Learnings from key losses over last 12 years

(Update 9 mths later, I just wrote the article on learnings from wins too).

About S$3.5M from the more memorable badly made investments. That's since Jul 2011 when we actively started to track and run our portfolio of bonds, equities, forex and private equity. I am sharing because there are too few articles that discuss about investment losses and learnings. And I believe there is as much to learn from losses as there are from winners.  And a good investor needs to take into account both in order to succeed over time. 

Losses have always been on my mind esp since 2014 when we completely exited our business and switched from an entrepreneur mindset to an investor one. Prior to that, losses mattered less as our invested capital was always a small portion of our total net worth since most of our monetary net worth was tied up in human capital in the form of future salaries and in the company we owned. But once our invested capital becomes the main cash generator, tracking and analyzing losses and wins in investments becomes critical. 

Of course, as active investors, it’s not realistic to expect to make a gain in every investment. In fact, it is normal to have many bad calls/decisions and to lose money on some investments every year. What is desirable is to have strategies and policies that end up with more winners and maximize those winners while minimizing quantity and quantum of losses. And the big goal overall is to eke out a good return over the long term across entire portfolio value.

In the points that follow, I will attempt to group the key losses by asset type and reasons for the loss. Then I will share the learnings we gathered from that loss.  Also, to set the context, our investing experience has been good but not great (own yardstick) over the last 12 years to end June 2023.

1) Equity returns better than ACWI ETF 8+% total annual returns.

2) Fixed Income returns better than JNK ETF 3.5% total annual returns.  

3) PE investments (which are majority VC and startups) at  25-30% IRR which is strong but a lot of unrealized gains. 

So we feel we are doing fine because our returns more than pay for our annual expenses and are also above the financial planning targets we set 12 years ago. And the main internal controllable reason we achieved this is due to consistent asset allocation discipline. We are almost always fully allocated or even overallocated using leverage. So we never have cash dragging down returns. And almost always >>50% equity allocation. Second reason is a few decent single stock (eg. SEA, SHinvest, FB, GOOG etc)  & ETF selections with consistent & appropriate bite sizing . Would love to add a third on being able to cut loss quickly but cutting loss is not yet our strength as readers can see below.

Bearing all that in mind, here are our bigger memorable losses (in SGD). I exclude direct startup losses because the considerations and learnings are quite different but include PE or VC fund losses because fund manager selection mistakes can be pattern recognized more easily.

1) 500k - Bad fund manager selection on famous FMCG PE and a brand name European hedge fund. The 2 funds above were bought thru a private bank and they promptly went on to grossly underperform compared to peers and benchmark. So they had grossly negative alpha. 

The PE fund is still ongoing- sitting on 380K or about 50+% loss after 9 years of investing.  The fund did so much that don't make sense. Supposed to pick more stories like Charles & Keith, more china plays... instead they picked 2nd tier brands in australia, europe, SG , Middle east. And they reported greatly improved TVPI and IRR just when raising next fund a few years later - only to write portfolio back down once fund 3 was raised. And then later mgmt exited to a new buyer. Lesson here is fund managers are aligned to AUM which pays 2% annually much more than aligned to our returns. And be very skeptical of mark to market if it is not realized. Esp don't trust the numbers when fund is using it to raise new fund. Their incentive is to window dress their old fund numbers. 

Also one vintage does not prove anything. Go for fund managers that really have long track record. It implies a lot in terms of internal bench strength, professionalism etc.

The famous European hedge fund lost 20+% within 6 mths and closed down. Even the private bank that sold it had to say sorry. Lesson here? Beats me! for some reason the manager didn't even want to continue it. 

2) 900K - From 5 single bond & 1 recent fund losses. Back in 2013-2017, we were happily borrowing USD at 0.7% and then buying IG bonds at 3.5-4+%. This was a winning strategy until we decided to go after a bit more yield and went in Brazilian USD denominated IG credit and regional BB junk bonds. Unfortunately operation car wash hit,  there was the oil & gas crash worldwide and the regional single issuers had internal cash flow problems.

The first bond was the worst as we thought bonds can rebound and price action may behave like stocks. One huge learning is that bonds plunge at the slightest whiff of insolvency. And the risk reward is very poor for holding on or doubling down. At least for novice investors like us.  We watched the bond go down from 90+ to 70+ to 50+ to 30 and no buyer.  Could have sold along the way but did not. Big learning here.

