Q1. Tell me about yourself Khai Lin
I’m Khai Lin Chua, Co-Founder and Chief Financial Officer at Fundnel. As CFO, I’m responsible for overseeing all financial procedures and protocols that are part of the company’s day-to-day operations. As Co-Founder, I am involved in almost every aspect of the business including product, HR, legal and compliance. I possess a keen interest in all things related to business and finance, and was an investment banker at J.P. Morgan prior to starting Fundnel.
Outside of work, I’m known as a passionate animal rights activist, playing an active role in a number of cetacean conservation and research projects. I also play a mean game of football, having honed my skills through weekly games on a very competitive level. During my free time, I love traveling and experiencing new cultures, with London being my favourite city due to its innate vibrancy and diversity of its people.
Q2. What made you want to venture into this line of business?
With a deeply rooted passion for business and finance, I saw fintech as a great space to be in. Advances in technology over the past few years had contributed to a rapid paradigm shift in traditional financial and banking models, changing the way things have conventionally been done.
The fintech sector has also seen increased support from the Singapore government following the report published by the Committee on the Future Economy (CFE). The Singapore government has been quick to respond to the rapidly growing fintech scene in Singapore, putting in place the regulatory framework and a flexible sandbox structure for young fintech companies to build their business model and experiment as needed. This level of support bodes well for the continued growth of the local fintech landscape, and I certainly welcome the opportunity to be at the forefront of the transformation of the financial landscape to meet the evolving needs of businesses.
Q3. What motivated you to start a business when you had a good job then?
In my line of work then, financial intermediaries/investment banks predominantly served large companies. This was due to an inherent cost structure, which would only make financial sense to these intermediaries if there was a minimum amount of fees involved. Kelvin and I saw the potential for technology to reduce the minimum base cost and simultaneously increase efficiencies specifically for fundraising in the private capital markets, creating an opening for Fundnel to leverage an untapped market.
From the perspective of the investors’, there had been a lot of demand for increased accessibility for investment in private companies as returns in the private market were on a down trend. With both demand and supply factors aligned, my fellow-co founders and I knew that we could make a real difference in the financial ecosystem. With startups sprouting all over the region, we’re looking at a growing underserved market segment. That was really the only motivation I needed to step away from a stable, well paying job to establish Fundnel.
In 2016, The Wall Street Journal published a detailed article that summarised the evolution of investment returns for professionally managed funds over the past two decades. The chart below, taken from the article, illustrates how significant the changes have been since 1995:
The chart provides insights that lead to two important conclusions:
Volatility is inevitable. Ultra-safe public market products like bonds no longer offer the same attractive returns as they once did before the turn of the century. Riskier asset classes now form a significant part of even institutional portfolios, and any portfolio that seeks similar returns today must remain volatile for the foreseeable future.
It gets harder. Unfortunately, the activity of diversification across multiple asset classes requires deeper levels of analysis and research on the part of the investor. Add to that the burden of constant rebalancing, and it’s easy to see why some consciously allow their portfolios to slip into a tepid state of stagnancy.
?Q4. How do you differentiate your business from the others?
Fundnel is a private investment platform that offers unlisted securities in the growth and pre-IPO stage companies across industries to a qualified network of investors in the region. We’re the first fintech company in Singapore to tackle private investments, leveraging data and technology to simplify the fundraising/investment process and to grow the private investment ecosystem.
The Fundnel platform is built on financial fundamentals to address institutional and professional investors’ needs, in preparation for financial inclusion for the middle market, and encouraging them to come on board with equity investments in a meaningful manner. While other online platforms tend to function more as a trading board, Fundnel curates deals based on financial markers, business fundamentals, and an understanding of local and regional investors’ interests. Our picture of the regional investment ecosystem is augmented and validated by our collection of private company data, which gives us an aggregate view of the type and size of transactions taking place in the region.
Platforms also typically serve a public and open market; Fundnel starts each issuer’s fundraising process on the opposite end of this spectrum, where we create access for VCs, corporate funds and private equity structures to anchor growth-stage deals that are not usually on their radar, before syndicating each deal to the wider market. This allows follow on investors to leverage on the due diligence work carried out by the lead investor, whilst making placements at similar or equivalent terms.
Q5. Who are your mentors in your business venture? Did you look out for them before you started your business or they have been around nurturing you to be an entrepreneur?
I have had the good fortune of having quite a number of mentors throughout the course of my career. They are generally individuals I met over the course of my work from my banking days as well as when I started Fundnel. I have found that people are open to sharing their personal experiences and advice if you are genuinely willing to devote the time and effort to cultivate the relationship. It can be as simple as catching up over coffee from time to time.
