At Telescope Investing we focus on publicly-listed stocks, but investing in private companies is another option for investors seeking higher returns, and this is becoming increasingly accessible to retail investors through crowdfunding services. On this week’s pod, we're joined by award-winning entrepreneur and founder Prantik Mazumdar, to get his insights on private equity and venture capital investing.
Prantik brings his extensive experience working with local enterprises in Singapore and as a business owner to the world of angel investing and venture capital. In a wide-ranging discussion, we talk about the key trends in the SE Asian startup scene, the qualities he looks for in private equity investments, and the personal and financial rewards of investing in sustainability.
For companies at such an early stage of their life, there is a heightened emphasis on leadership. One of the key principles is founder-problem fit - the key question of whether founders are not just good founders, but have suitable skills and experience for the problem they are trying address? What are the dynamics within the founding team, do they have complementary skills and aligned values? Does the underlying equity structure give all the partners the right incentives, and are they able to attract key personnel to achieve their vision for the company?
How large is the problem set the company is trying to solve and what is the total addressable space they are targeting? Is there a strong product-market fit to drive revenue and customer growth? Do they fulfil the "3Rs" to scale quickly - the ability to Raise capital, Race for growth and Remove competition? Less than 10% of private companies have a good exit, and it is important to understand the risks and diversify your investments accordingly. Give yourself time to understand the businesses and to build conviction.
With climate change becoming an increasing focus for many governments, investing in sustainability can be a force for good and a force for growth as new companies emerge in areas such as ed-tech, alternative meat and clean energy. These nascent industries are not just good for the planet but may offer high investment returns and are seeing huge interest from venture capital.
Some of the companies mentioned in the discussion are Byju’s, Float Foods, Eat Just, Stripe, UiPath, Apeel, and of course SpaceX.
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