4 Insider Tips From A Startup Investor

Alex So is the founder and managing partner at Fastlane Group. Prior to starting his own accounting and advisory firm, Alex held senior finance and investment positions with top international financial institutions. In the past three years, Alex has invested in some of the most well-known startups in Hong Kong, such as Grana, Floship, and Soundbrenner. We asked Alex to share what tips he gives to startup founders.

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Differentiate your solution and reality check

“There are plenty of new ideas and innovative solutions to solve different problems or existing problems. It is important that your solution can stand out from the competition,” says Alex. “A founder needs to think really hard on how their solution is better than those already available in the market and why their competitors are not doing it if the idea is good.”

Be knowledgeable in the industry with good soft skills

Alex emphasizes that having deep knowledge in the subject is fundamental when launching a new venture. “This also applies when we are making an investment decision, other than the capital that we can provide, we will also consider our knowledge of the subject and how we can help them scale up during and after the fundraising process. If we understand the dynamic and well connected with the value chain, our ability for adding value to the portfolio company is huge.”

“Idea is cheap and the execution is the key,” Alex says. “The founders might not know every aspect of building a successful business but having a knowledgeable team can overcome the shortfall. There is no shortage of talents but it is the challenge for the founders to attract and retain them. The soft skills of the founders is an area that we focus a lot”.

Be realistic and measurable about what you want to achieve

“When we assess an investment opportunity, we often look at their projection and evaluate its underlying assumptions. Not that we want to see big numbers but based on the financial projection, we can follow their logic and learn how the team views their business goals. We check if they can properly define and track their KPIs and milestones,” Alex says.

Careful expansion strategy

A lot of startups aim to expand to other countries once they have fund raised as that is what they usually promised to the investors. However, he suggests that it is vital for the startups to prove themselves in the home market and continue ruthlessly to build on the product. It is essential to deploy small test to obtain sufficient own data in different markets to support expansion strategy rather than gut-feeling or desk-top research.

“As a startup, you only get very limited resources and capital. It is almost impossible to launch a service or product in multiple countries within a short period of time and be successful. You will be struggling with marketing, client acquisition, product development, team management in multiple markets. After fast burning cash in the expansion and failure to deliver a useful product to the meet market needs, it is extremely difficult to win back customers and investors,” Alex explains.

“Managing cash flow is another important aspect. Relying solely on fundraising to support your expansion is dangerous, once your investors cease to support you with funding for whatever good or bad reasons, your business will be in grave danger and your bargaining power will completely go away,” he says. “Established companies might still able to apply for bank financing, but this is not an option for startups.”

About Fastlane

FastLane Group is a multidisciplinary professional firm offering a comprehensive suite of services from accounting, audit and assurance, taxation, company formation and corporate services, human resources and payroll outsourcing and CFO advisory services.

FastLane’s senior leadership has over 20 years of managing and serving international and local corporations. Their member firms consist of FastLanePro, FastLane Capital, FastLane CPA, FastLaneHR and FastLane Venture.

FastLanePro is a Gold Partner of Xero, (www.xero.com) supporting hundreds of startups and high-growth companies since 2013.

FastLane Venture is the investment division specializes in early stage companies with a focus on technology-driven sectors.

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