Core to Rapzo’s philosophy is social impact and the company sponsored this year’s annual SPCA charity dinner bringing some rare glamour into the startup world. From left: Stuart McLelland (Managing Partner), Jane Prior (Partner), Ivan Tan (Intern).
Joining Rapzo Capital in July 2018, itself a start-up, was a riveting experience. The Partners included me in all day-to-day activities from pitch sessions through analysis and review into any onward negotiations and discussions. I learnt not just about Venture Capital’s intricate role in the start-up ecosystem but also my own strengths and weaknesses. My capstone experience was an overseas visit to view a potential investment and see if reality measured up to their claims.
My main takeaway looking at the range of early-stage companies was how self-valuations are highly subjective and each pinned to different stories; regional expansion perhaps, a successful copy-cat approach and of course innovation. With typically scarce data about past performance, our own evaluation needed to be robust and comprehensive. We looked out for founders’ track records, credibility and leadership potential, as well as the “wow” factor of fulfilling an unmet need with a clear target audience and explosive potential.
From my six months’ stint, I felt that Venture Capital demands skills in Consulting, Marketing, Relationship Management and Financial Analysis.
While none of us are experts across the board, well-rounded know-how across business horizontals from human resource to distribution and supply chain provides a strong framework to evaluate new firms and innovative business models. I was required to delve deep into different industries, learning about where value is added and how synergies are created.
I was surprised at how crucial Marketing is to the success of a start-up. Every great product still needs people to know about it, to buy it or sign up for the service, so how users are acquired, converted and fulfilled is essential to gaining traction. To be frank, I had underestimated this component and this internship really helped me to widen my perceptive as I also learned about and evaluated different go-to-market strategies.
VCs are notoriously picky in the companies they choose to invest in and rightfully so given that most of them fail. Having said that, ideas that are rejected initially are not condemned forever and I now appreciate the importance of maintaining a collaborative relationship and being available to discuss and explore ideas. Doors can always open again and a strong professional rapport sets the stage for access to future opportunities.
This was most intuitive to me as a finance student. Looking at cap tables and finding the ROIC, IRRs of businesses across different sectors and with a variety of methods in different contexts really widened my exposure to real-world financial analysis.
I also learnt an important lesson about having confidence in myself. In a meeting with a potential investee, I had done my research but was thrown off when I hesitated to challenge an apparently “older and wiser” individual. The company had projected a – to my mind absurd – 22x increase in business volume over their closest competitor which had a two-year head-start. Although the business offering was sound and had potential, their growth projection and consequent valuation was logically impossible. I was aggressively shut down by their Co-Founder after voicing out my concerns to this effect and in all honesty was intimidated just because he had experience and so who was I, an intern, to disagree with their conclusions? Reflecting on this, I felt that I should have stood my ground and pushed for answers to the questions I had based on my data and analysis. Experience aside, being willing to exchange opposing views and have robust discussion is critical to professional growth.
In short, I found my internship at Rapzo Capital intellectually challenging and rewarding. The stories and experiences I shared with my colleagues will definitely add value to my professional journey.