Next few bond failures came over next 1-2 years. This time we learned to cut loss and got out at 70, 50 and one at 30+. 

Bigger lesson is individual bond failures sting badly and its better to get lower yield but be in really safe names. And safe means names we really know well in terms of their finances and jurisdiction.  So no EM bonds for us anymore even if IG grade. Bond professional investors are smart and they price risk reward carefully. So don't get too carried away by the absolute high yield of junk bonds.

Then after 5 years of careful bond investments that did well, we got greedy and listened to a CIO from a Swiss PB and got attracted to good YTM in Asian junk credit this year and bought early without conviction and multiple bites. We even levered for it as expected return over leverage was 7%. Just cut loss as it was never our intention to own more FI. Didn’t feel comfortable to deviate from plan esp once the fund fell by >5%.

3) 300K forex losses. Mainly due to long positions in the underlying asset which is overseas. For us it was mainly MYR, AUD, BRL. The first 2 were unavoidable as we owned a property in KL, have a malaysian startup stake in RM. We also invested in ASX stocks.  For the MYR, we already tried to hedge it by borrowing 70% but for AUD we did not as borrowing cost felt high compared to USD. But these 2 not so bad as our capital gain on the underlying assets more than offset the currency losses. But for BRL, it was a disaster as we used it to invest in IG credit from 2 Brazilian issuers. So while the issuer did not have any problems, the Brazilian real fell 30% or so. Ouch. 

Big lesson here is other than SGD and USD, we now don't want to own other currency as currency risk is totally unpredictable and foreign to us. Unlike equity risk. I would also add owning some JPY or EUR or GBP or AUD is a world apart from EM market currencies. The latter i will avoid at all costs. But the former, i am looking at JPY assets now as leverage is very cheap. Though I am reminding the tail must not wag the dog. Meaning leverage cheap is one plus but it is secondary to choosing the right asset, entry price and bite. 

4) 400K Option losses. We sell puts on stocks we want to own. We also buy calls on esp bullish positions. The losses come mainly from selling puts without enough research and using Private Bank ELNs. ELNs need min 100-200K. So we can't implement our multiple bites and average down strategy. This is very damaging if the ELN gets triggered as if we average down, the position gets very large for us. And if we lack conviction/get thesis wrong, the losses can be big. The other option losses come from averaging down on call options. Its the gambler mindset to want to average down and see a huge win if one gets its right. However, we have learned that call options must be used very carefully.  We now use the full value of the call as our position size and not just the option value. This prevents us from building too large positions in options that have time decay.  

5) 1.2M Equity Losses. This segment is largest but it’s put last as these losses come from 12 trades. So it’s $100K loss per trade. Smaller compared to bond or fund errors. And the reasons for the loss almost all boil down to 1 reason - 

Bought without enough research leading to a lack of conviction on the company. Insufficient research also means no strong opinion on fair value and momentum of company. This leads to us buying in too high and frequently too early and too many times. The above when combined with option losses is what accounts for most equity losses. And number 1 reason for lack of research is listening to  experts or friends. Most of the ideas that come from our internal synthesis and analysis tend to be good. Eg, our own call on QQQ/SPY last  year, call on SEA back in 2018, call on Shinvest, ifast, FB, lulu... etc etc. The ones where a smart professional does a smooth presentation and shares what they recommend tend to be disasters. The latest being the call on asian high yield early this year. 

6) 100k - crypto hedge fund invested in late 2021. Felt rich, joined too late, follow friend and without conviction. After 2 years, it’s also clear the managers aren’t good at generating alpha… riding the Alt coins market down in 2022 and failing to ride even eth and btc up this year.

So that's the sharing we have. The learnings from them can be summarize into

- Don't listen to experts or friends. Never buy because someone else said so and without deep knowledge. Buy because we formed a strong thesis on our own. Interestingly this is different from startup investing where following professional investors tend to be ok..

- Then research and think more until have conviction of where asset is going in near and longer term. 

- Have an entry and exit points for the asset

- Make sure ultimately correct bite sizing for that asset so we can stomach the ups and downs.

- Coldly execute and monitor. Don't ever panic sell or buy. Exception is single bonds, cut loss quick if have chance of insolvency. 

- If using fund managers, esp PE/VC,  go for tried and tested managers with long histories. Not just 1-2 vintage managers who may not have conviction and/or were just lucky to have big winner in one vintage. Also, don't blindly believe what they say esp on mark to market unrealized returns. Real distributions count not unrealized gains.

