iProperty sold to REA group in biggest dot com exit in ASEAN to far

I have met with Patrick grove two or three times last 10 years. Always impressed me with his deal making prowess. He has done it again by getting REA to pay 28.7 times last 12 month sales (not profit!). Furthermore on a forward earnings basis, iProp is expected to do about A$35-40M if they maintain growth rate of > 50%. Divide by A$750M valuation and we get about 19-20 times forward sales. Either way we look at it, this is a super high valuation that exceeds what all companies including SAAS companies get which is about 10 to 20 times sales. It eclipses both the Zopim and Hungrygowhere multiple by a factor of 2! Also to note, it has not even broken even and is slightly loss making though MY is solidly profitable.

So what could prompt REA to pay so much? Obviously it is a new geographical market in countries where buyers are like Australians pretty crazy about property. iProp operates in Malaysia, HK, SG, ID and Thailand. So from a geographical synergy point of view, it makes great sense. REA has also tested waters owning a <20% minority stake in iProp for quite a while already. So they are clearly comfortable with the ex REA management team that Patrick has gathered for iProp.

In addition, the demographics are in favour of Asian property portals. The population here is huge and HK is an entry into the China market. Both make for excellent long term stories to investors of REA.

The other synergy could be in terms of putting REA practices to help leapfrog what iProp does to really rule the region. iProp is relatively basic classifieds system and maybe with REA better products and processes, it can accelerate growth even quicker and take a lead over chief competitor Propguru in the region.

Of course REA can afford the acquisition, they have about 280M EBITDA, strong cash position of A$80M which will allow them to finance the needed 480M debt comfortably. On the competitor side, Propertyguru will probably view this as a positive as it takes time for new management to effect positive change and this kind of valuation will probably help them in their next rounds or IPO. Propertyguru has raised a lot of cash last few years and so will probably be able to take iProp on even with REA as a shareholder. A possibility could be for REA to do what SEEK did (bought out both JobsDB and Jobstreet) and buy out both iProp and Propguru since in terms of revenues, I believe the overlap is not huge with Propguru being so dominant in SG while iProp does so in MY.

SO WHO GETS WHAT?

In terms of shareholders, iProperty major beneficiary will be the shareholders of Catcha Pte Ltd which owns 16.7% or about 31M shares worth A$124M. Patrick last I checked owns about 61.5% of Catcha Pte Ltd, so that is a A$76M payday. Very similar to what Jobstreet Mark Chang got for his sale of Jobstreet last year. He has only 2 other partners, Luke and Ken who own the rest of the 38.5% with Ken having more. Very nice pay day for them too.

Another positive thing is that this deal also gives the shareholders of the companies which Patrick acquired to build up iProp a nice bonus. These smaller shareholders took cash and iProperty shares at various prices over the years depending on when he acquired them. If they held on they would have gotten a nice premium due to this sale. Its a great win win which will help Patrick be even more credible in his future deals when he stitches for more companies together.

The last lesson I have from Patrick is that deal making can be a supremely effective skill set for an entrepreneur. Besides iProp, Patrick via Catcha Group has his fingers in Ensogo, Rev media, iFlix, iCarsasia and also a VC fund! He has leveraged his smallish sized print publishing Malaysian catcha media into a veritable internet empire! And most of it has been done by buying out smaller players who don't have his ability to sell a regional vision and to tap the capital markets in ASX.

Will be waiting to see if he can do the same with the other companies in his portfolio. My hats off to this deal maker!

Ps: there is a break deal penalty of 7.5m and the deal will only complete 1q or 2q next year. So as usual everything needs to look lovely both ways and it ain't over till the money's in the bank!

Analysis on Luxola Deal

This is a nice deal all round. For investors, management and hopefully for sephora over time. I first met Alexis at Blk 71 at a closed door event for a European politician. Not enough time to know her well but it was a positive one. Very no nonsense and strong lady. At that time luxola probably just raised the 2+m gree round and so it was all very much early days business wise.

Fast forward 2 ish years and she has sold her business to sephora. Though Acra has neither reflected the transfer of shares or any new invested capital, perhaps that will come in time.. No reason to doubt her, so I am sure all forthcoming. Though I would urge readers to not count our chickens until they are hatched. For me, that means no press releases until shares transfered and money in the bank.

