I wrote the full argument as a LinkedIn article - it's longer than I'd normally run here, but the historical chain needs the space to land properly.
Link in comments.
My take in one line: the exits that work in SEA right now, private M&A, structured secondaries, occasional overseas listings, are not workarounds. They are the exit market. The sooner fund strategy prices that in, the more honest everything else becomes.
If you've been building around an exit infrastructure that was never designed for what you're doing, what needs to change?
#contrarian
Link in comments.
My take in one line: the exits that work in SEA right now, private M&A, structured secondaries, occasional overseas listings, are not workarounds. They are the exit market. The sooner fund strategy prices that in, the more honest everything else becomes.
If you've been building around an exit infrastructure that was never designed for what you're doing, what needs to change?
#contrarian
#founderscreening
Spoke to a founder last week. General tech startup, pre-revenue. $50k from angels on a $6Mn SAFE. Thousands of free users, monetisation plan next year. Wanted $2Mn at $10Mn post. Seed stage, in his view.
Told him straight - this won't fly right now. During the 2021 hype era you could get away with strong user numbers and a monetisation story. Not anymore.
Institutional VCs at seed want revenue, or close to it. Suggested he go back to angels, raise $250k at $2.5Mn post, get to $25k MRR first.
He didn't budge. Angels had already validated $6Mn. That was his floor.
Spoke to a founder last week. General tech startup, pre-revenue. $50k from angels on a $6Mn SAFE. Thousands of free users, monetisation plan next year. Wanted $2Mn at $10Mn post. Seed stage, in his view.
Told him straight - this won't fly right now. During the 2021 hype era you could get away with strong user numbers and a monetisation story. Not anymore.
Institutional VCs at seed want revenue, or close to it. Suggested he go back to angels, raise $250k at $2.5Mn post, get to $25k MRR first.
He didn't budge. Angels had already validated $6Mn. That was his floor.
Can't really blame him either. That number came from somewhere real, someone credible backed him at that price.
But angel valuations and VC valuations are priced on completely different things. Angels back belief. VCs back benchmarks. The two don't talk to each other.
The problem is once that angel cap is in the founder's head as a floor, it's very hard to unwind.
Seen this setup hundreds of times. Still don't have a clean answer for how you get out of it gracefully.
#founderscreening
But angel valuations and VC valuations are priced on completely different things. Angels back belief. VCs back benchmarks. The two don't talk to each other.
The problem is once that angel cap is in the founder's head as a floor, it's very hard to unwind.
Seen this setup hundreds of times. Still don't have a clean answer for how you get out of it gracefully.
#founderscreening
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#Founderscreening
eFishery's founder got nine years last week.
Bandung District Court found Gibran Huzaifah guilty of embezzlement and money laundering, with two other executives convicted alongside him. Revenue had been reported at nearly 5x actuals for 2024, $415Mn raised, investors getting back less than 10 cents on the dollar.
The more meaningful detail to me isn't the sentence - it's how Indonesia chose to frame this. Criminal offence, not a corporate governance failure. That distinction matters because it changes the risk calculus for everyone in the ecosystem.
Contrast that with Builder.ai - $445Mn raised, $1.5Bn valuation, revenues allegedly inflated 300% via round-tripping with Indian firm VerSe Innovation, an AI product that was largely a few hundred engineers doing manual work. CEO facing criminal probes, SDNY subpoena issued, bankruptcy filed across India, UK and the US.
Still unresolved.
Two frauds, similar shape. One ecosystem moved quickly and drew a line. The other is still in process.
The world is watching how authorities handle cases like these - LPs, GPs, operators, all of them. Indonesia planted a flag. Be interesting to see who follows.
https://www.channelnewsasia.com/asia/efishery-embezzlement-money-laundering-court-6093891
eFishery's founder got nine years last week.
Bandung District Court found Gibran Huzaifah guilty of embezzlement and money laundering, with two other executives convicted alongside him. Revenue had been reported at nearly 5x actuals for 2024, $415Mn raised, investors getting back less than 10 cents on the dollar.