- Learn to cut loss faster. Applies to all assets except PE funds which cannot exit. This is one of our greatest weaknesses and we are trying hard to always clean house annually and keep to set rules on allocation. For single stocks, constantly review the stocks to reaffirm conviction to hold or add.

- Always stick to overall portfolio allocation which is planned and rebalanced every few mths. Don’t be tempted to move out of it if it’s working as expected.

- don’t borrow to go after smallish or mid size gains. Only leverage if returns are potentially huge to justify the fixed cost of leverage. Gains are not fixed, but interest payments are. 

-for cutting losses, treat each loss in isolation. $50-100k is still a lot of money to lose even if you made 2+m in gains this year. Don’t fall into the bad habit of saying overall made money, feel rich so it’s ok to hold out for rebound on a losing investment. Cut loss quickly once no conviction to hold. This is key to cutting loss well and right now, we are mulling over our China holdings thru this lens….

I hope the above sharing is useful to readers in that it exposes how much can go wrong when one is investing across multiple asset classes. Of course, we have many more profitable investments than losses last 12 years too. And we also have many more learnings from these winning trades/assets. The key is to combine the lessons from the winners and losers to get a sustainable long term investing strategy. 

Budget 2023 and the real elephant in the room

Have been asked what’s my opinion on the budget. General sense is that it’s a more labour and average resident friendly budget than one to spur investment and enterprise. I spent some time reading the full statement and also the various appendixes. I selected some key screenshots of interest to share.

Interesting to know govt is now spending an increasing sum on early childhood. Was asked before during a tea session if I think we need to nationalize this space and my instinctive answer was a YES. Level the field from early childhood so that all Singaporeans have a chance to succeed in life.

The 51b loss is Covid spending mainly. So it’s great we did not need to get into debt and used reserves to pay for it. If it was debt; we would be servicing 1-2b in interest payment yearly. Thats half of the projected gst increase in revenues!

Good to know the actual manpower expenses are just about 10-11% of total govt spend.

Defence spending always high. Don’t question the need for it; but the point about making sure each dollar is well spent is key.

A few key observations on big trends and issues :

1) govt spending has increased quite a fair bit between 2017 to 2023. In 2017, we spent 55.6b  on EOM (manpower), OOE (other operating exp), grants/injections and transfers. In 2023 we expect it to be 83.6b. That’s a 50% increase! 

GDP of our nation during same period I estimate will have increased from 343b usd to 425b usd. So that’s a expansion of 24%.

Broadly this means our govt has gotten bigger as a proportion of  GDP. This in itself is not a bad thing as i can see visibly that our healthcare sector has expanded, our public education has broadened  to include preschool and that there is much broad based support and resources spent to improve wages at low end via pwm and various credit schemes.

My big concern here is that with public service spending and investing more, all the more we must ensure governance, appropriate top level targets, productivity of each ministry and statboard workforce, benchmarking etc are done at top notch level. The total budget is 104b or about 18-19% of overall sg gdp - it’s critical the entire civil service continues to perform and improve at the highest global level. To me this means aiming to run as well as top global private firms with similar headcount at least in key areas of strategy planning, scenario planning and talent recruitment/retention. 

2) We can also see govt projects a small deficit this year.  The NIRC at 23.8b is a very significant component of our govt budget. This NIRC is from our nations wealth kept with Temasek, GIC and it’s there because of the collective efforts of past generations who ran TLCs, sold land and invested budget surpluses well. 

My comment here is we again must not rest on our laurels and need to keep the reserves growing by ensuring Temasek and GIC run at the highest standards globally. This means going beyond governance and going into benchmarking against and beating or meeting top PE and balanced indexes globally.

My sense is Temasek has a much harder job as it has a portfolio of local TLCs which have a lot of history and which unfortunately is a mixed bag when it comes to their success going overseas and growing beyond their local (often case) monopoly. They don’t handle disruption well but we own a big chunk of them. One way out is superior hands-on boards and management that are incentivized to truly build and grow. And be quick to fire bad performers. It’s not wise to always think ex scholars make great tlc leaders. Or at least complement them with commercial chairmen that govt trust to really push them on delivering results.

3) My biggest comment which is not spoken about in budget speech is really about population/manpower. It has been 12 years since 2011 elections. A lot has changed and infrastructure and conditions have improved much to me.

I would ask for leadership and clarity from govt to convince fellow Singaporeans it’s time to come to a consensus on how our society can continue to grow in the years ahead. 

