Ben Lim is the Managing Partner at NEXEA, an early Startup Accelerator, Angel Network, and Venture Capital. NEXEA has invested in more than 35 Startups across Southeast Asia and is known for creating value in their investments. NEXEA is backed by experienced entrepreneurs who have done their M&As and IPOs or are CEOs of publicly listed companies. More importantly, they want to give back to the next wave of entrepreneurs.
Ben founded NEXEA together with a few partners and has since managed the deal flow and investments into Startups. He also ran 3 Accelerator programs with Watchtower & Friends and Sunway iLabs, and a few other corporate partners like AWS, Google Cloud, IBM, Microsoft Cloud, and Digital Ocean.
He has deep experience in validating Startups from MVP to investability, as well as fundraising for Startups. Ben has advised over 1000 Startups in fundraising and the fundamentals of a Startup over the years.
In an exclusive interview with AsiaTechDaily, Ben says:
We believe in supporting Startups and helping them become future technology giants. We want to help Startups succeed by finding, supporting, and funding Startups. So when we go to the office, it’s not to work – but to help Startups grow.
- The grit to keep trying different ways over and over again has been very important for me. With this, many can be successful
- Knowing the right people and learning from them is also a key thing for me. So, I would want them to be able to learn from people better than them
- Patience is taking up opportunities is another one. In life, opportunities come by once in a while. You have to be prepared to take it up. You also have to be patient enough in the right position to be able to get it
Read on to know more about Ben Lim and his journey.
What background and domain expertise do you have?
Ben Lim: I have a background in software and design. However, I have always been an entrepreneur at heart, and I believe in technology changing the world. I hold an MBA and have been in the Startup investment scene for all of my careers.
When did you first think about starting a fund?
Ben Lim: It was an accident, actually – we didn’t intend to get into Startup investments at first. We were looking at Startup ideas but slowly gravitated towards helping Startups grow and get funding. We had the right ingredients at that time – we knew the right people, had the right talent with us and were able to execute what we set out to do. So, we started as an Angel Investment network but slowly moved towards Venture Capital as well.
What kind of startups/ sectors have you invested in till now?
Ben Lim: We have invested in a very diverse set of Startups across the region and many industries. We can do so because of our unique value proposition – our investors are willing to mentor our Startups. They are business people from various backgrounds and have vast networks of their own. Hence, together, we can add value to many types of Startups. We call it being sector-agnostic. We have almost 40 startups serving the mass market and large corporates in many different industries.
What types of companies do you look to invest in? And What’s your mental model for investing?
Ben Lim: Being sector-agnostic, we are mainly looking for companies that fulfill a large market need and can disrupt their market using technology. Of course, the team plays a huge role – and it usually shows in their results. We are lucky to have a steady, large deal flow – so we can pick from the best. Because VC investment is very competitive, very few Startups get funding – especially in the early stages. Because of this, we are constantly finding only the best companies to fund.
What is your typical investment range, and how many startups you invest in per year in general? Additionally, can overseas headquartered startups get funding from you?
Ben Lim: We play in the extreme early-stage region of the startup curve. So our ticket sizes are smaller than the typical VC. We are investing anywhere up to US$250k for each round. Typically, this means we participate in funding rounds up to US$1m. We generally only look at investments within Southeast Asia as our focus area.
What would be the KPI that you usually check about the startups’ growth?
Ben Lim: It may be diverse in each industry like LTV, CAC, MoM, etc., but it will be helpful to understand more about your additional investment factors.
The revenue growth rate is a good and simple indicator for startup growth. If we are looking at how scalable a Startup, maybe, then LTV/CAC is a good indicator. Generally, we look at too many indicators to mention. The reason is that when evaluating Startups, we want to look at the whole package rather than just a few key points. We are funding sustainable, high growth businesses that can one day turn a fat profit. If you are reading this and happen to be a Startup that can do that, we would like to hear from you!
How do you handle this COVID-19 outbreak situation for your fund’s survival in the future?
