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Drinks with… Accelerating Asia co-founder and general partner Amra Naidoo

The venture capitalist believes that most start-ups should not be fundraising. She explains why.

In this series, The Peak shares a meal or a drink with the business leader at his or her favourite eating or drinking place. Accelerating Asia’s co-founder and general partner Amra Naidoo chose LeVel 33, a gastrobar with its own microbrewery in the heart of the central business district.

Amra Naidoo believes that most start-ups should not fundraise. It’s a surprising statement, considering her role as the co-founder and general partner of Accelerating Asia, an early stage accelerator venture capital fund. But she has an explanation. “Once you get on the hamster wheel, then you always need to think about fundraising,” Amra, 31, says. “The role of the founder shifts from being the technical person or engineer to becoming a salesperson. And many people don’t realise how much time that takes that could be better used to build the business.”

She believes that most start-ups are better off taking a bank loan or bootstrapping until they become profitable. Amra herself, together with her co-founder Craig Dixon, bootstrapped Accelerating Asia from when it first started three years ago.

The problem with accelerator programmes is that it doesn’t make money. You cannot charge start-ups and exits are so far off into the future that it’s impossible to plan properly for. Hence, the company also runs a consulting arm, advising firms and governments on the best practices of accelerator programmes, and a venture capital fund that charges annual management fees. For the latter, angel investors also get the option of investing in start-up graduates they feel have potential to be unicorns further down the road.

Today, the company is profitable. It has helped and invested in 37 start-ups and completed four accelerator programmes. The fifth one is kicking off soon.

(Related: Drinks with… CIMB Singapore CEO Victor Lee who talks about servant leadership)

Amra Naidoo of Accelerating Asia started the company because she wanted to create a viable business model around accelerating start-ups.

Amra Naidoo of Accelerating Asia started the company because she wanted to create a viable business model around accelerating start-ups.

The idea for Accelerating Asia was more circumstantial than planned. Dixon and Amra first met at a previous accelerator programme called Muru-D, which was backed by Australian telecom giant Telstra. Amra looked after the community and ran the programme while Dixon was the entrepreneur-in-residence. When the Singapore operation closed down, the duo started their own accelerator programme and “give it a shot for a few months”.

They’ve more than succeeded. Accelerating Asia has helped two companies – Drive lah and Panalyt – close US$3 million pre-Series A rounds. Another accelerator programme graduate is currently in stealth mode after raising a notably large round from a well-known venture capital fund.

“These are good examples of why our programme works. Honestly, there are 200 accelerator programmes in Singapore alone. But many of them don’t prepare the start-up for institutional capital. We do,” says Amra.

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“I think a lot of founders get caught up in the whole vanity metrics of fundraising and hype. When founders go out and raise funds, they don’t think about what they’re potentially giving up. One is obviously equity in the company. The other is lifestyle. An investor is going to want a return on his or investment, so you need to work really hard in order to get that return, which is going to be higher than what a bank giving you a loan is going to be demanding.”

Amra Naidoo of Accelerating Asia gives a hard truth about start-ups and raising funds

Accelerating Asia’s accelerator programme lasts for 100 days, with each being customised to the needs and problem areas of the different start-ups. The common thread, however, is that Amra, Dixon and the team make sure that the start-up’s house is in order. From simple things like employment contracts to more esoteric goals such as an enticing story, the goal is to make it easy for gargantuan investors to take the founder seriously and hand over seven-figure checks.

The pandemic meant the programme had to be run virtually, but it was a simple transition for many of the founders. “These start-ups already have operations and employees in their own countries, so it was hard for them to come back and forth previously. Some of them are also working parents, so they have added responsibilities,” Amra says. A virtual programme eased the stresses many of them faced.

She misses the human connection, though. “When you get a bunch of people into a room, magic happens,” she laughs.

And while Accelerating Asia is sector-agnostic, Amra is partial to start-ups trying to create social impact and those looking to solve the climate change problem, the world’s biggest battle that it’s facing today. “I believe that a venture capitalist helps to create the future that he or she wants. Hopefully, the investments we make today push the world in a certain direction.”

(Related: Sharon Sim wants to change the world with her firm Purpose Venture Capital)