For aspiring entrepreneurs, there are structured mentorship programmes that could be of assistance as well. For instance, I had the privilege of having Mrs Josephine Teo as my mentor when I participated in the Young Women’s Leadership Connection’s mentorship programme last year.
Q6. What are the challenges you face in running and expanding the business?
Trust and low levels of awareness are issues that have traditionally plagued the fintech industry, but this is gradually changing as Fintech becomes increasingly prevalent in daily life, seeing more exposure to the general public through use cases such as cashless payment solutions.
The support and efforts of the Singapore government has also been invaluable in changing the perception of fintech. Besides putting in place the necessary regulatory framework to enable the growth of fintech, it has also held a very successful fintech festival at the end of 2016 designed to educate the public on the finer intricacies of what fintech involves. At Fundnel, we work closely with the Monetary Association of Singapore (MAS) to ensure our product is brought to the market through a safe and through process. Through our efforts, we have received our Capital Markets Service (CMS) license from MAS in 2016 which provides our investor network with validation that due compliance is in order, allowing us to push forward with existing as well as upcoming initiatives. This is a major step for Fundnel with regards to regulations, giving confidence to the team to innovate and bring Fundnel to new heights.
We’ve also been conferred the award of “Fintech Company of the Year 2017” by The Asset, one of the region’s premier banking and finance publications. The win is a testament to the hard work of the team, and is a platform for us to further enhance our capabilities and trustworthiness to current and potential clients.
Q7. What do you look out for when hiring talent? How do you go about hiring a strong team?
The team at Fundnel could be considered something of a mixed bag, comprising a diverse team of individuals with backgrounds in private equity, marketing, entrepreneurship and design amongst others. However, we all share a common belief in the vision and mission of Fundnel, and a genuine passion in making a difference for underserved businesses.
Along with sheer determination and hard work, these are the ingredients of the secret sauce behind the team at Fundnel. Thus, our hiring efforts look towards talents that ‘walk the talk’; individuals that display a genuine passion for the job and a strong work ethic that can collectively strengthen the team and the organisation’s DNA.
Q8. How has the company grown and what was the key essence in driving its growth?
Fundnel has grown exponentially in the two years since it was established. In 2016, Fundnel’s second year of business, we facilitated US$49 million of fundraising across 15 deals for businesses across Singapore, Malaysia, Indonesia and India. This year also saw Fundnel embark on the first of our regionalisation efforts with our expansion into Australia.
Within Fundnel, success is largely driven by the team’s dedication towards success and determination to succeed. Teamwork and an inclusive culture drives Fundnel, with a large amount of informal banter and discussion amongst all members of the team giving rise to innovative ideas that are then brought to life by quality execution.
Our growth was also driven by increased venture capital (VC) activity in Singapore and Southeast Asia as was a result of strong favourable macroeconomic conditions such as accelerating internet penetration and rising purchasing power of a growing middle class. VCs also hold a bullish outlook on the Southeast Asian market as it is perceived to have large untapped potential, and is the last major growth market after the twin growth engines of China and India.
Q9. What was the biggest mistake you made in your entrepreneurial journey which you advise others to avoid?
“It is not what your decision is, but what you make of your decision”. This piece of advice is one of the first things I learnt from my mentor when I left the banking sector, and has become my mantra since.
In the course of running your own business, many decisions will be made that are neither right nor wrong. More often than not, decisions are made based on an assessment of what little information you possess. Even today, I still feel doubtful about some of the judgement calls I make. Despite any lingering doubt, It is important to remember that you arrived at what you determined to be the best decision based on the information available at that point in time.
Even in the event that the decision is later deemed to be the less preferred option, the key takeaway is that instead of dwelling on the past, it should be more important to spend the time evaluating why that decision was made, the outcome of the decision, and to treat it as a learning experience.
To date, this is something that I am still learning and improving upon.
Q10. What is your advice to aspiring women entrepreneurs out there?
Statistically, 90% of start-ups fail, but as the popular saying goes – nothing ventured, nothing gained. The first step to any successful venture is to be willing to take the risk to start an enterprise from scratch, and to ensure that your passion is aligned with the company’s vision.
Startups need utmost determination and a positive attitude to succeed. It is also important to thus build a team of like-minded individuals that collectively belief in the same vision for the company, working towards a common goal. Coupled with quality execution, it is not impossible for startups to bring innovative ideas into reality.
With the wealth of support from the Singapore government in its latest Budget 2017 towards the growth of start-ups and SMEs, there is no better time to build your dreams. Initiatives such as the ‘Committee on the Future Economy’ and ‘Smart Nation’ provide a robust and conducive framework for companies to grow, while organisations such as SPRING Singapore and International Enterprise Singapore (IE Singapore) readily offer both business and monetary support to companies in their various stages of growth to ensure they grow in a sustainable manner.
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