 Summary of key points.

1) luxola started in 2011 by Alexis who is American and another cofounder Todd. Idea is to do niche ecommerce in women's cosmetics and skincare. Learned from another ecommerce investment that nicheing is the way to higher gross margins which is super important for Ecommerce firms. General sites live wth 5-15% gross profit margins of General Merchandise Value (GMV). Niche sites should be higher. Also, GMV x gross margins gives us in a sense ,the real revenue of the startup. And you need that real revenue run rate to hit 50/60k a month to raise series A. So if your gross margin is 10%, you need at least 500k sales per mth. If a niche site with 40% gross, then you just need 150k ish GMV.

2) Luxola in year end 31st March 2014 did 2.654m sgd with 2.253m cogs. That means gross margin is 17.8%. That is actually rather low for a niche site. Could be because have not scaled up yet so no bulk discount on purchases and other economies of scale. Anyway I am sure most of that revenue is in 1q2014 which explains confidence by transcosmo, Priolo, global brain and others to invest the series B round of 10-12m usd.

3) before that luxola also had gree investing 2.456m sgd in April 2013 and wavemaker investing 600k usd or so in 2011/12. These 2 funds are good winners esp the latter.

4) sephora probably sees the team and audience as something they want in asean. I am not a cosmetic or fmcg expert. So will leave it as that. Perhaps someone else can fill in who knows more. Ecommerce multiples are now 3-4 times GMV. Used to be 2 to 2.5 just 1 year ago. But I guess niche maybe worth a bit more. Let's use 3 GMV and assume from 2.6m to 15m in GMV which is pretty fast for 2 years work. That means sale price is 45m sgd + 7.5m remainder cash or about 52.5m total sale price which is pretty close to what press seems to say. That's about sgd 10.8 per share.

5) so who gets what? And is it a good deal?

a) Alexis and Todd are main founders owning about 550k shares and 230k or about 6m sgd and 2.5m for 4-5 years work. Kudos to them! It also appears that Company gave up 3m worth of options to staff including Todd.  This is very generous and seems to have come from Alexis shares.

b) wavemaker is a big winner. They paid about 1.66 per share. Make about 6 times their money in 3/4 years! So 600k usd to 3.6m usd or so. And if this was an nrf deal, even better irr!

c) gree also win. About 4 times their 2.45m investment in 2 years!

d) the latest round Priolo guys not so good. About 18% gain since they paid usd 7 per share. But they do have liquidity pref.

Note : the pref shares esp from various  round have 6-8% liquidity preference. So probably ordinary guys like mgmt and wavemaker get a bit less than what I counted. Also the sale price of 52.5m is guesstimate. It could he 40m or 65m.

One thing that strikes me writing as a Singaporean is that there is minimal Singaporean shareholders in this deal. While having luxola based here does create jobs , build talent pool and help our buzz, it is a bit like viki. Minimal capital gain benefit to any sporean vc or mgmt. This is not a bad thing by itself so long as we also have deals like zopim, Streetsine, JobsCentral (all majority sporean owners) at the same time.

The other thing is that if indeed Alexis was the one who gave 300k shares to staff as option pool, she is a very generous lady! She has also been paying herself and Todd together about 105k in fy2014. That is a very fair salary for even 1 pax who owns 10-15% of company. Wrote on this before.

Last of all, I find the multiple of 3 on gmv quite high. Just 2-3 years ago it was 1-2 times. And I actually think it should stabilize at 1-2 times max depending on gross margins and ultimately profits. But that is just conservative me. Those of you running ecommerce firms should make hay while the sun shines!

As usual best effort based on Acra reports. Take what I write with pinch of salt and feel free to comment. I do this to help promote transparency and help share on how I think about deals. So if you find it helpful, please share your knowledge openly too and give a helping hand to fellow entrepreneurs.

Thoughts on Crowd Funding Platforms as a Business

Have been exploring and evaluating this area from the pov of an investor in the platform. Here is a summary of what I learned and think about the segment. Feel free to comment. In summary, I think crowdfunding works and there will be companies that do well. But the market is not as big as say ecommerce and growth will take a while. To me, it is not immediately obvious that it will scale like groupon clones or social media or sharing economy firms. Anyway, there are 3 types of crowd funding. Some players do only 1, some do all 3.

