Jeffrey Paine of Golden Gate Ventures on teaching entrepreneurship

My takeaway is that entrepreneurs are 80 percent trained and 20 percent born with it. Therefore, not everyone can be a founder, especially in high-growth startups, which are very stressful,” says the Singaporean co-founder of venture capital firm Golden Gate Ventures (GGV).

While it may go against the grain of those who claim that entrepreneurship is a skill that can be taught, Paine argues that certain personality traits — agreeableness and fluency, for example — are innate.

“Fluid Intelligence is the way people process information and reach conclusions. Founders have to make decisions with little to no data within a given timeframe, so they need to gather and process as much knowledge as possible to figure out what decisions to make,” says Paine, who also helped launch Pre-Seed Start-up accelerator The Founder Institute in Asia.

“If you’re too pleasant, you can’t make decisions because you listen to everyone. To be a good founder you have to be unsympathetic, but humility is also part of it.”

A serial entrepreneur with experience in Silicon Valley before co-founding Southeast Asia-focused GGV in 2011, Paine has always had an interest in working with and mentoring entrepreneurs in the region. In fact, GGV was born out of a need to address a pain point he identified among startups that needed funding from Bay Area investors, since the SEA entrepreneurial scene was relatively unknown at the time.

At the time, Paine mentored startups with Vinnie Lauria, a Silicon Valley entrepreneur who was backpacking around Asia after selling his company. Seeing the potential of some of these early-stage companies, they formed Golden Gate Ventures so Bay Area angels could invest in local startups.

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An investor in big names like Carousell, RedMart and Ninja Van

Jeffrey Paine, co-founder of Golden Gate Ventures, wears a rose gold Cartier Santos-Dumont watch with a leather strap (Photo: Phyllicia Wang)

Since then, GGV, which focuses on consumer-facing internet and mobile sectors, has raised four funds and invested in nearly 70 companies in Southeast Asia, Greater China and the US, including Carousell, Carro, Ninja Van and RedMart. Agri-tech and climate tech projects are in the pipeline, with the firm planning to close one or two more deals later this year, Paine reveals.

The scene has changed dramatically since GGV was founded. After a decade of rapid growth with the rise of several unicorn companies in the region, SEA is now firmly on the radar of global investors. In 10 years, annual invested capital has quintupled from US$130 million (S$185 million) in 2010 to US$7.7 billion in 2020, with food, fintech and logistics attracting the most investment.

“Grab and Gojek have put the region in the spotlight by raising money around the world and selling Southeast Asia to investors. Thanks to them, people understood what was happening here,” Paine notes.

Additionally, he believes the region’s start-up ecosystem has benefited from the proliferation of low-cost airlines, which have increased regional travel and the use of English. “Before 2014, when I traveled to Indonesia or Vietnam for a conference, there was always a translator with me. Now you don’t need one. Using English helps unite the region a bit more,” he says.

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At the apex of growth in the Startup Golden Triangle

Jeffrey Paine, co-founder of Golden Gate Ventures
Photo: Phyllicia Wang

Today, the startup golden triangle of Vietnam, Singapore and Indonesia is not only seen as the jewel of the region, but poised to influence the next wave of growth.

As the ecosystem continues to grow, Golden Gate Ventures announced in May it would open two new outposts in Ho Chi Minh City and Hanoi, which would complement its other offices in Singapore and Indonesia. The aim is to attract investment to the Vietnamese market, encourage the exchange and growth of new ideas and innovations, and help Vietnamese start-ups build regional businesses.

In Paine’s view, these three strong countries each have their strengths and advantages that position them for further growth and cross-border synergies. “With Singapore’s capital and talent and more experienced founders based here, you have regional experts because the headquarters and product teams are here. Singaporean teams also tend to be more ambitious and global,” he says.

Indonesia’s strength lies in its large market size and potential for returns. “In many industries, being #1 in the country can generate returns on venture capital over many rounds. IPOs have shown that there are returns for different types of retail investors.”

In contrast, Vietnam’s youth tremors and sheer technical prowess make it an attractive destination for investors and entrepreneurs. Paine says, “Besides its population density and adoption of mobile technology, it ranks #1 in terms of tech talent in Southeast Asia. Teams are able to do very complex things like Web3 and crypto because they take that second nature into account.”

Related: Self-made tech millionaire Alvin Poh is back to help other entrepreneurs rise

What’s next for startups 2.0

Jeffrey Paine, co-founder of Golden Gate Ventures
(Photo: Phyllicia Wang)

Looking into his crystal ball, Paine believes that as the SEA startup ecosystem matures, starting a business will become more difficult over the next decade. “The rate of new consumer startups with unique ideas is declining as consumer distribution is controlled by a few monopolies. Founders have to think about which companies are worth starting and what suits their personality.”

According to the GGV Southeast Asia Startup Ecosystem 2.0 report, the next generation of entrepreneurs will likely spawn social commerce startups and unicorns that are just medtech and fintech. There will also be an uptick in B2B SaaS (business-to-business-software-as-a-service) startups.

“To do well, you need to have an insight that others don’t, such as B. A tipping point when something changes in your country, region or globally. Then build something to be the first company to embrace change,” he says.

To prepare for this changing landscape and higher investor expectations in the future, GGV’s new portfolio growth strategy, dubbed Founder First, aims to provide founders not only with financial capital, but also with human and social capital that the company has acquired over the years .

“We have to look at founders as people. They are not money machines, they are people. You have to be very confident because being a founder can be extremely lonely – and that got even worse during Covid-19,” he notes.

That’s why he often asks aspiring entrepreneurs how many hours they sleep and how they regulate stress when he meets them. Noting that a significant number of them will eventually have to deal with anxiety, burnout and impostor syndrome, he notes that those who are in it for the long haul “need to know how to manage their stress and the need to recognize the first signs of trouble”.

We need to see founders as people. They are not money machines.

handing out the truth

However, Paine notes that most startups don’t need venture capital funds. “Not every company has to grow into a unicorn and most investors forget about these groups of companies. But while such companies, like software companies, may not be able to raise as much capital because they don’t need it, they deserve to be there.”

Paine says he won’t be afraid to speak up in situations like this. “If such companies meet our investment criteria and we can help them think bigger, we will likely invest in them. On the other hand, we will also tell them the truth. If we see your business going to be small, don’t collect money from us.”

However, his interactions with such entrepreneurs do not necessarily end there. “We look forward to mentoring them to help them get where they want to be. If we can help someone, we will try; If we can give honest feedback, we will, because that’s how GGV has been since the beginning.”

See also: Meet Singapore’s Jonathan Teo, the Silicon Valley investor with a touch of Midas

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