Jeff (Startup Whisperer)

Investing in Southeast Asia for many years now, I’ve witnessed cycles of growth, correction, and reinvention. Yet, the current moment feels uniquely challenging—and transformative. The sectors emerging at the forefront for the next few years—B2B and deep tech—are ones where many of us have struggled to find consistent success over the last decade, especially compared to B2C and fintech. At the same time, our fund sizes have grown larger than ever, but the market size we operate in hasn’t proportionally expanded. This mismatch creates a tension that demands we rethink how we approach risk, ambition, and execution.

Since the 2022-2023 crash, large VC funds have increasingly gravitated toward safer, private-equity-like deals while becoming more multi-stage. It’s understandable; preserving capital feels prudent in uncertain times. But playing it safe won’t build the future. We cannot afford to give up on audacious founders—those who dare to think big and aim for transformative impact. These are the people who will unlock new markets, redefine industries, and create outsized returns—not just for investors but for society as a whole.

To thrive in this new era, we must retool and reinvent ourselves as investors. This means recalibrating how we assess risk, developing deeper expertise in emerging sectors, and being smarter and more calculated in our bets (keeping Power Law Distribution firmly in mind). It’s not about reckless optimism; it’s about supporting bold ideas with discipline and clarity.

This is a call to action: let’s not retreat into comfort zones or limit our vision. Let’s figure out what needs to change—within ourselves, our teams, our ecosystems, our founders, and our strategies—and make those changes happen. The future belongs to those willing to take calculated risks on founders with big dreams. Let’s ensure we’re part of building that future.

As we journey through the fascinating world of top venture capitalists, we uncover a treasure trove of insights that shed light on the educational backgrounds, career paths, and the shifts in the demographic landscape of the industry. This data-driven exploration aims to provide a comprehensive view for limited partners, aspiring VCs, and students, as we delve into what makes these venture capitalists stand out.

Key Insights and Importance of Education

Top Undergraduate Universities

- Stanford University (13% of VCs)

- Harvard University (8%)

- MIT (7%)

- University of Pennsylvania (4%)

- Yale University (3%)

Stanford's dominance is unmistakable, emphasizing its pivotal role in the tech VC landscape.

Top Undergraduate Majors

- Engineering, Computer Science, and Related Disciplines (30%)

- Economics (17%)

- Business or Management (11%)

- Public Policy, Political Science, or Government (8%)

- Mathematics & Applied Mathematics (6%)

The importance of a STEM background remains evident, but there's a significant representation of business-related studies, reflecting the need for a multifaceted skill set.

Graduate Education

Graduate Degrees: 67% of VCs hold graduate degrees from esteemed institutions:

  - Stanford GSB (14%)

  - Harvard Business School (12%)

  - Columbia Business School (3%)

  - Wharton School, University of Pennsylvania (3%)

  - MIT Sloan School of Management (2%)

This trend speaks to the value placed on continuous learning and specialization in fields like business, finance, and technology.

Entrée into the Venture Capital Arena

- Direct Entry: 23% of VCs under 45 started their careers directly in VC, compared to only 13% for those over 45. This early specialization trend highlights a demand for nuanced expertise at the outset of one's career.

A New Generation's Rise

- Technical Backgrounds: 38% of VCs under 45 vs. 25% over 45, indicating an industry shift toward tech-savvy investors.

- Investment Banking: Investment banking serves as an initial career path for 45% of young VCs vs. 30% of their older counterparts, showcasing the sector's increasing integration with venture capital.

Experience and Impact in VC

- Founder Experience: 29% of VCs under 45 were founders, in contrast to 37% for those over 45, signifying a slower but still prevalent trend of operational experience.

- Analytical Backgrounds: Both cohorts show high levels of analytical savviness, with older VCs boasting experience in diverse roles like sales, strategic planning, and product management.

Diversifying Demographics

- Female Representation: A gradual increase in the younger cohort to 12% vs. 8% for older VCs, signaling progress in industry diversity.

- International Backgrounds: 36% of top VCs have international roots, underlining the global nature of venture capital, with significant representation from China, India, and Europe.

Key Insights for Stakeholders

For Limited Partners

- Invest in funds with multi-generational VCs to leverage industry trends and seasoned experience.

- Recognize the evolution in career paths, with younger VCs more likely to have an analytical or entrepreneurial background.

For Aspiring VCs and Students

- While technical education is advantageous, business and economic knowledge is equally important for understanding the broader market dynamics.

- Seek internships in investment banking, consulting, sales, or product management for hands-on experience.

Advances in Venture Investment Trends

- Industry Evolution: The venture capital landscape now leans towards sector specialization, with notable increases in tech-focused investments (most recently in AI).

- Diversification: Despite incremental progress in gender diversity, the industry recognizes the need for further internationalization and broader inclusivity.

In conclusion, the profile of top venture capitalists has evolved, adapting to changing industry needs, educational trends, and innovation. The combination of technical knowledge, diverse professional backgrounds, and a nuanced understanding of market dynamics remains key to navigating the entrepreneurial journey and gaining success in venture capital.

Art by Ivan Dubovik

Firstly, let me apologize for this really tardy post. I have been wanting to post this back in late 2019 and again in mid 2021. Startup activity and valuations crept higher in late 2019 due to the launch of several new funds in 2018 in Southeast Asia, followed by more capital inflows from US, Europe, Korea, Japan, India and China.

