Angel Investor, Limited Partner, Managing Partner and advisor to family offices - Wally Wang describing the current situation in fundraising for startups from multiple points of view that he has.

This is Fundraising Radio and today as a guest speaker we have Wallay Wang, angel investor, and a venture capitalist, also advisor to several family offices and limited partner to an OSS Capital.

this episode we'll touch on two main topics.

Mainly we'll talk about angel investing and also we'll touch onto how limited partners work.

Welly let's kick off by you giving us some background on yourself and on scale Asia ventures.

Oh, that's great.

Thanks.

Thanks for having me.

I worked at a PM at Microsoft, working back in Asia, when I started, first, so my career.

basically I was working on the being searched as team then, and then I came to the States 2012, as a PhD student at NYU stern business school, where I'm pursuing, information system PhD that are basically everything machine learning and AI to solve real business problems.

I spent a few years in New York and then I moved to the West coast as a funneling data scientist at a, a Y Combinator incubated company called bite, called pebble is one of the earliest a smartwatch companies.

I feel the whole data science team and the beauty of the whole, basically data infrastructure from ground up.

that gave me a very good understanding about the whole machine intelligence machine learning perspective.

I following this as my whole careers theme, I moved to, back to Asia in, late 2014, where I started help, back a company to expand their business into the Asian markets.

the first company is called misfit is also a wearable tech company that got acquired at 260 million by a public company in Dallas.

I helped, the second one, which is a, and supervise the machine learning AI platform that is headquartered here in Mountainview, backed by NEA.

I brought them to Asia to solve frost solution, basically provider fraud solutions to internet giants, as well as financial services and insurance companies in Asia, multiple countries, China, South Korea, Singapore, Southeast Asia.

that gave me quite a bit, I mean, expansion opportunity to get into all know all those big corporates in the, in those different markets in Asia.

I found it's actually very exciting to build up the team there and, signing big contracts with those global.

Some of them are really global unicorns and really global multinational companies.

I, I have a one year quick, entrepreneurial, company experience myself.

I build a AI cyber security startup that are acquired in China.

I moved to this, back to the Bay area last year.

that's where I start the, investing in the early stage and also advising the family office and also corporates into deploying capital in the wastage.

yeah, that's pretty much so skill issue ventures is my early stage fund that I'm focusing on anywhere from seed to series B and, basically am a falling investor into joining a round and basically provide my unique perspective from the data science machine having experienced as far as my connections in Asia and for the late stage pre IPO stage company, I will, directly advise the family office or the corporates that I'm advising to make direct investments into those opportunities.

Nice, nice.

That's a very impressive and Lark background.

I'm not quite sure where to start now, but let's start from the probably scale Asia ventures as it's an early stage fund.

it sounds like it's through that fund, you're investing in Asia, right.

what is your pain it off doing this cross border investment? What's the major benefit of no investing in Asia while being in the United States?

Yeah, it's actually the I'm actually investing, not in Asia actually offset Asia.

Asia is basically what we can provide a very unique value into those, either the U S North American company or the European is an Israeli company where we have a very unique, LP, and also the resources from Asia.

So give you an example.

I basically investing a few areas.

one is definitely the, political SAS, but it goes to ask, including the, including those, RPA back office automation, tools that are  focused on domestic us markets.

they are also thinking about exploring that experience and opportunity over to the, to other countries.

I have a few portfolio in that vertical SAS space that I can maybe talk more later.

the other areas that I'm focusing on is in the, basically in the, deep, infrastructure, software company, including open source software and cloud native infrastructures, those tap offs, basically horizontal infrastructure software company that actually, also makes a tons of sense because all of the cloud providers talk about Alibaba cloud or Tencent cloud.

They have a very strong presence and penetrations in some emerging markets.

I have known them, the executives there for quite a few years, and they're, some of them are my LP.

basically I can directly help those, American company to basically deploy their, software solution onto those, cloud providers.

So that's a second, investment, categories.

the last one is more on to healthcare, digital health regarded.

That's actually also a very exciting angle that I think Scotia is actually providing a very unique, value to the portfolio company where that the population density is huge in Asia and there's, many data that are actually, can be, easily used to train the model of those startups.

