My insight is that entrepreneurs are 80 per cent trained and 20 per cent born with it. So not everybody can be a founder, especially in high-growth start-ups that are very stressful,” says the Singaporean co-founder of venture capital firm Golden Gate Ventures.

While it may go against the grain of those who claim entrepreneurship is a skill that can be taught, Paine argues that certain personality traits — agreeableness and fluid intelligence, for example — are innate.

“Fluid intelligence is how people process information and reach a conclusion. Founders have to make decisions with little to no data within a certain deadline, so they have to grab as much knowledge as they can and process it to figure out what decisions they need to make,” says Paine, who also helped launch pre-seed start-up accelerator The Founder Institute in Asia.

“If you are too agreeable, you cannot make decisions because you will listen to everyone. To be a good founder, you have to be disagreeable, but humility is also needed.”

Paine, a serial entrepreneur with Silicon Valley experience before he co-founded South-east Asia-focused Golden Gate Ventures in 2011, has always been interested in working with and mentoring entrepreneurs in the region. In fact, Golden Gate Ventures was born out of a need to solve a pain point he identified among start-ups in need of funding from Bay Area investors as SEA’s entrepreneurship scene was relatively unknown back then.

At that time, Paine mentored start-ups along with Vinnie Lauria, a Silicon Valley entrepreneur who was backpacking through Asia after selling his company. Seeing the potential of some of these fledgling companies, they launched Golden Gate Ventures so that Bay Area angels could invest in regional start-ups.

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An investor of big names like Carousell, RedMart and Ninja Van

Golden Gate Ventures co-founder, Jeffrey Paine
Golden Gate Ventures co-founder, Jeffrey Paine, who wears a Cartier Santos-Dumont pink gold watch with leather strap (Photo: Phyllicia Wang)

Since then, Golden Gate Ventures, which focuses on consumer-driven internet and mobile sectors, has launched four funds and invested in nearly 70 companies across SEA, Greater China and the US, including in Carousell, Carro, Ninja Van, and RedMart. In the pipeline are projects in agri-tech and climate tech, with the firm planning to close one to two additional deals towards the end of this year, Paine reveals.

The scene has changed dramatically since Golden Gate Ventures’ founding. Following a decade of rapid growth with the rise of multiple unicorn companies in the region, SEA is now firmly on the radar of global investors. In 10 years, the capital invested per annum has increased 50 times from US$130 million (S$185 million) in 2010 to US$7.7 billion in 2020, with food, fintech and logistics attracting the most investments.

“Grab and Gojek brought the spotlight to the region by raising money around the world and selling South-east Asia to investors. Because of them, people understood what was happening here,” Paine observes.

Additionally, he believes the region’s start-up ecosystem has benefitted from the prevalence of budget airlines, which have increased regional travel, and the use of English. “Before 2014, when I travelled to Indonesia or Vietnam for a conference, there would always be a translator. Now, you do not need one. Using English helps unify the region a bit more,” he says.

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Spearheading the growth of ‘Startup Golden Triangle’

Golden Gate Ventures co-founder, Jeffrey Paine
Photo: Phyllicia Wang

These days, the Startup Golden Triangle of Vietnam, Singapore and Indonesia is not only well-regarded as the jewels of the region, but is also poised to influence the next wave of growth.

Continuing to spearhead the ecosystem’s growth, Golden Gate Ventures announced in May that it would open two new outposts in Ho Chi Minh City and Hanoi, complementing its other offices in Singapore and Indonesia. Its goal is to attract investments into the Vietnamese market, foster the exchange and growth of new ideas and innovations, and help Vietnamese start-ups build regional businesses.

In Paine’s view, these three powerhouse countries each have their strengths and advantages that position them for further growth and cross-border synergy. “With Singapore’s capital and talent, and more sophisticated founders based here, you will have regional experts since their headquarters and product teams are here. Singaporean teams also tend to be more ambitious and global in outlook,” he says.

Indonesia’s strength lies in its large market size and potential for returns. “In many sectors, if you are No. 1 in the country, you will be able to generate returns for venture capital over many rounds. IPOs have shown that there are returns for different types of private investors.”

In contrast, Vietnam’s youthquake and sheer technical talent make it an attractive destination for investors and entrepreneurs. Says Paine, “Besides its population density and adoption of mobile technology, it is No. 1 in terms of technical talent in South-east Asia. Teams are able to do very complex things such as Web3 and crypto because they consider this second nature.”

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What’s next for start-ups 2.0

Golden Gate Ventures co-founder, Jeffrey Paine
(Photo: Phyllicia Wang)

Gazing into his crystal ball, Paine believes that it will become more difficult to start a business in the next decade given the maturing SEA startup ecosystem. “The rate of new consumer start-ups with unique ideas is declining as consumer distribution is being controlled by a few monopolies. Founders have to think about the kind of companies that are worth starting and what suits their personality.”

According to Golden Gate Ventures’ Southeast Asia Startup Ecosystem 2.0 report, the next generation of entrepreneurs will likely generate social commerce start-ups and medtech and fintech-only unicorns. There will be an uptick in B2B SaaS (business-to-business software-as-a-service) start-ups as well.

“To do well, you need to have an insight others do not have, such as an inflection point when something changes in your country, region or globally. Then, build something to become the first company to catch the change,” he says.

To prepare for this changing landscape and the higher expectations of investors in the future, Golden Gate Ventures’ new portfolio growth strategy, called Founder First, aims to equip founders with not only financial capital, but also human and social capital that the firm has acquired over the years.

“We have to look at founders as human beings. They are not money-making machines, they are human. They need to be very self-aware because being a founder can be extremely lonely — and this became worse during Covid-19,” he observes.

As a result, he often asks budding entrepreneurs how many hours they sleep and how they regulate stress when he meets them. Noting that a significant number have to cope with anxiety, burnout and imposter syndrome at one point or another, he observes that those who are in it for the long haul, “need to know how to manage their stress and recognise the early signs of trouble”.

We have to look at founders as human beings. They are not money-making machines.

Dispensing the truth

Paine notes, however, that most start-ups do not need venture capital funds. “Not every company needs to grow into a unicorn and most investors forget about these groups of companies. But while such companies, such as software businesses, may not be able to take in so much capital because they do not need it, they deserve to be around.”

Paine says he will not shy away from straight talk in such situations. “If such companies fit our investment criteria, and we can help them to think bigger, we will probably invest in them. On the flipside, we will also tell them the truth. If we see that their business is going to be small, do not raise money from us.”

However, his interactions with such entrepreneurs don’t necessarily end here. “We are happy to mentor them to help them get to where they want to go. If we can help anyone, we will try; if we can give honest feedback, we will do so because that is how Golden Gate Ventures has been from the beginning.”

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