2014/05/09 by lingdecklee
[The following is an interview by Jessica Kao (EST staff) on Tina Cheng, Partner and Chief Rep of Taiwan of Cherubic Ventures, with authorization for publishing on the personal blog of Start Jeffrey Up and the FB pages of Entrepreneurs Society of Taiwan (EST) and Plus8.]
About Cherubic Ventures:
1. Tell us a little about your VC and what kind of startups you invest in?
Cherubic Ventures is an early-stage, micro-cap VC firm with a focus in the Internet and technology industry. We have about 40 portfolio companies; 50% in China, and the rest is in Silicon Valley, Taiwan, and Hong Kong. Some of our portfolio companies in Taiwan are: Pinkoi, iFit, MakerBar etc.
We invest in highly motivated, determined, and talented teams and entrepreneurs with the potential to build a successful global company.
2. What do you think is the best gauge for whether a startup will succeed?
It’s really a mix of things and actually luck plays a key role in almost all success story. I’ll say talented and tenacious founders + teams that can execute are probably the most important thing that determines the fate of a startup. Ideas are cheap, you need a talented leader and a great team with precision execution in order to be successful.
3. What role do you play after you have invested in a startup?
We usually provide our portfolio company more than just capital. From providing advice on business strategy and exit strategy, finding overseas partnerships, to fundraising, we try to be as helpful as we can to ensure the success of the companies we invested in. Since we have a global portfolio, we plan to build a community for our portfolio companies so they have access to information and resources around the world.
4. What are some common business model and marketing pitfalls that you see startups fall into?
I think a common problem that we see startups run into is that they get too excited about their business ideas, without doing much research about the market, competitors, business strategy. So they often spend 12-18 months “perfecting” a product either no one wants or the market is just too niche.
5. What has been a successful vc-backed startup that you have seen, and what characterized its success?
I like the success story of Youtube. It was created by young founders in 2005, invested by Sequoia Capital and acquired by Google in 2006. It’s a disruptive model that quickly went viral and appeals to a global consumer base regardless of cultures and languages. And it’s a win-win-win situation: the investor made great returns in a relatively short amount of time, the founders got incredibly rich, and Youtube is now the top video platform in the world, making millions of advertising revenues for Google and forever change the way people share/watch videos. Everybody’s happy.
1. What led you to want to become a VC?
My first exposure to tech was back in 2007, when I was working in the silicon valley as a business consultant. And ever since I’ve been very interested in the startup space and was involved in a few startups myself. I wasn’t specifically looking for a job at VC firm but it just so happens that I am extremely passionate about meeting startups, helping startups to be successful, and evaluating the success of a company, and these are all key responsibilities of a VC.
2. Why do you choose to invest in startups rather than infinite other investment vehicles?
I am more interested in investing in new, disruptive ideas and talented, passionate entrepreneurs than cold papers and stocks. Each team we invest in is an exciting journey for us. We work alongside with these teams (or investment) for 3-5 years and sometimes even longer. It’s far more than just an investment, but more about creating value, making an impact, shaping the future. It may sound cliche but that’s the reason I enjoy investing in early-stage startups.
3. What is most challenging and most rewarding about being a VC?
The challenge of being a early-stage VC in Taiwan is the scarcity of exits. (That’s probably why there’s so few early-stage VC here…) And the most rewarding thing is knowing that our capital and advice played a key role in the success of our portfolio company.
4. What previous skill, knowledge or experience has been most important in your current role as a VC?
All of my past experiences have been very important in my role today. I’ve worked at companies big and small, in Taiwan and in Silicon Valley. I have co-founded a company and worked in a couple startups. So I have a pretty broad understanding of how different business works and can think from the perspective of entrepreneurs, from an employees, from a big corporation with 10,000 employees or small company with just 10 people, and of course from an investor. These experience helped me evaluate different type of business, more importantly, it helps me understand people and their motives, which is extremely important because we are in the people business.
5. What is important to know before becoming a VC?
That it’s just impossible to be in every hot deal. And to be OK with that and with missed opportunities.
6. Are you currently working on any projects other than your VC work? Does it complement your VC work, and if so, how?
Cherubic is keeping me VERY busy so there’s really no time for any other projects! However I am interested in starting a couple initiatives which I think will help the overall startup ecosystem in Taiwan. The first is bringing more Taiwanese who’s worked at big corporation or startups in other countries back to Taiwan to share their experience and perhaps do some mentoring for the young people in Taiwan. Another is recruiting. One of the key challenges for many startup is recruiting talents, so I’d be interested in doing something to help find / cultivate / train more young people to work at startups.
[Tina will be a guest speaker at the upcoming EST event on May 10: EST Woman VC + Entrepreneurs Night. Join us and listen to her VC stories!]