1) rewards crowd funding

This segment makes good sense to me as a platform and for the businesses who crowdfund. The downside is that it encourages sleek marketing and over promising at the expense of proper prototyping and testing. Improperly executed crowd funding can end up in pr disaster for the company and platform and consumer end getting nothing. Eg 3d pirate still can't fulfill all its orders up to today if the papers are right.

Perhaps a good tweak would be to escrow all the monies and only give the money when the product is delivered as promised. The firm can then use the promised sales to raise interim capital at their own risk. If terms are breached, platform returns escrowed funds so consumers are protected. Too bad for the company in this case but at least only they suffer which is fair.

2) debt crowd funding

Will end up attracting mostly middle class and high income professionals who may not fully understand the risk they are taking. People with more wealth to buy bonds direct will not be attracted to the 10-20% yields as junk bonds of >100m cap listed companies are yielding 10-15%. The extra few percentage of yield is not worth the risk. Don't forget, the companies that raise crowdfunding probably are at 1m to 20m market cap at best with couple of million revenues at most.

So if I were the authorities I would be very cautious on debt crowd funding. If companies fail, it will hit the crowd creditors who may have the wrong impression that debt is safe. Debt to small unlisted firms is not safe. I don't think the crowd funding platforms will warn people to fully understand the risk they are taking.

3) equity crowd funding

This is the most complex and interesting one. Somewhat similar to debt issue in that rich investors would probably do better sticking to Angel, vc or pe funds esp for tech area. Will attract income professionals who always wanted to angel invest but had no deal flow / smaller capital so can't do the min 50k angel bite sizes. I hope the platforms don't target middle class as early stage private equity is not a suitable asset class for average joe. It is telling that mas only allows accredited investors to invest in equity crowdfunding in sg. It is the right move.

On the company side, my feel is that good tech companies probably can raise seed (500k -1m) to series A (3/5m ) from vc funds. Why would a strong tech company want to raise passive crowd money compared to a brand name, value add vc? So perhaps non tech firms who need to raise will find the platform useful. This area may work.

Another group that may find equity crowdfunding useful is deals that require syndication. Say a company has already found its lead and raised 600k. They want 400k more. Crowdfunding could be a good choice here. Crowd Investors will feel safer that there is a lead who negotiated price , terms etc.. and it is not the platform or worse the company who unilaterally decided. This point about lead investor also applies to debt funding. 

Beyond 5m for all types of companies, pe funds, later stage vc and ipo on main/secondary boards are better alternatives for their strategic value and liquidity (in ipo case).  

Another reason running around which crowdfunding players say is that having many shareholders add user base but it seems like a roundabout way to do it. Maybe for some consumer oriented startups.... But I am not convinced.. the max shareholder cap at 500 means too little advocates.

So my guess is equity crowdfunding will revolve around mainly non tech companies and maybe some consumer tech, raising anything from 50k-1.5m. Beyond that, there are cheaper and easier options for the company. Below that and it is not worth the platform time to do it. 

Same as debt funding, crowd investors need to understand this is an angel investment they are making with a 5-10% sales fee paid to the platform. Most angel investments at such early stage fail. I doubt the platforms will warn investors about this. Also the investment is illiquid. It cannot be sold or transfered easily. Most equity platforms plan to offer an exchange or work with one to allow some liquidity but all that are just plans at present.

From a portfolio allocation point of view, I encourage crowd investors to view this as highly speculative positions in their overall portfolio. This means for equity, view it as angel investment with high chance of getting nothing back. For debt, may end up having to be party to debt collection process. As mentioned before, private investment should be no more than 20% of total investible assets.  

Also be careful on how the deal is structured. Special purpose vehicles could be set up for such deals whether debt or equity and both can have detrimental terms. Eg. Can't sell or transfer equity as you wish. This is where a deal where there is already a professional lead will help a lot.

