Rina Neoh, Co-founder and Managing Director of Ficus Venture Capital speaks to Disruptr on the evolving startup ecosystem in Malaysia, whether founders are merely riding the ESG train or if they can walk the talk and what are investors including herself looking for.
“Every ecosystem is different. Many countries aspire to create or be the next Silicon Valley but they do not seem to realise that they can do everything accordingly but it does not mean it will work,” Rina says.
She highlights the surroundings we are brought up in. With reference to the difference in culture between Singapore and Malaysia, Rina says a startup ecosystem consists of many things and to truly identify what might work for a certain ecosystem, one will have to go to the roots of it.
Singapore for instance is known to attract biotech and financial talents and this was made possible because the authorities had been successful in building their own internal ecosystem to support these industries.
With a capital market that attracts investors, Rina says startup founders often feel safe building a presence on the island nation.
“Malaysia on the other end, compared to other countries in the region provides abundant access to grants for our founders. Our startups over here are blessed with supportive GLCs,” she says.
Authorities such as CRADLE, MDEC, MTDC and MRANTI for instance champion the growth of startups in the country through various aids including through a series of grants for different areas of growth.
While founders may find the abundant choices to access various grants in Malaysia advantageous, Rina highlights the need to be cautious in using these funds wisely.
“We have come to be known as ‘grantpreneurs’. If there’s one thing founders need to know about grants, it’s that the money isn’t theirs. Grants are from taxpayers and every dollar here matters and as an investor, I believe how a founder uses these grants shows their mindset in running the company.
“Your character matters and I want to see that you have the mentality to not misuse these funds,” she tells Disruptr.
Can founders walk the talk?
Rina also shares her thoughts on the rising integration of SDG principles and how sustainability is on every founder and CEO’s mind.
“I think when it comes to ESG, it is definitely a trend that is one everyone’s mind but I do believe it is a trend that is here to stay. There are always trends that popping up time to time but with ESG, there is a collective push from authorities through the SDG principles,” she says.
However, she warns that founders looking to integrate ESG into their operations should not adopt it without really thinking how it helps the company. In order for the integration to be successful, founders need to be able to walk the talk, she highlights.
With the rise of ESG integration into pitch decks of founders, Rina tells Disruptr that a lot of education is due especially in ASEAN countries. Founders will have to carry out traceability all the way and it is no easy feat to measure.
With regards to more transparent disclosure, she focuses on the recent human rights violations by conglomerates both locally and globally.
“It is no longer just about making money, but people want to buy stability. Investors may or already are asking if you can sustain the success your company is making in a more sustainable manner.
ESG practices among Malaysian companies have shown considerable improvements as of recently, particularly with the addition of eight new companies into the FTSE4Good Bursa Malaysia.
Rina also stresses the importance on reporting standards and with lots of noise out there, there is a need for proper due diligence to find out which works and most suitable. She also believes that it starts from education and both corporate leaders and startup founders require sufficient amount of education in this area to enable them to fully utilise the benefits of ESG.
“I am also a believer in asking founders when was the last time, they took their mom out for a holiday. It says a lot of about their characters and builds my assumption on how they would treat their staff. I evaluate these factors differently and I believe other VCs may have their own methods and ways too,” she says.
What are investors looking for?
Homework and research are important before a founder decides to stand in front a VC or an investor asking for funds, she says.
She also shares that investors look for stability and stability means being sustainable. While ideas are abundant, it is important for founders to be able to materialise these ideas and be able to show they are able to replicate small successes.
“If you are not resourceful, don’t be an entrepreneur and don’t expect people to spoon-feed you. It is important for founders to do their research about the investors they are meeting and get to know what interests them.
“You should know what I invest in and what areas interest me. Don’t go into a pitch hoping you will strike a lottery. Human skills and integrity can bring you a long way,” Rina tells Disruptr.