA and Asia Pacific. I also have some direct investments in companies who have approached my organisation (SMS) directly.

How did you get into it?

​When ​I was lucky enough to exit EasyRMS after 13 years of what can only be described as ‘hard slog’ I decided that I wanted to help other startups and growing organisations navigate their way through the pains of business growth, ultimately then to achieving a successful exit, thus the birth of the SMS platform. I have had the honour of mentoring many budding CEO’s over the past 5 years and assisting with successful exits in parallel, there is nothing more satisfying than seeing these guys cross that final hurdle.

What sectors do you like?

​My current investment portfolio is extremely divers ​with inclusions from FinTech, Cryptocurrency, Online Retail, Traditional Retail, Entertainment, Property, Travel / Transportation and Fine Wines, to name just a few … My motto is to review “Any Idea at Any Time” …. you never know where the next great opportunity is going to come from!

What are the key criteria when you look at an opportunity?

​- The Idea

– The Opportunity / Competition

– The Management Team

– The Business Plan

– The Figures​

Where do you find your opportunities?

​Opportunities come ​from a variety of sources, VC’s, networks such as BANSEA, direct approaches to SMS, friends, family…etc. It really is true to say that there is ‘Opportunity around every corner’.  Picking the right ones to spend further time (and money) on is the secret and ultimate key to success.

What is the main challenge in this activity?

​Time! ​With so many opportunities presented on an almost daily basis, finding time to review plans in the detail they deserve is tough and one of the main challenges faced by every individual investor today. I am sure that both I and many other investors have missed golden opportunities by not spotting the initial pot of gold, often this hidden deep within a strategy and not even known by the founders themselves in the initial stages. Institutional investors face the same challenges but have more resources to allocate, even then golden opportunities slip through the nets on a daily basis.

Tell us your memorable experience or success story.

​Mattresses! ​We are so focussed on technology investments in this day and age that we often forget the more simple things in life. I was lucky enough to invest in the early stage of a mattress company in Europe who recently went through IPO, resulting in almost a three digit on my initial investment …. not a bad day at the office on that one! On the flip side, I was presented with an investment opportunity a few years back which I decided was not for me, the plans were loose and presented high risk at best, my gut instinct said go for it as I liked the CEO and thought the concept was solid, but my head stopped me moving forward due to the weakness of the paperwork. That particularly company recently sold for an amazing multiple, I would have made back several hundreds of times my initial investment …. you really just can never tell!! The moral, spread your risk, diversify and always go with your gut instinct, this often is far more reliable than business plans alone!

Member’s Code of Conduct Policy

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We, the members of the BANSEA, in recognition of the importance of our investments and related activities in affecting the livelihoods of others, and in accepting a personal obligation to our peers and the communities in which we act, do hereby commit ourselves to the highest ethical and professional conduct and agree that every member of the Network is expected to comply with this Code of Conduct.

A member shall, in respect of any Angel investment, or related activity in which the member is an actual or prospective investor or advisor, comply with the following standards of conduct:
Members shall act with honour, integrity, dignity, diligence and in good faith in order to merit the trust of their peers and of the community.
Members shall act with honesty, equity and without discrimination towards all individuals in the community.
Members have an obligation to be ethical in judgement and actions.
Members shall not take improper advantage of their position as an actual or prospective investor, or advisor.
Members shall, where relevant, take reasonable steps to inform themselves, their peers, their portfolio companies and their advisors, of the social, environmental, economic and other possible consequences which may arise from their actions.
Members shall not make improper use of information acquired as an actual or prospective investor, or advisor.
Members shall promptly and properly manage any conflict of interests which may arise.
Confidential information received by members in the course of considering, making, or advising on an Angel investment remains the property of the person or company from which it was obtained and it is improper for the members to disclose, or allow to be disclosed that confidential information, unless that disclosure has been authorised by that company or person from whom the information is provided, or is required by law.
Members shall not engage in conduct likely to bring discredit upon their Angel investments, their peers, or the Association.
Members have an obligation, at all times, to comply with the spirit, as well as the letter, of the law and with the principles of this Code. Members shall not assist in or induce a breach of this Code and shall support those who seek to uphold the Code if called upon, or in a position to do so.
Members will respond promptly, fully and honestly to BANSEA research of Angel investing. All information gathered in research by the BANSEA, or its nominated agent, will be treated in accordance with this Code, the BANSEA Privacy Statement and presented in results of the research as anonymous, aggregated data.
Members will respect and be cognisant of the confidentiality and copyright of all documents and materials provided by the BANSEA, by BANSEA affiliated Angel groups and by suppliers, partners and other Angel associations that deliver to members information, materials, education and advice via the BANSEA.

Meet the Members – Sam Tsui

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by Donna Daritan

How long have you been doing angel investments and how do you do it?
I have been investing for over 20 years, but I only recently began investing in younger, non-public companies.