Ben Lim: COVID-19, fortunately, does not affect us directly in any significant way. Our investment strategies already cover such risks pre-COVID, as it would with many diversified investors. If I were a travel-related VC, then it would be a terrifying situation. But we are well diversified, so although some areas are hit, it is generally an expected and manageable scenario for us. We are fortunate to move quickly to support our Startups in the very early phases of COVID and have provided the necessary support to help them. So far, no Startups have closed due to COVID.
Right after being an investor, like in the early days, there must be some tough times in building up the first fund along with building up a second fund or giving back the good returns to those LPs. If there is any similar tough time like this, please tell us more about it and how you (or your team) overcome the difficult times?
It is never easy to get into the Startup investment field – you will probably face deal flow issues, fundraising issues, portfolio management issues, and so on. This is quite normal because most VCs or Startup Investors would not have had experience in all those areas beforehand. Having a great network and the right advisors is definitely an important factor in finding success in this field. Some have gone through a similar situation before and can always point you in the right direction via their experience.
Additionally, Do you have advice for anyone looking to start a fund?
Ben Lim: If you are starting a fund, know your strengths and weaknesses. Know your personal runway as well. Are you able to start a large enough fund from the get-go? Can this fund support a full team? What are your key differentiators as a fund manager – can you compete with existing fund managers? Do you really have the passion required to start a fund (and more likely, multiple funds) that will easily last 10 years each? Fund management is extremely competitive, so it is important to have all these questions answered favorably!
What mistakes do you see founders make when raising money?
Ben Lim: Typically, this would be high valuations, especially those that are 2X or more than their comparable Startups out there – when they are nowhere near the size, quality, or momentum of their comparable. Investors do have a lot of choices when deciding which companies to invest in. So if you set an extremely high price, it is very easy for investors to pass on you. My advice for this is to know your direct competitors or comparables and understand their numbers and how they got their valuations.
What’s your advice to entrepreneurs who have a chance to meet investors like you? What are the top 3 questions that you always ask the founders?
Ben Lim: First, it’s not too hard to get in touch with us because we try to answer all inquiries via our website – so apply on NEXEA.co, and my team will assist you in your fundraising journey.
When meeting venture capital investors, it’s good to follow the typical etiquette & advice – be on time, look presentable, and practice your pitch!
Typically, I would ask questions to figure out your attainable revenues if you manage to be a significant market player. Would you be able to grow to be worth about US$100M or even US$1B?
I would also check if you have the right business model and how you think and why you think that way. Does the market really gravitate towards your business model or the business model of your competitors?
Finally, I like to get to understand the founder and the team. What allows them to compete with all the other Startups out there? Where are they compared to my best founders?
What’s your general thought about the term “Global,” and What are the important factors (criteria) for local startups to consider for international expansion?
Ben Lim: Going global is good – but not at all necessary for most Startups. Many businesses depend on the human factor, which makes it harder to replace with technology and scale. So, most Startups end up being regional instead, focusing on their localities to maintain that competitive edge. Sure, some are made to go global, and we have seen a few – but there are not many that can truly go global.
Important factors to expand overseas are a very strong management team and very strong, repeatable, and replicable processes. Understanding of culture, empowerment, and so on are very important aspects too. We have a few Startups that have expanded already, and they do seek advice often – so mentoring from people who have been through it is very important.
What kind of startup or tech industry will impact the world in the future, like 2-3 years locally in your view?
Ben Lim: I believe within the shorter time horizon of 2-3 years, and AI will be changing the local startups’ landscape. We already see the impact of AI on drones, for example, and I think we will see more in B2B applications.
How do you keep yourself motivated every day?
Ben Lim: We believe in supporting Startups and helping them become future technology giants. We want to help Startups succeed by finding, supporting, and funding Startups. So when we go to the office, it’s not to work – but to help Startups grow.
What are the top three life lessons that you want your (future) sons and daughters to know?
Ben Lim:
- The grit to keep trying different ways over and over again has been very important for me. With this, many can be successful
- Knowing the right people and learning from them is also a key thing for me. So, I would want them to be able to learn from people better than them
- Patience is taking up opportunities is another one. In life, opportunities come by once in a while. You have to be prepared to take it up. You also have to be patient enough in the right position to be able to get it
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