VC Nicholas Chan Part I: From Entrepreneur to Venture Capitalist

In the world of angel and venture capital investing, there is a wide range of individuals that seek to use their money to fund start-up companies. Some set out to specifically invest in particular industries; some are simply seeking a strong return on their investment; and still others fall into this type of investing purely by accident.

Nicholas Chan perhaps best fits the latter category as a serial entrepreneur turned venture capitalist. Having launched his first successful venture at the age of 17 in 1996, Chan’s focus is on assisting young, passionate start-ups in Asia. To better understand the journey to his current position as Executive Director of Azione Capital Pte Ltd., a venture capital firm and start-up business incubator, Venture Hype went directly to the source.

* Edited Interview

VH: How did you become a VC?

NC: As an accidental venture capitalist, my arrival in this position was born out of a very interesting journey. In 2006, the Media Development Authority (MDA) contacted the volunteers in Project:Senso, a Singapore-based organization that provides entrepreneurs with a platform for combining skills and resources with the formation of social enterprises. As a result, these individuals could live out the creed of the organization: “Enterprise for Good”.

As the MDA was keen on having actual practitioners help them with the inaugural micro-funding scheme, it turned to Project:Senso. The board decided that a separate for-profit social enterprise arm would be formed. I also saw this as the best way to be of service and land my dream job at the same time.

VH: You started in business very young. Did you have a desire to be an entrepreneur?

NC: My environment actually helped to spur this desire in me. Growing up, I was ostracized for being ugly, from “low society” parents of the working class, and stupid as I was from the GCE N Level 5 and kicked out of Polytechnic once. The Singapore education system is set up so that only the intelligent and rich are given the opportunity to go for events, foreign exchange, competitions and to learn about new topics. I knew that I’d be unable to excel within the elitist, shallow paper-driven system, which made me more inflamed to take the “road less traveled”.

In the 1990s, I discovered that my technical skill sets were in great demand, the profit margins were healthy and my parents were hitting a rough patch financially. I knew that I needed to do something for myself and my family. My journey here was more a necessity of survival and the timely spotting and decisive seizing of a clear and profitable opportunity.

VH: You’ve never gone through university. Do you consider your knowledge to be self-taught?

NC: I believe knowledge and wisdom are constantly learned as long as we’re willing to listen. I was once told by a professor in a local Singapore university that people do not respect me because I don’t blog. Another academic told me that I’m not fit to be an entrepreneur because I don’t have a degree. To this day, that logic has eluded me and God-willing, will continue to elude me for the rest of my life.

I learned not in the classroom, but by doing. I did, tried, fell, stood up and repeated the cycle again and again. It really wasn’t an option to read entrepreneur articles, have lengthy discussions on reasoning and intellectual discourse. I was blessed to have “silver hair” mentors early on in my life, namely Mr. Soon Choo Teck, the CEO of Sim Lim Group and Mr. Lee Keh Sai, the President of K.S.Lee & Associates [now a Schneider Electric Group company]. Both of these gentlemen imparted their decades of experience, knowledge and wisdom in practical form, lessons which are still with me to this day.

VH: Were you an angel investor before you became a VC?

NC: I’m an entrepreneur first and foremost. My transition to VC was the result of being noticed for my ability to spot opportunities and screen out hot air types. Initially, my small investments were mainly into start-ups that had a direct relationship with my previous companies and therefore served a specific strategic business purpose instead of a private investor seeking personal returns.

VH: Have you worked with angel investors before?

NC: Asians tend to avoid the label of “angel”, so I primarily work with mid to high net worth Asian individuals and families on a personal, low profile basis.

VH: Alright, for consistency’s sake, we’ll refer these individuals as angels. So, how should angel investors work or collaborate with VCs?

NC: Angel investors should view themselves as smart seed money investors who work hand-in-hand with VCs in completing due diligence. Most VCs tend to be from an academia or investment banking background and while they’re great at crunching numbers, they often need an angel’s help in sniffing out sophisticated hot air to get to real opportunities. Angels tend to have a keen sense that’s honed with bruised knuckles and scars from the battlefield of business instead of being a table planning general.

VH: Is there any reason why angels and VCs should not work together?

NC: In Asia, angel investors have a reputation for wanting to control or gain some form of exclusivity. They work very much on “guan xi” (personal networks or social relationships). VCs in Asia instead are more “by the book” as they attempt to mirror and mimic their Silicon Valley counterparts. These individuals are also very risk adverse, so combining them with a person who makes decisions based on gut feel can often result in major conflicts.

Chan has made several very sound investments in start-ups that have performed beyond expectations, causing market critics to sit up and take notice. Join Venture Hype next week as we look at Chan’s approach to selecting and identifying winners and the current investing scene in Singapore.

Chan’s Investments Worth Highlighting:

• LocAsian Networks – Carrier-independent location GIS provider for LBS applications in Asia
• Who Works Around You Pte Ltd – Secured (with Government database linkage) Location-based dating in Singapore and Australia
• Hibernator – Ability to hibernate and restore your work from any PC/Mac to the Internet
• MyWobile – Rapid prototype-and-development LBS deployment platform (i.e. Facebook for LBS applications on mobile)
• e994 – Crowd-sourced emergency services via LBS
• Clicking House – Real time renovation/furniture ordering and visualization engine (for the Singapore government and private property developers)
• Talenz – Information and market research marketplace for students, professors and companies
• Ad-Fusion – Mobile advertising and analytics platform
• GameMo – Secure content distribution platform “Try before you buy” for mobile
• BluPay – Secured near-field micropayments and user purchase analysis platform on mobile
• LionXplorer – Decentralized, distributed near-field GIS beacon infrastructure cum data network for tourism
• Business Process Visualization Engine – Process mapping engine for rapid prototyping of multi-disciplinary best practices
• TalentVision – Distributed marketplace for Microjobs
• Map2Itinerary – Tourism on mobile with LBS capabilities

Links:

• Azione Capital (New website under development. To be updated.)
• Connect with Nicholas on LinkedIn