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Looking to get your Hong Kong based startup funded? A great place to start is knowing a few inside tips from founders and investors familiar with the turf.
If your startup is based in Hong Kong - which has a relatively small population of 7.3 million, you need to clearly demonstrate your plan to scale overseas to make it a worthwhile investment opportunity.
Abby Zhang, co-founder of e-commerce startup Yeechoo, successfully did this and raised funding from Alibaba Entrepreneurs Fund for her online designer dress and accessory rental sharing platform.
She says, “In Hong Kong, investors are particular concerned that some Hong Kong-based companies can only be a profitable boutique, rather than scalable regional or global business.”
The two are actually very similar. They’re both long-term commitments which are extremely difficult to get out of - especially if things doesn’t go as well as first planned!
"Finding an investor to back you is like finding a girl who will marry you," says Shing Chow, who raised US$60 million for his startup Lalamove (EasyVan). "You just to have meet enough of them to find the right one. You need to be able to take rejections, and you will need to have a little bit of luck.”
David Chang is a Partner at MindWorks Ventures and has invested over US$17.3 million into startups to date.
He’s seen multiple companies approach him and say, “We’re the Uber or AirBnB for XXX.” But he says, “Most of these models aren’t actually workable nor scalable.”
Chang suggests, “Find your ‘no-man’s land’ and be in sectors and verticals where it’s unsexy, not under the spotlight, and you have zero to little competitors.” Sometimes, the best businesses, as David told me, “were built when no one was looking.”
I spoke to Luke Grana who is the CEO & Founder of Grana, a fashion startup creating essentials from the world’s best fabrics.
He’s successfully raised US$16 million and recommends, “Be proactive and go out to meet potential investors as Hong Kong is a great city to network. One investor can introduce you to more investors or strategic partners, helping you get your innovative idea from concept to reality.”
This is a big advantage of the city's startup scene. It’s incredibly easy and convenient to meet investors compared to other cities.
Many startups try to raise money without a clear idea about how much they want to raise, what they plan to do with the money, or how they plan to execute.
Kevin Kwong is the CEO of The Aria Group and regularly invests in startups in Hong Kong. He says, “For an investor to have the confidence and conviction to invest into a private company at an early stage, it is extremely important to provide as much information as possible that shows how you think about how you can grow the business.”
Not only will an investor analyze the startup’s business model, but they’ll also evaluate the entrepreneur.
Roland Yau is the Managing Partner at CoCoon Ignite Ventures who have a US$10million investment fund which has invested into eight startups.
“It’s important to demonstrate high EQ and soft skills, as running a company in Hong Kong is a very tough job and founders will experience great emotional ups and downs,” says Yau.
Keep this in mind, as it’s not only your business which are scrutinized, but your personal attributes too.
This article was first published on Forbes
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