5 mins read

Startups’ Fundraising Mindset and Awareness in Malaysia

August 28, 2023
KarSin Ng, Head of Global Innovation Exchange MRANTI
5 mins read

Today, let’s skip the discussion about how Isaac Newton discovers the law of gravity , the famous law that everybody discuss about — rather, let’s look from another perspective, the apple dropped to the ground simply because it has reached it maturity — it’s the right timing.

I want to apply this analogy into fundraising in startups. Are we looking at the right problem? There have been debates on the supply chain issues, challenges, problems, bottlenecks of fundraising in Malaysia.

VCs been saying they struggle to raise funds and have difficulty finding the potential startup to invest to begin with, investors said they have no confidence in investing in venture capital, startups says there is just not enough venture capital, I believed all of them are valid to some extend and there are truths to it.

If we are clear about the root cause of the problem, why are we still not able to tackle or improvise this for the past 10–15 years in Malaysia. I want to draw your attention that startups’ potentially the pinnacle of the problem.

I believed we’re at the right timing, our VCs, startups, investors and ecosystem are beyond maturity. Are we looking at the right problem at the right timing?

There are many great minds in the startup ecosystem who has been around figuring how to resolve the fundraising challenges for the Malaysia market. There are great idea such as removing the barriers for start-ups to list on Bursa and heavy lifting duty by suggesting investment bankers to rethink how they can “sell” the start-up story to the market and find ways to ensure that good, late-stage start-ups can be listed on Bursa.

However, does our startups well-versed with the fundraising journey and jargons? What are the tipping points of fundraising from angel, pre-seed to series E,F,G, which could potentially lead to a successful exit or failure. Do startups really know how to deal with it or it’s based on others’ opinion, gut feelings or rely on the VC’s advice?

Just a few pointers for thoughts, does startups understand the different terms of investment, how are these impacting the future of their valuation and dilution? what about equity ownership, liquidation preferences, and board seats. What is their right deal to offer for VC? knowing how to negotiate terms that align with startups’ long-term goals but not short selling their company’s shares to VCs. Before fundraise, does startups know how investors often want to see evidence of traction, whether in the form of user engagement, revenue, partnerships, or other meaningful metrics.

I doubt we have statistics that tell us how many of them are equipped with the above fundraising knowledge and eventually successfully exited in their next 10 years? What are the odds of those startups who fundraise find this a smooth sailing experience?

After spent couple of year in the startup ecosystem offering various resources in accelerating startups in Malaysia … it come to a point I feel startups are born fundraiser and naturally they will know what to do. they seldom request or arise the need of the Skill of Fundraising or Fundraising Skills, which in my opinion is important for them to comfortably do their fundraising.

But are they? or are they not?

Simply because not many talks about this, this skill is deem not important and not required.

Does it really means it is not important? or we don’t know what we don’t know

Are there too little awareness on the importance of fundraising skills. Amongst the startup ecosystem, who should be the one to lead or bring awareness to this topic. I guess the VCs will not be interested to educate as they have their own agenda and interest in this investing game. Whereas, startups are busy building and scaling their empire. Should the government and the ecosystem builder steps in?

How nice if there is awareness about fundraising needy that solidify our belief in building startup; meanwhile get us up be ready with a fundraising mindset, which is in my opinion something doable with a simple— recommended short course of basic and intermediate fundraising skill and toolkit offer by government agency the like MRANTI, Cradle or UDEMY resources in which we can internalise it and be ready ahead of the fundraising, won’t that be nice?

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