Summary

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Make no mistake, I think crowdfunding is a viable way to raise money and for some suitable people (probably Hnwi up to 5m net worth) it is a new way to invest and offers deal flow. Angelist and kickstarter are good examples with the former being relatively high quality and have attracted vc money too.

But as is the case with any new channels, the industry wiil over promise and some clearly unsuitable people will buy in. And over time it will seesaw until a balance and a place is found in the entire funding ecosystem for it. My guess is that it will take 5 years to determine what the stable market state is for our region. My bet is on it being much smaller than what people think unlike the ecommerce/ social/ sharing economy boom. The big danger for the industry is too many negative stories of joe average losing money on such platforms due to badly represented risk reward!

Analysis on techinasia fundraising (updated Nov 2017)

TIA has announced another round of 6.6M usd led by korean hanwah investments. I covered their last round led by Softbank back in 2015 when it was announced and it is below. Some observations:

1) Strategically, i got it wrong last time that Tia intends to move into deep analytics. Instead they moved in jobs for startup community. Makes sense and from what i can see in 2016, the 2 year effort into jobs space has yielded some revenue. Not fantastic but a few hundred thousand is credible for a 2 year effort. They did go overseas as expected which perhaps explains rather large losses.

Also, latest comment from press release seems to indicate that analytics and intelligence is still on the cards. Tellingly, events is still by far their biggest component.

2) Performance has been strong since i covered below. I was spot on in terms of revenue in 2015 at S$2-3M. It was actually 2.86M. But i expected them to run a lean outfit and almost break even as media play cannot operate like a Grab or Garena and use massive revenue growth in lieu of losses. That i got wrong, they expanded a lot post SB round and made a widening loss of 2.5M in 2015.

For 2016, revenue grew nicely by 42% to about 4.07M sgd. Losses grew slower to 2.9M.  A good sign but they actually went down to 1.1M in cash end 2016. Hence the need to raise capital this year.

3) Valuations. Latest round values TIA at 24.5M usd. This year probably will be 5-5.5M sgd revenues, so that values them at 6.5-7 times this year revenue. Quite fair number for current climate.

Last round done in 2015 was at 14.2M usd post money. So the current 17.75M usd premoney is actually not a big upround. And i feel it is reflecting the expanding losses and 1.1M cash position of end 2016.

4) Sole founder owns 16.4% of company which i guess is still slightly incentivised though if i have to be blunt, media play, i forsee mgmt will be demanding higher salaries from board as the payout from salaries is now significant compared to stake.  And we can see it from numbers. In 2016, TIA paid CEO/Director fees almost double what was paid in 2014.

Overall comments.

42% growth rate is good but not great. Growth rate will continue to slow down if events is still the biggest piece. Events is not super scalable and niche events even more so. I would pay great attention to cost moving forward. Reason is that while the VC money looks like it is here to stay, as mgmt, i have a duty to make sure my company survives even without much more funding esp since growth rates are slowing down to normal speeds. Of course the 6.6M usd will last quite a good 2-3 years even with slightly expanded costs. So there is much time.

Board will need to figure out how to incentivise mgmt properly as mgmt shareholding is somewhat low.  This is a very real issue i have experienced first hand. Can kill companies if not well managed. Unfortunately, no easy solution, its usually more pay and more stock options for mgmt.

Intelligence and analytics are nice buzzterms but hard to monetize and costly at first. I feel moving deeper into tech jobs and running even more events while watching costs can probably payoff bigger over the short/medium term.

As usual, all this is just my own analysis and thinking. Overall, i think TIA has done a good job expanding in a niche space. Only thing that concerns me from company POV is the cost control and ability to seek good high margin revenues.



Below is the original article written back in 2015 June
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Tia has announced a usd 4.6m round from investors lead by SoftBank on a premoney valuation of usd 9.56m. That's about 13m sgd premoney. Post money will be about 19.2m sgd. this is based on acra data submitted by company 22nd June 2015.

I first encountered Willis back in 2011 ish. Company was still called Penn Olsen. He was asking JobsCentral to sponsor something for their first event. I remember he was a driven , gusty founder. Somewhat green in his expectation of why clients would sponsor but clearly hungry. We did not sponsor as no clear value to us but he left with me a reader of the then blog. 