The more meaningful detail to me isn't the sentence - it's how Indonesia chose to frame this. Criminal offence, not a corporate governance failure. That distinction matters because it changes the risk calculus for everyone in the ecosystem.
Contrast that with Builder.ai - $445Mn raised, $1.5Bn valuation, revenues allegedly inflated 300% via round-tripping with Indian firm VerSe Innovation, an AI product that was largely a few hundred engineers doing manual work. CEO facing criminal probes, SDNY subpoena issued, bankruptcy filed across India, UK and the US.
Still unresolved.
Two frauds, similar shape. One ecosystem moved quickly and drew a line. The other is still in process.
The world is watching how authorities handle cases like these - LPs, GPs, operators, all of them. Indonesia planted a flag. Be interesting to see who follows.
https://www.channelnewsasia.com/asia/efishery-embezzlement-money-laundering-court-6093891
CNA
Indonesia court jails ex-chief executive of tech startup eFishery for 9 years for embezzlement
Gibran Huzaifah admitted to manipulating eFishery's financial statements during an earlier interview with Bloomberg, but denied stealing any money.
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#founderscreening
Raised in 2021 or 2022. $1Mn to $3Mn revenue. Breakeven. Next round not happening.
Your VCs have probably already had this conversation. They've pushed strategic acquisition. Maybe shutdown. Both require the least from them.
What they haven't brought up is the option that's hardest to execute and most worth exploring.
Merging with another company in the same position. Not a rescue. An actual business combination. Complementary product lines in the same vertical. Or two teams doing the same thing in different geographies - one has the product, one has the distribution.
Separately you're stuck. Together there's a real rationale.
Raised in 2021 or 2022. $1Mn to $3Mn revenue. Breakeven. Next round not happening.
Your VCs have probably already had this conversation. They've pushed strategic acquisition. Maybe shutdown. Both require the least from them.
What they haven't brought up is the option that's hardest to execute and most worth exploring.
Merging with another company in the same position. Not a rescue. An actual business combination. Complementary product lines in the same vertical. Or two teams doing the same thing in different geographies - one has the product, one has the distribution.
Separately you're stuck. Together there's a real rationale.
❤1
The math: two companies at $2Mn each, both at breakeven, both carrying full overheads. Combine them and the cost base collapses - one leadership team, one back office, shared infrastructure. What was scraping zero becomes EBITDA positive. A $4Mn revenue line that's actually generating cash is a different conversation than two $2Mn lines that aren't.
That changes what's accessible. Debt lenders who wouldn't look at you individually start to. A strategic acquirer that ignored you at $2Mn takes the meeting at $4Mn. A larger company looking to pad revenue ahead of a raise or IPO wants a platform, not a footnote.
The difficulties are worth naming honestly.
Two cap tables. Two preference stacks that need restructuring. Two VC boards, both with the same structural incentive to delay anything that forces a mark. Getting all of that aligned takes longer than founders expect, and the negotiation isn't just between the two founding teams.
Counterparty selection is everything. The right partner is one where the combination has a genuine rationale, not just shared desperation.
Two broken companies merged wrong become one larger broken company.
But if the alternative is running the company into zero and wondering if you wasted the last three years of your life, this is worth the hard conversation.
Start it before your options get any narrower.
#founderscreening
That changes what's accessible. Debt lenders who wouldn't look at you individually start to. A strategic acquirer that ignored you at $2Mn takes the meeting at $4Mn. A larger company looking to pad revenue ahead of a raise or IPO wants a platform, not a footnote.
The difficulties are worth naming honestly.
Two cap tables. Two preference stacks that need restructuring. Two VC boards, both with the same structural incentive to delay anything that forces a mark. Getting all of that aligned takes longer than founders expect, and the negotiation isn't just between the two founding teams.
Counterparty selection is everything. The right partner is one where the combination has a genuine rationale, not just shared desperation.
Two broken companies merged wrong become one larger broken company.
But if the alternative is running the company into zero and wondering if you wasted the last three years of your life, this is worth the hard conversation.
Start it before your options get any narrower.
#founderscreening
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#founderscreening
Two things I see founders get wrong about their fundraising process and neither is about the deck.
