Q: We have launched our web-based application exactly a month ago. Would you be able to invest in us?
A: Monk's Hill Ventures is an early stage (post-seed) venture capital company. However, the VC industry's term "early stage" can be misleading. Typically, we will invest in companies that already have had at least US$500k to US$1.5m of seed/angel funding, and have demonstrated significant progress in building a viable product (probably 1~2 years of operations) with some level of repeatability in the sales cycle. Fortunately, there are many angel/seed funds in the region these days.
Do keep us in the loop as you build out the business over the next year or two.... we typically get to know the entrepreneurs way before we invest in them. And do let us know if you need any assistance.
Q: We've got this great idea we think we can make money on. Can you help us figure it out?
A: We're always willing to talk to entrepreneurs. However, we also ask you to be considerate of our time and come to the conversation prepared. For example, if you think you have a model that works, we'd assume you have all the market/technology research and spreadsheet modeling ready to show us. Also, be aware, we're always evaluating an entrepreneur's drive -- extreme preparedness is a sure sign of that drive.
If you have no idea how big your market is, or who the major players are, etc.... and if a VC seem to know more about your market than you, you're absolutely not ready to talk to VCs for investments. The moral of the story here is that you need to do your homework.
Q: We have completed our angel funding phase, and are now looking for Series A funding.
A: Congrats on your progress of your company. A few questions before we proceed (for us to better advise you):
(1) How much funding have you had to-date?
(2) From whom (names of investors)?
(3) How long have you been in operations?
(4) Where is your office (city, country)?
(5) What was your revenues last quarter and the quarter before, if any?
(6) Do you have an investor deck you can send us?
Q: We are based in Australia and are currently sourcing a Series A round of financing we believe Monk's Hill might be interested in.
A: Our fund mandate for early stage companies (Series A and B) is limited to the Southeast Asia region. In the next few years, we might make one or two exceptions.... but it will likely be for teams in our network that we know well.
Hopefully, it is clear why we do this. We believe the early stage venture business involves a very active and close relationship between the investor/advisor and the entrepreneur/company. Your home city, being 8 hours flight away, makes that relationship difficult to build up. If we can't provide the level of service that we think our clients (founders) deserve, we'd rather not "sell" the product.
Q: We are based in India/China/US and are currently sourcing a Series A round of financing we believe Monk's Hill Ventures might be interested in.
A: India/China/US have thriving VC communities. We are unable to cover early stage investments in these regions as we are physically too far away for the kind of interaction we want to have with entrepreneurs at that stage. Further, our fund mandate for early stage companies (Series A and B) is limited to the Southeast Asia region.
Q: I am currently looking to secure funds to develop a live seafood trading platform focused intitially on the Chinese market. To whom I can send an Investment Prospectus?
A: Monk's Hill Ventures focuses on technology-driven businesses. Specifically, in software, Internet, and mobile solutions.
Q: I would like to present a China-based operating manufacturer of LED lighting
which seeks $5m for capx expansion in the US.
A: Our fund's mandate excludes both early stage China-based companies as well as manufacturing/hardware based companies.
Q: We developed the worlds lightest short distance electric network vehicle based on advanced ultralight weight composites. Would you be interested in funding our Series B?
A: Monk's Hill Ventures focuses on businesses based on Internet and software technologies. That is our partnerships expertise. We do not feel that we are sufficiently knowledgeable about businesses outside our domains to be helpful. And if we cannot be of service to potential "customers" (i.e. entrepreneurs), we typically will not invest.
Q: We are about to commence our Series A fund raising and would like to enquire if you consider companies in the social gaming/online casino space.
A: We are open to conversations, but in general, we will not invest in businesses that are illegal in major markets.
Q: Would you have any recommendations on particular angel/seed funds I should take a closer look at?
A: There are many in the region, and most of the ones still operational are good. The not-so-good ones usually shutdown quickly since the competition is strong. We try not to be too biased with our partners. Use Google to check out these funds.
Q: We have a hardware device being launched on Indiegogo. Would you be able to fund us for expansion?
A: We usually fund companies coming out of the seed stage.
Also, consumer electronics is a difficult business to grow (there are exceptions--e.g. Nest), because the gross margins tend to get squeezed, distribution and inventory tends to get challenging at scale, etc. I trust you have thought thoroughly about the scalability of your business and the alignment with your personal goals before jumping in.
Q: What are the criteria to be funded by you?
A: We look at various factors but mainly we are searching for these points:
1. We invest in software/Internet-driven startups in post-seed stage
2. We look for this trifactor in the business: scalability (potential size of target market, typically >US$1B), repeatability (repeatable revenue model) and profitability (high gross margin, typically >50%).
Q: Is there any document that should be submitted or prepared for this purpose? Sorry to ask you since this is new for me.
A: If you don't know how to create an investor pitch deck/PPT, Google the internet for "vc pitch deck" or read Guy Kawasaki's "The Art of the Start". The Internet and Google are your friends.... use them. A pitch deck for a VC is similar to a resume for an employer.... if you are applying for a job, it is a given that you submit a resume.... if you are raising funds from a VC, you should have a pitch deck ready.
Also, you might to do some research as to what minimum top line potentials of startups are before they fall into the VC-investible category.... and have an analytical answer to yourself that satisfies you that your business has that possibility.
Q: Can you please sign an NDA before we send you information?
A: Sorry, as a general rule, we do not sign NDAs. Why? We highly respect any contract we sign and typically NDAs go beyond "we won't share your information". Further, we see hundreds of deals every year, and there's no way for us to keep track of that many contracts. We ask that you trust us with the confidentiality of the information you share with us. You have our commitment that the information will be treated with utmost confidentiality within our partnership. Our business is based on trust ... if we ever breach a trust, the word will get out, and pretty soon no entrepreneur would want to work with us.