I can find, for example, I introduced my portfolio company to South Korea, largest South Korea's, basically radiologists and network where they can actually train on the South Korea.

Korea's a population out there with allergy, image, data and providing that unique models of diagnosis or even therapeutics.

that's actually, a very unique, value that I can.

I think that those, my connections from Asia that I can provide or help my portfolios in the, in America to basically to grow faster, because now I understand that.

I'm curious as angel investor and as a hedge fund manager, how many companies until, or are there in your portfolio? Sure.

out of a sculpture ventures, I've just started, less than a year now.

I've backed about six companies before that I've done a pretty active in deploying, basically using my own money to do some angel investments.

I've invested in myself about another five or six companies so far.

I will say the, I'm actually, trying to deploy our invest, probably, 10 to 20 companies per year.

That's an impressive number of companies, to be honest, I did not expect to your Lord that large number, but how do you find those that you make a ton of investments basically? And how do you source your deals? Where do you find those companies that you invest in?

Yeah, that's a very good question.

I mean, it's always, I mean, all different investor, they have their different strategies, so it's our secret sauce.

we, what I can share is that I'm a very thesis space investor.

I only look at those, address that I'm focused on, or I have, the synergy or max expertise and, or I've been studying or following best in a vertical industry for a while.

that's probably, I think is, is one of the source that I have basically after, before I, I ever made an investment in that, category actually, do I list the three to six months of study in the, in that industry, for example, in the open source, the software piece where that's talk about maybe that's a no sequel database.

in that specific area is that, tens of billions market in general, and it's growing at a two 2030 Hagar, speed, that area there's, there's, like a hundred less than a hundred players in that specific area.

I tend to basically study all of them, either from the public information or by directly talking with those teams.

I mean, so that I have a list, I need to have a full coverage of all those companies before that I can actually make any investment in that area.

Got it.

That sounds like a pre long process and very solid approach.

it also sounds like you were covering it, why you variety off, tiers.

from very early to later on, so we even including corporate, and while we're curious about, is that you mentioned that you were doing some advisory for family offices.

Can you tell us about that? Yeah, sure.

us as a fund manager, basically we are a, basically, helping others to manage their money.

that's our, that's a whole job off our whole description of our job, even though we are specialized in, venture investment, meaning they're like technology companies, but in general, we are still managing the money for our LPs.

the feminine alpha is one of the categories of the LP, which is, I would say at least half of the whole money coming.

I mean, pulling into the venture world.

family office, they have their, previous family background either they're in real estate or they're in some other industries.

they want to basically do in their asset allocation.

I'm helping them to identify the best asset in the private market, in the technology companies that have HR invest, meaning private market here means that any companies that are not yet, popping, so in those, categories, there's different stages.

for family offices, if they, so I advise them to make direct investments and for their, from their perspective, one of the goal is to making sure to minimize the risks.

I think it's quite different from the talking about the risk profile is quite different from us as a Andrew investor where we, we love high risk, high return asset, or that's the reason why we even ask this so early for them.

Cause they have like hundreds, millions, our lives to do deploy in the private market.

they want to make sure that I list that they want to preserve the money, not losing that.

that's quite different and they also want to have a good return.

I mean, at least the beating some in the ACS or beating some, unless some like, basically savings saving on concert or interest rates.

So, so the, the, the goal is quite different from us as a early stage Andrew investor.

I advise those family offices, I've actually being very cautious about adjusting the risks versus the reward.

a lot of the time, when we identify those opportunity, we are very price sensitive.

I'm actually doing a lot of those.

we have a more, do, do, do events to do with their financials, building up they're building the models and also predicting the growth and also the market size that is, extremely important.

I tend to spend much more time on that part then in the early state ad where I'm focusing more the technology or on the product side.

it's quite different where, when we talk about, the family office is appetite.

last year I've done actually three or four deals for them.

Are there are quite big companies that, billion, unless the billion dollar valuation ish and that, but we still see them as a, another list of two, three acts, growth opportunity,

That's impressive growth, projections, but most of my listeners are actually early stage founders.

let's focus on your annual investment experience.

you're looking at the deals, when you're making research, and then when you're actually, first things, first, you take a look at the beach deck, right.

What do you think are three must have points on the beach deck?