The first: treating "find a lead and we'll come in" as a real commit.
It isn't. It's how investors manage a relationship without closing the door. We want optionality. We want to stay in the deal if someone else does the conviction work. We are not going to tell you we haven't seen enough to lead because that closes a door we'd rather leave open.
The tell is what happens after that conversation. Real interest generates activity, follow-up questions, data requests, reference intros. A soft commit goes quiet. If you're chasing and getting polite responses, you have your answer.
Two things I see founders get wrong about their fundraising process and neither is about the deck.
The first: treating "find a lead and we'll come in" as a real commit.
It isn't. It's how investors manage a relationship without closing the door. We want optionality. We want to stay in the deal if someone else does the conviction work. We are not going to tell you we haven't seen enough to lead because that closes a door we'd rather leave open.
The tell is what happens after that conversation. Real interest generates activity, follow-up questions, data requests, reference intros. A soft commit goes quiet. If you're chasing and getting polite responses, you have your answer.
One exception: funds that structurally don't lead. Some multi-stage funds, certain CVCs, dedicated follow-on vehicles and following is their model, not a signal. If a fund has told you explicitly they don't lead, take them at their word. Everything else is a conviction problem.
The second: anchoring a VC conversation on angel commits.
"I have angels covering 10% of the round" lands differently than founders expect, especially after a first raise. Angels and VCs are validating on different bases. Angels back belief, relationship, early thesis. VCs need signals that institutional conviction is warranted. One doesn't stack onto the other.
What a VC actually hears: if you've been at this long enough to have angels committed, why hasn't institutional capital moved? It's not a hostile question. But it's the question sitting in the room, whether or not anyone says it out loud.
The hard part is no one is going to tell you this directly. You'll just keep getting the same responses and wonder what you're missing.
#founderscreening
The second: anchoring a VC conversation on angel commits.
"I have angels covering 10% of the round" lands differently than founders expect, especially after a first raise. Angels and VCs are validating on different bases. Angels back belief, relationship, early thesis. VCs need signals that institutional conviction is warranted. One doesn't stack onto the other.
What a VC actually hears: if you've been at this long enough to have angels committed, why hasn't institutional capital moved? It's not a hostile question. But it's the question sitting in the room, whether or not anyone says it out loud.
The hard part is no one is going to tell you this directly. You'll just keep getting the same responses and wonder what you're missing.
#founderscreening
#ecosystem
Singapore and Taiwan both backed a chip company in 1987. Same year. Same bet.
Taiwan’s is worth $800Bn today. Singapore’s was sold as a rescue deal for $1.8Bn.
Full breakdown in the PDF attached.
Curious if anyone who was in the room when these decisions were made wants to share what it actually felt like.
Singapore and Taiwan both backed a chip company in 1987. Same year. Same bet.
Taiwan’s is worth $800Bn today. Singapore’s was sold as a rescue deal for $1.8Bn.
Full breakdown in the PDF attached.
Curious if anyone who was in the room when these decisions were made wants to share what it actually felt like.
#FundEconomics
Something I left out of the LinkedIn post today.
When the founder came to me, they already knew they didn't want equity. They wanted a view on debt. I gave them both sides but honestly, my instinct was still to push equity. Hard to shake when that's all you've done for years.
They went with RBF anyway. Right call.
One thing I flagged before they signed. Borrow $500k at 1.3x and you always pay back $650k. That $150k cost doesn't change, doesn't matter how fast or slow you repay.
But the effective APR does.
Repay over 24 months, you're looking at around 15%. Sales ramp hard and you clear it in 8 months, same $150k, but that's closer to 45% annualised. Your best months end up being your most expensive ones.
Something I left out of the LinkedIn post today.
When the founder came to me, they already knew they didn't want equity. They wanted a view on debt. I gave them both sides but honestly, my instinct was still to push equity. Hard to shake when that's all you've done for years.
They went with RBF anyway. Right call.
One thing I flagged before they signed. Borrow $500k at 1.3x and you always pay back $650k. That $150k cost doesn't change, doesn't matter how fast or slow you repay.