How did you get into it?
As part of my former role with Microsoft, I’ve met many fantastic companies over the years from the US, China and Southeast Asia. However, many of them were at a scale that was well beyond the typical angel investor. I recall having conversations to try and buy/invest in Facebook when it was only valued at US$1B. Since then, I’ve continued to look out for companies that could disrupt the traditional tech giants as well as more traditional businesses. There is a lot of great talent and ideas out there.

What were you doing before?
Previously, I was looking after business development for Microsoft’s applications and services (Office, Skype, Messenger, Bing, Ads) across Asia. My focus was not on how these products services could attract the next 1M users, but rather 10M or 100M users. The scale was simply much different.

What sectors do you like?
I am a fan of productivity, communications, commerce platforms, machine learning, big data and ad tech.

What are the key criteria when you look at an opportunity?
First, I look at the product to see if there is any real technology. Second, I look at whether the product/service will really change user/consumer behavior. Lastly, I look at whether a company/product and the team has the opportunity to scale.

Where do you find your opportunities?
Mostly through my network of contacts, but I also find some ideas at the local accelerators.

What is the main challenge in this activity?
The biggest challenge is finding enough of an idea/product or service/team that really sparks my interest. As a pragmatic person, I can always see a million ways why a company/idea won’t succeed. However, sometimes, you hope the market, tech, team are strong enough to make a leap of faith in.

Tell us your memorable experience or success story.
Back in school at the University of Illinois, I visited one of my friends at his lab in the Computer Science department, and I recall seeing the early versions of Mosaic, one of the first web browsers. Although it wasn’t pretty, I knew this would change the world. A couple of years later, a former U of I graduate named Marc Andreessen who was one of the original Mosaic authors, created Netscape, took it public and eventually sold it to Yahoo.

What will be your advice for any start-ups that would like to talk to you?
Have a clear understanding of why your company/idea is different than the products/solutions available in the marketplace, understand your limitations/weaknesses and where you need help, especially from an investor.

Meet the Members – Balaji Chakaravarthi

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How long have you been doing angel investments and how do you do it?
I have been involved in angel investing for past 10 years in terms of capital investment and started being advisor and mentor for start-ups for 1.5 years.

How did you get into it?
My background is in healthcare and I am especially interested in MedTech. Started Angel Investing to support couple of friends, who ventured into entrepreneurship. With recent fast growing start-up scene and vibrant eco-system in Singapore, I decide to be more involved in investing in Healthcare start-ups as an angel and advisor to contribute my expertise.

What were you doing before?
I have been working in health care industry for over 25 years. As the APAC business head and part of senior leadership team of a large multinational, I had great opportunities to be exposed to global developments and new technologies in this field. Now I have set up my own strategic consultancy firm after I left the corporate position.

What sectors do you like?
I am a fan of MedTech, with interest in IT and tech with slant towards healthcare.

What are the key criteria when you look at an opportunity?
Firstly, I will assess if the company’s solution is unique and scalable in the market. How big is the market size? How strong is the management team? What is its track record? How much value can it bring back to health care industry? Is now the right timing for the solution?

Where do you find your opportunities?
In addition to BANSEA and my network of contacts, I find some ideas from the accelerators, research institutions, such as ASTAR, NTU.

What is the main challenge in this activity?
Angel investing has higher risk than most investment channels because it consists of many subjective decisions. Therefore, it is essential to structure our thinking process and make proper qualitative assessment.

Tell us your memorable experience or success story.
I have started mentoring a company recently with proven technology but small turnover. After undertaking my advices to improve its commercial strategies, the company has gained traction and at the verge of closing a 10 Million plus funding round!

Approaching Early Stage Valuation

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by Jose Camacho

One of the the most – if not the most – debated topic when it comes to investing in startups is their valuation. Many methods and metrics have been invented to discover the value of a company at a given point in time, often subjective and subject to interpretation. The truth is that the price paid for a company or an investment, mostly reflects a consensual agreement, a common ground between the maximum price an investor is ready to pay for a perceived future value and the minimum price for which an entrepreneur is ready to sell its shares. if there is an overlap between both visions, the investment happens.

Reaching agreement on price demands more psychology and negotiation skills than technical analysis, this is even more true when it comes to valuing startups but one needs to start somewhere.

Size matters, but not only

In financial markets the price of listed companies is determined by the market, listed companies are generally very large,  established with recurring revenue and predictable margins. Hundreds of financial analyst are constantly looking at the stock price, for a company like Google it is not uncommon to see more than 2 million shares exchanged on a single day. Market price is assumed to be the best approximation to the true value of a company. Assumption that is of course limited as markets can be irrational as well.