Our working resident population is 2.35m. Our working population is 3.7m or so. We already run an economy that is beyond our local capacity. And we need to spend more in the years ahead to look after all citizens well. 

With our TFR at 1.1, we are doomed as a nation unless we deliberately and consciously add to our ranks. And the best way to do this is to have a proper manpower strategy that adds the talent we want with a view to convert a nice pool of them each year to be PR and citizens. 

5.6m population is not a lot compared to other small nations in the developed world. A 7-8m population Singapore where about 5.5m are resident will really help us thrive as a nation. Better job opportunities, more vibrant local economy , more social variety and better tax situation for individuals too. Each resident pays less tax if our economy is larger.

So what I am asking is for a conversation to start. And we try to have a consensus on common points and see if with those common points, a clearer path can charted on our population strategy. 

As a father of 4 sons, I think it would be remiss if we keep letting electoral vagaries determine how we communicate, educate, lead and agree on this existential issue.

Startup Portfolio Review for 2022 - The pain of costly capital

I just reread my 2021 report and unfortunately a lot of the points/predictions we made one year ago came true. The growth stock rerating lasted the entire year with no reprieve in sight as the Fed raised interest rates to 4+% in an effort to combat persistent inflation. SPACs and IPO attempts mostly all failed as the markets refused to tolerate expensive listed company valuations. Carousell, Kredivo, Carsome/Carro all have to say IPO or SPAC deferred for another 1-2 years as investor appetite dried up on loss making companies. And those few ASEAN startups that did manage to exit in 2020/21 like Goto, Grab, Buka, Prenetics, Propguru all crashed anything from 50-80%. Even the largest ASEAN tech company SEA crashed 76% from 220 to 52 per share.

In spite of the tough investing environment, Ning & I stuck to our investing philosophy and continued investing into 4 new startups and did 5 follow on rounds for existing portfolio. Amount invested 20% lower than 2021 which was a record year for us with 9 follow ons.  As shared in 2021, covid and Ukraine war has caused great pain to 3 of our startups and we have chosen to write them down to zero in 2022. On a positive note, 2022 saw a decent exit from our 2012 investment in an animation startup. Also, in spite of the bad market, we had 5 series A up rounds happening for our first Vietnamese and Thai startups and 3 SG startups. So in total,  for the 41 startups we invested since 2015, the IRR is now ~28% (down from 38% last year) with a TVPI of 2.66 (down from 2.98 last year).

On the VC front, our 8 funds are at 2.6 TVPI mirroring our angel side and actually up from 2021 2.47 TVPI. IRR should be low 20%s as they took capital much faster. 

Putting both angel and VC together, we actually still eked out a small gain of 2ish% year on year for 2022. Hard to believe but there is big caveat. See point 5 below.

Some comments and thoughts :

1) The drop in early stage valuations has happened. The valuations for follow on A rounds have been significantly worse than what founders thought. However, it is nowhere near the levels of how the growth stocks have fallen. ARKK fell almost 70% in 2022, it is only logical that series Seed, A, B, C, D, E valuations fall drastically too. Right now, startups are deferring fund raising if they have cash or raising from existing investors whose interest is to maintain last round valuations. Something has to give and i believe if interest rates stay above 4,5% this entire year, we will see some capitulation and failures from later stage startups which will cascade further to the earlier stages.

2) At Seed level, valuations have fallen 20-30% but its still expensive with no revenue startups valuing themselves at 4-6M SGD. If the later stage fallout happens as described in point 1, then maybe we will see valuations for seed back to the old S$2-3M range which would reflect the risk reward for angels and seed investors. 

3) One silver lining is many ASEAN VCs just raised capital for new fund and have cash to deploy. So it is entirely possible that they can maintain their winners valuations and ride out the storm until 2024/25 where they expect inflation rates to moderate back to the 2-3% range and hence interest rates to weaken and valuations to rebound somewhat. For these VCs with cash, they are in a relatively good place to slowly pick and choose  for new stories and only invest in valuations are good. For VCs who want to raise a new fund, i hear 2022 2H was very tough and i believe it will be very hard to close any meaningful sum for a few months more. Global investors need more clarity on inflation and IR and economy before deciding next steps. 