But the effective APR does.
Repay over 24 months, you're looking at around 15%. Sales ramp hard and you clear it in 8 months, same $150k, but that's closer to 45% annualised. Your best months end up being your most expensive ones.
Most founders don't realise the holdback rate is negotiable before signing. That's the percentage of revenue taken each period. Push it lower, repayment stretches, APR comes down. Total cost stays the same but the timeline just becomes something you can actually plan around.
Worth having that conversation before you sign, not after you see the first few months of repayments.
VCs pushing equity isn't surprising. Deployment targets, fund timelines, markups. I used to be that person. So is the VC sitting across from you right now.
#FundEconomics
Worth having that conversation before you sign, not after you see the first few months of repayments.
VCs pushing equity isn't surprising. Deployment targets, fund timelines, markups. I used to be that person. So is the VC sitting across from you right now.
#FundEconomics
#founderscreening
Had a founder tell me they wanted to raise $2.5Mn at seed.
I asked why $2.5Mn.
“That seems to be what seed rounds are going for these days.”
That’s the whole problem in one sentence.
The raise amount shouldn’t come from market benchmarking. It should come from two things working together: (i) what milestones you need to hit so the next round happens on your terms; and (ii) how much dilution you’re actually okay taking right now.
Those two numbers give you the raise size. The raise size gives you the valuation.
Most founders run it the other way. Pick a valuation that feels right, size the round around it, then build a story to justify both. Investors see this pattern constantly. When they push on the valuation, and they will, there’s nothing underneath because the logic never ran in the right direction.
Six months into a raise with no term sheet, that distinction starts to matter a lot.
I do 30-minute diagnostics for founders heading into a raise. Details at rarecandylab.com or drop me a message directly.
Had a founder tell me they wanted to raise $2.5Mn at seed.
I asked why $2.5Mn.
“That seems to be what seed rounds are going for these days.”
That’s the whole problem in one sentence.
The raise amount shouldn’t come from market benchmarking. It should come from two things working together: (i) what milestones you need to hit so the next round happens on your terms; and (ii) how much dilution you’re actually okay taking right now.
Those two numbers give you the raise size. The raise size gives you the valuation.
Most founders run it the other way. Pick a valuation that feels right, size the round around it, then build a story to justify both. Investors see this pattern constantly. When they push on the valuation, and they will, there’s nothing underneath because the logic never ran in the right direction.
Six months into a raise with no term sheet, that distinction starts to matter a lot.
I do 30-minute diagnostics for founders heading into a raise. Details at rarecandylab.com or drop me a message directly.
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#FundEconomics
Five myths about venture debt and the one thing that's actually true.
Following on from Monday's post on when debt makes sense.
You need hard collateral
Traditional bank loans, yes. Venture debt, no. Lenders aren't asking for PPE - machinery, equipment, property. They're underwriting cash flows, cap table quality, and the business itself.
It dilutes you like equity
The dilution concern comes from warrants, a small equity kicker some lenders take alongside the loan. Run the math. Borrow $5Mn at 1 to 10% warrant coverage, that's $50k to $500k in warrants. At a $20Mn valuation, you're looking at well under 3% dilution at the high end. Raise that same $5Mn in equity and you're giving up 20%. And plenty of lenders today aren't asking for warrants at all.
Five myths about venture debt and the one thing that's actually true.
Following on from Monday's post on when debt makes sense.
You need hard collateral
Traditional bank loans, yes. Venture debt, no. Lenders aren't asking for PPE - machinery, equipment, property. They're underwriting cash flows, cap table quality, and the business itself.
It dilutes you like equity
The dilution concern comes from warrants, a small equity kicker some lenders take alongside the loan. Run the math. Borrow $5Mn at 1 to 10% warrant coverage, that's $50k to $500k in warrants. At a $20Mn valuation, you're looking at well under 3% dilution at the high end. Raise that same $5Mn in equity and you're giving up 20%. And plenty of lenders today aren't asking for warrants at all.
Only companies that can't raise equity use it
Some of the smartest capital decisions I've seen were profitable businesses choosing debt specifically because they didn't want to dilute. It's a tool, not a fallback.