Over the years, I have seen Tia grow well and become far more professional and under jungle I attended one of their events. They are a great example of a niche media play with online and events revenue streams. In 2013 they did almost sgd1m in revenue, doubling from 2012. Losses were 180k. If we extrapolate that to 2015 and considering their many more events and execution, I would venture a guesstimate of 2-3m probably closer to 3m in 2015. So that mean a deal valuation of 4+ times sales. A fair deal definitely not overpriced. Of course if revenue in 2015 is lower, then the multiple will be higher but a range of 4-6 is probably correct.

To note: they raised $1.3m in 2014 and issued 14009 shares for it valuing the company at s$8+m. So it is a up round and existing vc like fenox continue to participate which is always good. 

Two things stand out to me. Why raise so much for a media company? 6m sgd is quite a fair bit of money. My guess at sgd 3m revenues they are near breakeven or slightly profitable already. So it must be to scale up core/geographically and execute the techlist side of the business which is a saas and analytics platform. 

Second thing that stands out, Willis is a single founder and used to pay himself just 30k in directors fees. He now owns 22.5% of the company post money. If this is true, he has been more than fair to shareholders and dedicated to building the business.

From a fellow entrepreneur perspective, I hope he has/will negotiate a much better package for himself and team in the years ahead as I believe a company which is profitable should be fully loaded with market rate costs and still be profitable. That is a sustainable business esp since the firm is now more owned by investors than management team.

Would be interesting in the years ahead to see how Tia executes esp on the saas/analytics side. It is actually quite hard to transit from a media company to saas (JC and cb are doing it still...) but that is another long topic. Feel free to comment or correct my data. 

How do VC actually work in terms of revenues?

UFor a vc, funding a company is just the first step. It is like hiring a potentially great employee or finding a good business partner. All potential no real revenue. Even subsequent rounds raised at higher valuations are just unrealized gains which can evaporate esp at early rounds. Eg. Vc invest in company at 2m post money. Company raises 1 year later at 8m. Vc will change the net asset value of the company on their books by 4x. But later if firm fails and is written off, all the unrealized gain disappears.

So what is real revenue worth celebrating from a VC point of view? Finding more investors or lp. Each 1m in investments is worth 20-30k in annual mgmt fees for 5-7 years. That's real revenue and the hard vc work happens at pre-start of fund. Then vc work even harder, "hire employees" and then after 3rd year onwards of fund life hope to start exiting companies in trade sale or ipo. This is real cause for celebration as it is the carry revenues that count the most to the partner. Roughly for every 1m in excess of lp capital, vc partners in aggregate earn 200000. 

So a 50m fund in ASEAN, say 2 major partners will earn :

1) 1m per year revenue from Mgmt fee for 7 years. Usually not much profit here after all costs like legal, transport, salaries, compliance, marketing etc

2) 12-15% of the 20% carry at end of fund. So if fund in the end exits 150m. The classic 3x, the 20% carry is 20m. Their 15% is worth 15m. So each take home 7.5m before any tax (10% if concession or 17% normal corp) if equal carry.

Reward is sort of like running a startup for 7-10 years and exiting for 20m. But the risk is lower since there are 20 bets made rather than just 1 concentrated bet.

VC friends, pls feel free to chime in!

My main learning point from Mr Lee Kuan Yew

I feel much sadder than I thought I would at the demise of Singapore's founding father Mr Lee Kuan Yew. I must have shed tears at least 5-6 times in the last few days as I read his speeches and see his life pictures. Not the type of tears one sheds for a loved family member, but tears shed because his was a life worth living and I feel a great sadness that such a well lived meaningful life has to end just like any other life. And as I reflect on what Mr Lee Kuan Yew represents to me, I realize what I learn most from him is that it is possible to dedicate an entire life to a single greater purpose and have no regrets at the end of it.

Mr Lee Kuan Yew was clearly extremely intelligent and eloquent. He also was a natural leader, knowing when to play nice and when to be tough. But there are many other people in the world who are extremely intelligent and who are strong leaders. It is a genetic lottery and there is not much to respect or learn from that. Mr Lee himself believes that over 70% of a person's ability is determined at birth. I totally agree.