Yeah, that's a also very good question.

I think it's from my perspective, because I've seen this, I've actually talking to companies at least the 400, 500 per year.

I think it's, most important thing that I see from the pitches is first off is your competitive landscape, meaning like you saw, explain very clearly, how do you differentiate from the other competitors? Sometime people talk to me that, they don't have any direct competitor, or they don't have any competitor, but I won't invest in those funders because that's not reality.

I mean, if it's a really disrupting market and in that well, for sure attacks many competitors.

we don't fear about those, competition, but what are that the most is that you have already found your niche, basically your unique value, and also you have some early validations of that, differentiation.

So that's one, the competitive landscape.

the second thing that I cared the most is above the team.

I think for early stage company, I mean, talking to the founders and meeting, understanding the history of the team is very important.

sometime I see the founder just to put a very, like quick slide on that, their background, but I will suggest the founder to emphasize more, or even put this slide, a background slide, above the founders to the very front so that you, when you pitch to the investor, they will do actually know who you are and where, what attracts you to become a fond of this company.

that's the second important part that I will pay more of very much attention to.

the last piece I think is also what I feel is quite unique.

If I see this is the, case study.

for the early stage company, it's very hard to get it back a solid case study.

a lot of the company that I see when they put that together, the pitch deck, they're talking about their perspectives of the, of the product or solution.

they can talk about that before long four for 10 South painters in there, but from the investor side, I cannot trust you.

I don't believe it.

And nice.

as there is a real case, study that from the customer side, they are actually, I'm impressed understanding this value the same way as you're just describing.

a case study that, illustrate the pain point and, talk about, how they deploy your solution.

also even even better, if you can talk about the, how do you charge and why they are willing to pay you and to this charging model, this pricing model, that'll be fantastic example for us to understand.

I think based on this case study, based on the team, and also based on your unique differentiations, I think I can make the decision.

Nice.

That's a great and very precisely style.

I love that list.

let's talk about the current landscape of investments.

right now, because of the pandemic plus, right now, the rise up, so it's pre unpleasant, very unstable, et cetera.

do you use to invest in startups? Are you one of those people who are still deploying money in this ecosystem?

Absolutely.

Absolutely.

I think that's actually, from my, recent this couple of weeks, I'm actually thinking it's actually a great opportunity to invest in the next, I would say, or from the fundraising perspective, I would advise your listeners, the startups founders to try to fundraise within this year.

I think it's actually a great opportunity right now because us as the farm manager, we still have a lot of money in our bank.

So we need to deploy those captains.

I mean, I mean, we got the money from the LP.

We don't want to waste it in our bags, sitting there.

We would definitely want to invest.

always we're looking out for the good company, but, talking really are talking about the current situation.

I think it's, in the next then next a few months, I think it's actually a great opportunity to fundraise.

The reason is that first of all, the stock market is already back.

you'll go have the FM, every single index perspective, and also looking at what we are focusing on the enterprise tech space.

Those are like are ready, are already back, or even 10% higher than three pandemic.

So it's crazy.

there, the, the market right now is very positive, and that I think will continue for the rest of the year.

I think that's actually, very good.

I would say environment for the founder to raise, and, it's actually, and people also got, adjust to doing this online.

a lot of the deals that I've actually made two deals in the past month, during this pandemic and everything's done, dot online.

those are, we have, I have closed the very fast.

And so everything is similar.

I mean, I don't see any, extra efforts that we need to adjust to because of the pandemic.

I think everything is streamlined.

that's thanks to all the great technology that we have currently.

I also, talking to the whole private market, I think, the importance of being to have a good cash reserve is very important for the, I would say to for the next, I would say three to five years because of the uncertainty of the global market.

that's another reason why I would suggest the founder to, reach back to the, VCs or the ambassadors, as soon as possible to start to engage and to try to raise in the next few months, because right now the stock is great and the environment is actually getting a very positive sign and the people are feeling optimistic, and that's a great opportunity that it can raise your next shot or some braids rounds so that you can actually increase your cash reserve and, increase your, what runway, to survive for.

I listed two or three years, because you can never predict for the next year or the year after.

That's my, actually my, I have some concerns around that, but I will say for now, it's actually, a great time.