Only mature companies can access it
Post Series A, predictable revenue, institutional backing. That's the bar. You don't need to be a ten-year-old business.
It's too expensive
Compared to what? An equity round where you give up 15 to 20% of your company? The cost of debt looks very different next to the cost of dilution.
Now the part that's actually true.
Debt sits above equity in the repayment stack. In a downside scenario, lenders get paid before shareholders. That's real, and it's why some early stage VCs are genuinely uncomfortable with it. Their position in the waterfall changes.
Most founders walk in having evaluated equity. Some walk in having evaluated debt. Not many have genuinely evaluated both at the same time. That's usually where the better decision lives.
#FundEconomics
Some of the smartest capital decisions I've seen were profitable businesses choosing debt specifically because they didn't want to dilute. It's a tool, not a fallback.
Only mature companies can access it
Post Series A, predictable revenue, institutional backing. That's the bar. You don't need to be a ten-year-old business.
It's too expensive
Compared to what? An equity round where you give up 15 to 20% of your company? The cost of debt looks very different next to the cost of dilution.
Now the part that's actually true.
Debt sits above equity in the repayment stack. In a downside scenario, lenders get paid before shareholders. That's real, and it's why some early stage VCs are genuinely uncomfortable with it. Their position in the waterfall changes.
Most founders walk in having evaluated equity. Some walk in having evaluated debt. Not many have genuinely evaluated both at the same time. That's usually where the better decision lives.
#FundEconomics
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#ecosystem
74% of enterprises have already rolled back or shut down a live AI customer communications agent. That's from a Sinch survey of 2,500+ decision-makers published this month.
Most people blame the model. The actual problem is usually the data.
AI Singapore runs SEA-HELM, the most rigorous independent benchmark for large language models on SEA languages. Bahasa Indonesia scores around 68 out of 100. Thai sits closer to 60. Think of it like a test result, that's 4 in 10 Thai interactions potentially going wrong on clean, formal inputs, before you factor in how people actually type in a real support chat.
The frontier models have improved. The informal code-switching gap hasn't closed.
Been working on a few projects in this space. If you're hitting this in production, happy to talk.
74% of enterprises have already rolled back or shut down a live AI customer communications agent. That's from a Sinch survey of 2,500+ decision-makers published this month.
Most people blame the model. The actual problem is usually the data.
AI Singapore runs SEA-HELM, the most rigorous independent benchmark for large language models on SEA languages. Bahasa Indonesia scores around 68 out of 100. Thai sits closer to 60. Think of it like a test result, that's 4 in 10 Thai interactions potentially going wrong on clean, formal inputs, before you factor in how people actually type in a real support chat.
The frontier models have improved. The informal code-switching gap hasn't closed.
Been working on a few projects in this space. If you're hitting this in production, happy to talk.
#FundEconomics
Most founders walk into a lender conversation prepared for a VC pitch.
Growth story, TAM, why now. Lenders don't care about most of that. They have one question: can this business reliably service debt?
Everything comes down to revenue quality.
Three things they look at first: how predictable the revenue is, whether the customer base is stable or churning fast, and how concentrated the business is across clients. A $5Mn business with 80% contracted recurring revenue looks completely different from one where most of it came from two project fees last year. Topline growth can mask a leaky base. One customer at 40% of revenue changes the risk conversation significantly.
Here's where it gets more nuanced for B2B founders specifically.
Most B2B businesses at Series A don't have clean SaaS metrics. Lumpy revenue, 3 to 5 top clients, project-based contracts. That's just how enterprise sales works at that stage.
Most founders assume that profile disqualifies them.
Most founders walk into a lender conversation prepared for a VC pitch.
Growth story, TAM, why now. Lenders don't care about most of that. They have one question: can this business reliably service debt?
Everything comes down to revenue quality.
Three things they look at first: how predictable the revenue is, whether the customer base is stable or churning fast, and how concentrated the business is across clients. A $5Mn business with 80% contracted recurring revenue looks completely different from one where most of it came from two project fees last year. Topline growth can mask a leaky base. One customer at 40% of revenue changes the risk conversation significantly.