In 2020, we had a short burst of panic from March to July 2020 but investments restarted with smaller rounds and finally back in full vengeance from the start of 2021. This contributed to the best year ever in 2021 in terms of capital inflow in our region. To top it off we had interests from US SPACs and direct IPOs with companies in Southeast Asia. 

At the moment with the public market correction and uncertainty coupling with the effects of the US inflation due interest rate hikes and the war in Ukraine. There is a fear that this will come to the private markets, and yes it will. Valuations are 50-70% over valued since years before the pandemic.

What are the reasons? I will briefly touch on two.

1. We have not experienced a correction in Southeast Asia since the GFC contributing to a strong growth of new founders and investors in our ecosystem. In addition, without a flow of exits like quick acquihires, M&As and IPOs, many of our companies remain private with mostly paper gains and when IPOs do arise, early investors are cashing out and not invested for growth. As such, the quality of founders and investors reduces over time. This gives rise to undisciplined investments in companies where unit economics and growth rates are blurred between companies that gives venture returns vs those who don't. Finally the pandemic don't help in with the situation as it also gives rise to a postponement of performance and extension of rounds with little to no causation to performance.

2. Compressed funding rounds spread out over a shorter period of time in order to capture market share became more prevalent. If research on market size, adoption and timing is not done well, the execution of the business will be impacted. Overselling of our region's size and growth without relying on real business or consumer drivers affects the speed and consistency of market adoption. Hence some valuations of companies fails to be justified with performance. The region is still an emerging one, its maturity may sometimes be far from what we expect, making business projections difficult to forecast. 

So what do you if you are a founder or investor?

1. For new startup founders - Work on and refine your 12 year plan and capitalization strategy and find valuation comparables that are realistic to achieve. This is not an easy exercise but an exercise you have to do nevertheless.

2. For operating founders post Series A - Speak to Series C and D investors and ask them what are they expect of your business milestones and try to close that knowledge gap.

Besides the usual rhetoric of telling you to tighten your belt and extend your runway to over 18 months, you need to be operating your business at a level that will interest capital providers who have now sharpened their pencils. The silver lining here is there is still a large over hang of venture capital raised in 2020/2021 but trust me the investors will be more stringent going forward. Realign your approach to performance once you are clear of what is expected of you. There are situations when it is too late to turn back, and this will lead you to take a strategic option that unfortunately is the best path ahead for your company, employees and shareholders. 

I foresee higher stress levels for founders in the next few quarters. Do lean on your trusted network of advisors, mentors and coaches to help guide you through whatever is coming. 

If you need help or someone to talk, do reach out to me or the team at Coachable Initiative. 

Keep your heads up, we got this.

I have been asked many times about smaller startup ecosystems in Southeast Asia what they should do to generate large technology startups and thus attract more foreign direct investment in their countries. After yet another roundtable with a government entourage and local and regional ecosystem leaders, let me share a few thoughts. 

Start by using historical data and research to give you a place to start. We have over 10 years of startup and funding data to study in Southeast Asia of which I will not cover in depth, but for those who are keen to chat about using data driven strategies to run your fund please contact me.

Here are some high level data for you.

In SE Asia, most of the largest valued companies are:

• Global aspiration - 8% (most are B2B)
• Indonesia only aspiration - 40%
• SEA regional aspiration (usually with Indonesia as one of the aspired market) - 30% (1 in many)
• SEA ex-ID Squids - 17% (many in 1)
• SEA ex-ID only aspiration - 3% (hardly funded nor grow fast enough - 1 in 1)

With this as a backdrop, and the fact that the founders are aware that they are more than likely a copycat (99% are).

What should you do then?

1. Gather Knowledge

• Understand your environment in your beach head market or markets you are targeting and figure out your problem statement, consumer and business drivers and timing
• Figure if you and your team are the ones that are capable to address these market(s)
• Then focus on product and growth metrics while serving these markets and try to move from the bottom left to the top right corner of the chart above

We (founders and investors) have a fundamental lack of knowledge flow between capital providers from different stages. I would recommend more open conversations between accelerators and Series B to D capital providers to really understand what they are looking for. We also need to speak to other founders they are likely to copy around the world to learn what not to do in their businesses. Lastly, we need to learn from others in both developed and developing markets and understand what drivers are needed to help startups to be successful. Everyone needs to gather knowledge.

2. Market Mapping

If you are able to go global and compete with the best in class, likely aiming to be the top 4 in the world, go for it. However, from historical data, the probability of that happening is low but not impossible.

The higher probability of where you are now or will be are the 2 bolded options above.

First, if you are not addressing Indonesia from day one, you need to start planning your regional plan from day one as there will be other copycats in the region as well with a head start because they are either already based in Indonesia, or has raised more capital and/or launched in multiple markets earlier than you.

Second, be a Squid

This is where most startups get stuck, they are there but not quite. Look to be a squid with 2 tentacles and 8 arms in your home country, and plan to extend 2 tentacles to potentially 2 countries and 8 arms into potentially 8 different business lines. This way, your total combined addressable market will be larger than you originally sought out to do.

Hope this helps. 

Happy New Year!