I know the other fellow investors are also coming back to work in, is getting very active as well.

Right.

And that's actually great advice.

People forget that, PS deployed the mine, the funds and the fund managers actually have to deploy the money into the stirrups.

they're just sitting there and waiting for the moment when they're like more confident, so great advice.

Thanks for that.

by the way, you mentioned LPs, and I remembered that in the beginning of this episode, I promise we'll touch on to your experience as a limited partner at a, O S S capital.

Can you tell us about, sorry, what do limited partners see? What was that?

Sure, sounds good.

we talk about this fund manager thing.

That is my day job.

So I'm doing that for my LP.

on OSS capital case, I'm actually being an LP myself to deploy my personal money to back that's that fund.

the fund is actually a very specialized in the, open source community, open source software.

so they are, the fund manager.

JJ is a great, have, tens of experience in that specific area.

I trust his judgment and his, better, to attract and also sauce and, basically make the judgment call to invest in the early stage of the OSU, open source software companies.

from the LP perspective, I think it's, very important to live, to give them the full, autonomy to the fund manager, to trust his adjustment, to make those investments, and as, and the other hind and the other side, we can also help the, his portfolio, the OSS capital's portfolio to maybe attracts more for the lace of later stage, investment to fall as a follower for a long investor, or to introduce more of our resources to his portfolio.

that's also how my LP is currently helping, scale ventures portfolios as well.

a lot of the time, the, from the LP side, they have a very unique resource and also their experience and expertise.

I don't have the time the fund manager is communicating with the LP quite often, especially to ask for advise or ask for resources or ask for some synergies, to help the fonts portfolio to grow better.

Right, right.

And that's a wonderful explanation.

we're moving on to the last topic of today's episode, which is a call to action.

something that I like to do with all my speakers, and it's forcing my speakers to force my listeners to do a small step that will bring them closer to success of their company.

what's that one small thing that you want to lose here to do as soon as does Epic as the episode is over.

like reading a book or going into Twitter and following someone or whatever it is, what's that thing that's one thing to do right now.

Yeah.

Yeah.

I would say definitely like, if you have a great idea that says, show me the email.

I think that's a very important, I mean, I definitely wanted to get into, B I'm more than happy to help, the company to figure out what the best is fundraising strategy.

Cause I see over the, different stages.

that I think it's actually, very important.

I also strongly suggest that I would say that the founders too, or even the funder to be where they haven't quit their job yet.

I think it's a great time to think about your next a great idea, because I mean, after the pandemic, sorry, after the crisis, if you look at 20, 20 Oh eight or nine, I mean, there's always a boom in the startups, so it's never, be a better time than the current current timing.

also the vocab, all those, private market investors like us, we have a lot of capitals, so we definitely, and there's less companies that can survive.

the good company can easily attract, good capital.

it's a great opportunity to become a entrepreneur at this time.

Right.

just to make sure, first of all, I will definitely include your email into the description of this episode.

if you have a great idea, feel free to reach out to Wally.

the last thing that I want you to ask you for those people who think they have a great idea, what field does this idea has to be in.

you could be a right fit for them.

does it have to be BI or it doesn't have to be open source or what?

Yeah.

I mean, general interest in the enterprise tech.

if you're doing anything B2B from vertical SAS, FinTech, health tech, as far as those software companies that we talk about, the open source, the infrastructure cloud-native separate security companies, those are my expertise.

I have a very strong interest in have at house.

Or do you actually use to some other experts or basically other funds that I'm very familiar with that are actually, if I see a better fit for the B2C, for the consumer sector, I would say, it's actually, something that I will be able to direct you to other investors or you can you show, I also, I mean, basically, maybe subscribe to other fellows that are more specialized in the consumer sector.

Perfect.

I guy, and I will definitely include your email in the description of this episode.

hopefully, people listen to the ENS, otherwise they will not see it.

So hopefully they did.

And we'll wrap it up here.

Thanks a lot, Wally, for coming up and for sharing your experience.

I think that was a wonderful episode, tons of insights, tons of different topics that we touched on too.

So thanks a lot for that.

Thanks for sharing your experience in that field.

Thank you.

Thank you so much for having me have a great day.

You too.