Here's where it gets more nuanced for B2B founders specifically.
Most B2B businesses at Series A don't have clean SaaS metrics. Lumpy revenue, 3 to 5 top clients, project-based contracts. That's just how enterprise sales works at that stage.
Most founders assume that profile disqualifies them.
I put the question to Louis, VP Investments at Helicap, who evaluates exactly these kinds of businesses.
Four things they actually look at:
Cash conversion and client quality - how quickly does revenue turn into cash, how sticky are the client relationships, and how creditworthy are the clients themselves. Receivables can be assigned as collateral, so the quality of your client base matters in more ways than one.
Downside protection - enough cash runway that the business isn't immediately drawing on the debt to survive, and what security is available. Receivables, inventory, share pledges, minimum balance accounts.
The people - founders' background and who the equity backers are. In a troubled scenario, lenders are asking whether the team and their VCs can pull together to inject capital. A solo founder navigates that very differently from a team with institutional backing.
Market criticality - how essential is the service to the clients paying for it? In a downturn every client cuts somewhere. Is this a "cut first" or "cut last" line item.
The pitch that gets a VC excited can be the exact same pitch that makes a lender nervous. Goes wrong when founders only figure that out mid-meeting.
📞Helicap is actively deploying. Reach out to them for a chat!
#FundEconomics
Four things they actually look at:
Cash conversion and client quality - how quickly does revenue turn into cash, how sticky are the client relationships, and how creditworthy are the clients themselves. Receivables can be assigned as collateral, so the quality of your client base matters in more ways than one.
Downside protection - enough cash runway that the business isn't immediately drawing on the debt to survive, and what security is available. Receivables, inventory, share pledges, minimum balance accounts.
The people - founders' background and who the equity backers are. In a troubled scenario, lenders are asking whether the team and their VCs can pull together to inject capital. A solo founder navigates that very differently from a team with institutional backing.
Market criticality - how essential is the service to the clients paying for it? In a downturn every client cuts somewhere. Is this a "cut first" or "cut last" line item.
The pitch that gets a VC excited can be the exact same pitch that makes a lender nervous. Goes wrong when founders only figure that out mid-meeting.
📞Helicap is actively deploying. Reach out to them for a chat!
#FundEconomics
#founderscreening
Most founders I speak to underestimate how long a raise actually takes.
Had a founding team come in recently. Four co-founders. Been raising since January. Five months in, four VC meetings. Waiting on more referrals from their current investors. Getting silence from their own outreach.
Building and maintaining a target list. Personalising outreach. Following up without being annoying. Updating your deck based on feedback. Keeping your existing investors warm. Tracking where every conversation is.
Doing all of this while still running the company.
With four co-founders, one of them could have owned this entirely for two months. Instead everyone owned it a little, which meant nobody really did.
It's easily a full time job for two months. Maybe more if your network isn't deep in the VC community.
The founders who close rounds aren't always the ones with the best product. They're usually the ones who treated the raise like it deserved their full attention.
Most founders I speak to underestimate how long a raise actually takes.
Had a founding team come in recently. Four co-founders. Been raising since January. Five months in, four VC meetings. Waiting on more referrals from their current investors. Getting silence from their own outreach.
Building and maintaining a target list. Personalising outreach. Following up without being annoying. Updating your deck based on feedback. Keeping your existing investors warm. Tracking where every conversation is.
Doing all of this while still running the company.
With four co-founders, one of them could have owned this entirely for two months. Instead everyone owned it a little, which meant nobody really did.
It's easily a full time job for two months. Maybe more if your network isn't deep in the VC community.
The founders who close rounds aren't always the ones with the best product. They're usually the ones who treated the raise like it deserved their full attention.
Also freshened up the Rare Candy Lab website (https://www.rarecandylab.com/): independent founder advisory for pre-seed to Series A founders across Southeast Asia. Everyone else on your cap table looks out for themselves first. We look out for you. Take a peek and let me know what you think!
Rare Candy Lab (Tony Yeoh)
Founder Advisory Southeast Asia