Private companies are more difficult to value as the shares are not freely traded and there is significantly less scrutiny on them. For the large and established, it makes sense to compare them with other similar companies (for which we know the value). this method is generally called the comparables method, in which certain metrics are compared, for example the revenue, or the operating profit or EBITDA are generally established metrics to compare.

The issue arises when there is not much to compare, either because there is a lack of metrics (no revenue, no ebitda, no traction) or because the business model is so innovative that there are only very few companies that could be compared. Unfortunately angel investing combines both issues making the price discovery more complex.

What do do then?

Establish a basis of discussion and validate the rationale: generally, entrepreneurs have an idea of the value of their company  when they approach to investors either because of their expectations (which could be unreasonable) or because they have (hopefully) a better understanding of their sector.

Having a good understanding of the rationale for their valuation allows often to select those entrepreneurs that have done their homework.

Do your homework: While many companies claim to be truly innovative, disruptive and unique, chances are that they are not that different and it is likely that there might be a few others, perhaps far away working on the same product, service or type of customer. Nowadays, the abundance of websites tracking transactions and investments in early stage companies has reached an acceptable level of maturity in developed markets. there are a number of providers that can give access to valuable information and perhaps to identify similiar ideas or investments which can be used as a guidance for the value of the company you are looking at.

Ask your peers: People are generally happy to to disclose the performance of their good investments but not always happy to disclose the price they paid for it in the first place. However, it is generally a good practice to check with other investors whether they have seen comparable companies. Collective intelligence becomes very useful in these situations and one can learn a lot from others successes and mistakes.

Look at the big picture
Angel investing is about supporting great ideas with huge potential, keep in mind that you are going to support the entrepreneur in his journey. He is taking much more risk than you are and you are both hoping to win at the end. Identifying the right value at a given point in time is important but certainly less important than defining the strategy and executing the idea.

Some investors use the valuation discussion to educate themselves about the industry and discover the entrepreneurs vision and capacity.

Meet the Members – Sam Gibb, CFA

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by Donna Daritan

How long have you been doing angel investments and how do you do it?
I started to get involved in angel investments in the last quarter of last year.

How did you get into it?
After spending a bit of time in San Francisco and experiencing the vibrant start-up scene there, I started thinking about the opportunities in Singapore. I realised that the government had decided that they wanted to develop the start-up scene and were throwing a bit of money at it in the form of grants and investments. o From time to time, I like to think about where I’d like to be in the future and what I might regret having not done, knowing what I know now. Considering my background and personality, I figured I’d be disappointed if I didn’t get involved with the angel investment scene if the government was successful in creating an ecosystem here.

What were you doing before?
It’s not like I’ve given up my day job to become an angel as I’m an investor by trade. I look at angel investing as another asset class, as a means to be able to access ideas or themes that I believe have potential and don’t see it as something completely dissimilar to what I’m doing on a daily basis, although the themes vary somewhat.

What sectors do you like?
I am a fan of productivity, communications, commerce platforms, machine learning, big data and ad tech.

What are the key criteria when you look at an opportunity?
There are a number of other things that I’m looking for as well that are more difficult to quantify. I’d say that I have more of an institutional process because of my previous experiences, which I’m trying to dampen somewhat because of the nature of angel investments. I’m still building the quantifiable aspects that I look for but so far I have:
– Unique idea that could change the way we look at things, something that
– Low egos of the founders, with a high level of focus and belief in the mission
– Economies of scale for the product that they’re aiming to create would be obvious in hindsight that they’re trying to accomplish

Where do you find your opportunities?
Talking to people and being involved with angel networks at the moment. As I mentioned above, I’m currently spending a lot of time building out my networks in the hopes that some of the better ideas will be filtered through to me in the future.

What is the main challenge in this activity?
Two challenges:
– Changing the way that I think about investments from a more linear process to being exponential.
– Creating different methods to manage the risk inherent in angel investments.

Tell us your memorable experience or success story.
The health food company that I invested in while at the hedge fund in New Zealand went on to realise a 44% IRR when exited after my departure. The outcome was the result of having a reasonably good management team, great product and some favourable timing. We were just lucky that we were able to participate in their good fortune.

What will be your advice for any start-ups that would like to talk to you?
Be honest – About funding requirements and risks with the business. Also be honest with yourself, are you creating something unique that could add value to society that you truly believe in or are you just doing something to pass the time.

Early stage investing – the opportunity in South East Asia

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by Jose Camacho

The early stage scene in South East Asia is booming, for those even remotely involved in the Singaporean ecosystem this is not news. In 2015 it has been challenging not to be overwhelmed by all the demo days, pitch events, open house, showcases, entrepreneurs’ drinks and other networking forums, reaching sometimes more than 20 events every week. The number of accelerators, incubators and early stage investment funds keeps increasing and bringing with them a myriad of service providers, accountants, intermediaries and experts of all sorts. We finally see the emergence of an ecosystem rich in diversity, talent and capital.