What sets aside Mr Lee is his amazing strength of will and alignment of his entire life to the idea of a strong Singapore. The closest approximation to this I have experienced is the way a good entrepreneur sacrifices and obsesses over their business. But we entrepreneurs do this because we own the company and so we tap into our base human nature to love what we possess to drive our obsession.  But Mr Lee is too smart to not know that he does not truly own Singapore but still he consistently chose to subordinate his life towards what he felt was best for Singapore.

And reading all his books and looking at his home and pictures, I can honestly say I don't believe he did it for any monetary reward or creature comfort. His sense of purpose and benchmark for personal achievement is the Singapore story. That explains his now famous quote about giving up his life for Singapore. He had so many chances to take it easy but he never did it. It could be because he has aligned himself so much, he cannot let go even if he wanted to!

So it all boils down to this. That this super intelligent, thoughtful, eloquent, happily married individual can at the end of his life, reflect and say that his life of conviction and service to Singapore is a life worth living and which he has no regrets. This is very unique viewpoint as most people at the end of their lives don't reflect on business or politics but instead wish they travelled more or spent more time with family.

Mr Lee Kuan Yew has shown another path for those who seek purpose in life. It tells me that it is possible for a highly talented man to devote his entire life and talents to a greater non monetary good and be engaged throughout with it as it grows and evolves. And at the end of that life, have no or little regrets.

How much should startup founders be paid?

This is a very sensitive topic which many startup founders grapple with whether they raise capital or not. I am sharing based on personal experience both as a startup founder and also as an investor. I am not saying it works perfectly or is the best. In fact, I found that I had to bargain a lot over the years and the key is to be transparent and open. So will be happy to hear how other readers do it.

1) Bootstrap Stage (Usually first year, up to $150K expenses)

At this stage, I feel founders should be paid a roughly similar basic wage. Meaning plus minus $500 of each other. In Singapore, that can range from $1000 per month to $3000 per month.  This is enough for food and transport. Anyway, this money comes from the founders themselves. My cofounder and I were paid $500 a month and later $2000 a month back in early days.

The reason for similar pay is because the roles are all mixed up in the beginning and if everyone works equally hard and full time, each key role of sales, marketing, tech and leadership all make and break the company.

One point of view I sometimes hear from founders is that they used to earn $5K, or $10K outside. So that is their opportunity cost. That is fine to say but should not affect the actual pay. Once you decided to come out and do a startup, your last drawn pay matters little, though it would be good if your co-founders appreciate your sacrifice. Also shareholding should not affect pay. If I put in $80K and you put in $20K, we should still agree to a roughly similar pay at this stage. Though if shareholding is very different, the basic may be closer to $3K whereas if the shareholding is similar, then it can be $1K.

The only time where it makes sense to me when a bootstrapped stage founder is paid >$4/5K or more is when there is a passive investor who joins the bootstrap round. Even then, I feel the various founder pay should be roughly similar.


2) Seed Stage (Year 2-3+, S$500K expenses)

Seed stage founders should be paid about $3000 to $5000. During our seed stage equivalent, we drew about $4-5K salary all in each. The thinking is somewhat similar to bootstrap round in terms of how founder pay should be similar to each other. Again, my logic is that the outfit is still small. Everyone has multiple hats and roles. So paying a similar value reflects that all founders are contributing on multiple aspects.


3) Series A Stage (Year 3-5+, $>1-3M expenses)

At Series A, it becomes necessary to have different pay for founders as roles get more defined and some roles start to be outsized in impact. For me, 3 principles are followed.

a) Pay does not exceed  and is usually below market rate for same role in similar sized company esp of outside money came in.

b) Founders are ok with the differential among themselves. Usually vesting is used to make things fairer. Founders are usually ok with differential once they agree what is the market rate for each role. Then from each role, take a fixed discount off it and build it up through a combination of base, incentives and vesting options. The biggest shareholder founder may need to be behave more generously at this stage.

c) Clear KPIs are written up for each founder role with bonuses tied to those KPI and overall company KPI.


4) Beyond Series A (Year >6, revenue 3-10+M and usually profitable)

At this stage, it really depends if the company is profitable and whether it took VC money. If the company is profitable and has not taken VC money, founders usually pay themselves up to market rate. Once market rate is hit, dividends are paid to founders based on shareholding basis. The logic is that we can always hire a market level replacement for a founder so there is never a need to pay more than market.

If the company took VC money, then there  are some controls on management pay but it is reasonable for  founder management to negotiate KPI based incentives and advocate to move towards market pay as the business grows according to plan. A good mgmt. team will ensure they feel aligned and balanced by discussing mgmt. targets and pay annually with their board.

To my knowledge, a fair market rate for a single country MD of about 50-100 staff in a dot com should be paid $200-$350K all incentives including options factored in. Base would be about 60% thereabouts of total. The CTO pay would be lower  at about $150-250K but with much higher base component. 

 

So how is early retirement at 38?

This is a rather personal post and I need to qualify that all I am writing is from the perspective of someone who has just stopped working for 7 months after 14 years of entrepreneurship. I may feel very differently if it is after 2 years.

And the reason i am sharing is that many people i meet seem to have a glorified ideal of semi/retirement. Also, i realize many entrepreneurs and working professionals seek financial freedom as a key goal in working life. So i want to share how it has been so far and hopefully it will help fellow entrepreneurs get another perspective of life after exit. This will help them in decision making and planning.

Some background is that I have 4 kids, aged 12, 11, 6 and 0.5. I have about 3 key takeaways so far :

1) It is possible to stay reasonably busy but feel less fulfilled.

My days are quite busy. About 50-60% of time on kids and family stuff, 20% on various work items (portfolio mgmt., meeting potential companies for angel investment, volunteer work with SWCDC and ACE etc), 10% on exercise and remainder on leisure activities ( I managed to catch up Walking Dead and 100!). On average, i have 2-3 meetings weekly with potential investee companies or with currently invested companies or for volunteer related work.

After these last 7 months, I feel all this is less fulfilling when combined compared to running a full time business on top of them. Two key differences. First is that I am far less busy and everything is more touch and go rather than digging in and being intimately involved. There is no bone for my mind to chew on daily. Portfolio management has sort of replaced this since i can obsessively track gains and losses and there is an endless amount of analysis to read and learn. But it is not as fun. Second, there is a lack of buzz or excitement that comes from working with a regular team and aiming for a common goal. I used to work in an office with 100 people and interact with at least 10-20 daily. Now it is much lesser and we are frequently not on the same team.

What I do enjoy is working with startups whether as an investor, director or just sharing experiences over coffee with driven coachable entrepreneurs. Currently, I spend most time and effort on DrWealth which has just raised a S$800K seed round and things are getting exciting there. I have also formed regular forums under ACE to help tech startups learn from each other.

2) More time = healthier physically and mentally.

This is a big one for me and is one of two reason why I am not rushing back into business. While running the business, I was perpetually stressed out both mentally and physically. I had a permanent stress cough, bad sinus problems and had difficulty switching off at night. So much so, I would think of financials even while in the toilet! All that changed in the last 7 months. I sleep much better, have spent enough time in the gym, have fallen sick only 2-3 times (used to be almost monthly or bimonthly) and find myself more patient with people. In fact, my cholesterol level has dropped by almost 40 points into normal range despite little change in diet.

3) More time = Present for Loved Ones & People

The second reason I am not rushing back is that having time for my kids and loved ones is fantastic. Throughout my last 14 years of work, I have always tried to spend time weekly with my parents, have daily dinners with kids and generally be there as they grow up. But truth be told, I was obsessed with the business and competing much of the time even while I was with them. Now I find that I am far more present for them. I know and feel alongside their first day of school, their first taste of porridge, and even first PSLE! And this being present extends to friends and people I meet. I find myself far more patient and willing to listen and see things from their point of view. This is great because it helps me control my competitive nature and I believe makes me a nicer person.

So there you have it. Three key changes that happened to me. Will I plunge back into the fray with another startup? Maybe. As usual, it is a matter of right team, right idea and right timing. And it may not be an internet business. Will it be this year? I am letting things happen and will go along with it as events develop. My second kid has PSLE this year, my youngest is very cute (to me) at just 6 months and I have not even done much traveling due to recent family events and the new baby.