The ideal positioning of Singapore as a hub also for innovation is clear, and the emergence of South East Asia as a single large market driving regional growth are attractive arguments for international investors to seriously look at South East Asia. In 2015, several international Private Equity and Venture Capital funds have set foot in Singapore or allocated capital to South East Asia, some of them looking at very early stage companies. In parallel the activity of private investors or business angels is tangible and increasing, generally individuals with significant wealth (accredited investors), some capital available and willing to trust and support promising entrepreneurs directly. In BANSEA, for example, the requests for joining has more than tripled by the end of 2015 and the group has more doubled in size.

All these are positive news, and strong signs that early stage investing in South East Asia is a clear opportunity. However the long term success and existence of an early stage ecosystem, highly relies on the quality and diversity of capital available. While a substantial number of institutional funds is necessary to build world class companies, it is critical as well to make sure that private individuals and their capital continue to play their role, after all, even the most successful global companies (Uber or more closely GrabTaxi) were lucky enough to encounter, at some point in time, one or few trusted angel investor that saw the potential of the entrepreneur and their idea.

Many of today’s entrepreneurs have found their vocation only recently, leading them to quit their sometimes well paid corporate jobs to build a venture, the surge of fintech is a good example as many bankers have become fintech leaders. In parallel a new generation of investors is preparing – senior executives, successful traders or senior bankers among others, want to put their brain and capital at work and proactively engage with entrepreneurs.

While many of those new angel investors are still in the learning phase, building their network, sharpening appetite and experience, the competition for good investments is in place and will keep increasing. The blossoming ecosystem quickly becomes a jungle for those who do not know how to navigate.

Meet the Members – Ville Ohman

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by Donna Daritan

How long have you been doing angel investments and how do you do it?
Ville Oehman, a startup investor and entrepreneur, originally from Finland. I started investing in startups about 10 years ago, first through family business and later privately. My interest has been driven by the love for, and genes of entrepreneurship, and I’m a strong supporter of SMEs as the engine of economy and jobs creation in any country. Entrepreneurs can be successful and create a lot of value for themselves and society without making a billion dollar exit to a multinational PE group.

How did you get into it?
My family background is in healthcare, and I have a technology / business education, so I naturally got into MedTech first, but then evolved to FinTech around 2010 and to cyber security in 2015. I kind of moved towards an active investor role from an operative CEO along the way.

What were you doing before?
I did some consulting before, but I really like the informality of startups. To put it the other way around, I see terrible waste of resources and talent in large organizations, where people focus on optimizing their internal benefits and avoiding mistakes. I like the approach of “don’t ask for permission, ask for forgiveness if something breaks up”. People need to realize that the biggest risk is if you never take a risk.

What sectors do you like?
Currently, I’m focused on FinTech (bitcoin and blockchain), precious metals (gold and silver), Islamic Finance and cybersecurity (dark web). In my mind, these are all part of the same massive shift in the financial industry. The problem is that FinTech is becoming too hyped a term, with lot of people without any core knowledge cruising around for funding. First, learn what money is and how banks work, then start thinking about opportunities in FinTech.

What are the key criteria when you look at an opportunity?
Right timing, unique technology, positive and empowering change. I’m not really interested in ideas that drive people spending more and more time in front of the TV, or that are based on people feeding every last detail of their privacy to an insurance company via their smartphone. The founding team is an important factor. The need to be able to adapt and change if needed. If you can prototype, do it. If you can bootstrap, do it. If you don’t need money, don’t take it. The founding team needs to have strong sense of a mission.

Where do you find your opportunities?
I read a lot, listed to talks of industry leaders and follow the sectors that I’m naturally interested in, because it’s easier to put in long hours if you are genuinely interested in something. Sometimes I get frustrated if nobody is doing something that I think is waiting to get done, and I launch a venture myself.

What is the main challenge in this activity?
I’ve noticed that many times entrepreneurs don’t actively mobilize their investors to growing the business. Startups should actually require that in addition to funding the investors use their connections for the benefit of the venture. One challenge on the investor side is that many try to make ‘riskless’ investments by offering insane terms in exchange for funding. That ends up killing the entrepreneur spirit that the investor is supposed to cultivate. If you don’t like risk, don’t invest in startups. It’s ok to require a lot from the founders and company, but it’s cheap to trick them to signing draconian terms.

Tell us your memorable experience or success story.
Ten years ago I gave seed funding to my friend who was an ex professional poker player, when he wanted to start a business. Now we are applying for a banking license for the same company in Europe. Big dreams and dedication create value.

What will be your advice for any start-ups that would like to talk to you?
Connect on LinkedIn and send me email. Preferably before you launch the company.