4) VCs (as of 3Q end) are still declaring good numbers. Two ways to see this. First explanation is the nice way.  Winners can still grow and command up-rounds in bad climate. Some of our VC funds invested in Ninjavan, Carsome, Grab, Buka, Kredivo etc. So its possible to swim against the tide for sure.  Second reason is that VCs have leeway in how they determine valuation. Usual rule of thumb is to keep at last round valuation. But they can also chose to up a valuation if company has no new round but business has a grown a lot. Also, they can continue to fund internal rounds at last round or even up from last round. All these moves allow them maintain valuation stickiness. The game is only up if the startup fails to perform, or lists and stock price drops or if climate stays permanently depressed and new round is down. Then write down becomes inevitable. 

While we can understand the logic of VC behavior, it does contrast with later PE funds. We also invest in some later stage PE funds and because they have many listed investments, they have had to write down 20+% mirroring at least a good chunk of tech stocks revaluation. So it’s important to take the VC numbers with a big grain of salt. 

5) On a personal front, while 30% IRR sounds good, it is mostly unrealized gains on unlisted companies.  The weakness in the ASEAN ecosystem is the lack of distributions. In current climate, I would much rather have a TVPI of 2 and 15% IRR but with 1x DPI already. 

6) This combination of high interest rate + high inflation + geopolitical issues = great uncertainty in global and ASEAN/SG economy. And when we add on our personal asset allocation shift into property, we feel a need to recalculate how much more to invest in startups. Bottom line, we want to see cash returns from earlier investments before committing much more capital into the space. So a lot depends on what happens next 2-3 years. Hitting 50 startups will probably happen but hitting 100 will require more exits. 

Bottom line, capital is now costly. Why would an investor take high risk to earn 15% returns if they can get 8% investing in a relatively safer bond portfolio? And why invest in a loss making unlisted startup if they can invest in google or baba at 12-18 PE ratio? Ning & I remember a time when startups were valued at 15 times profit and that was considered good valuation. And if you are not profitable, your business is not worth much until you show you can be soon!

7) We have actively communicated this investing climate change to many of our portfolio companies reminding them that profits matter a lot more now. I do believe many founders understand that turning profitable is the surest way to navigate 2023 successfully. Quite a few of our startups are either profitable in 2022 or have a clear path to become profitable in 2023. Those who can't are cost cutting to at least show narrowing losses and also making sure they line up equity funding to stay alive.  

It’s not a good time to run a startup now. Costs are rising due to inflation esp wages, but funding is hard to get. Debt is expensive and we expect startups that need lots of debt to suffer in the months ahead. See what's happening to Affirm and Klarna and Carvana. What will drag things down further is if USA economy goes into bad recession with its consequent impact on ASEAN. Then customers too will be hard to find as overall demand shrinks. 

8) Timelines to exit are now all extended at least 1-2 years as many startups will just stay alive and tread water in 2022 and 2023. So fellow investors, please do your own modeling and analysis and base it on a 10-15 year horizon for each startup and VC fund you invest in. With 10 years being a good scenario!  

9) One great thing that happened in 2022 is how the AngelCentral community has continued to grow. Our first investments into Vietnam and Thailand paid off well this year with significant uprounds happening as Series A rounds happened with good VCs. We also had earlier syndicated investments raising Series A in 2022 at improved valuations. So if you are keen to join us, do check out our services to help angels.

Moving forward this year, we intend to continue investing but with even more caution and discipline. This climate is not a bad thing as it removes all the crazy excesses of the 0 interest rate environment. It never did make sense that NFTs/alt coins were worth trillons or that startups are worth 10-30 times their sales even with lousy gross profits. Its a much needed reset for asset prices and forces everyone to get back to basics of profits and cash flow management. 

On a founder or investor individual level, we of course hope for the global economy to not tip into bad recession in this adjustment process and that inflation is curbed with minimal collateral pain. However, an old adage comes to mind - we can hope for the best but we should plan for the worst. Sounds like a good philosophy for 2023!

Footnote : This review focuses only on our startup and angel investments mostly in ASEAN space. if you want to know about overall philosophy in life, pls read annual review on life.

Purposeful Life - 2022 in review

(read earlier 2021 review and 2020 review to get context.)

If I have to summarize the year 2022, it is a year of anticipation and waiting on many key items. This year was tough to live thru as many impt segments of our lives required patience and time to wait it out.

First, the year started with us waiting for Covid restrictions to end and to actually catch covid.  I finally caught it in Feb and took 2-3 weeks to fully recover with no longer term symptoms.  Second was the wait for the painful legal completion of our home (long story) and its subsequent renovation works. Background is we finally managed to buy a new home that is suitable for a family our size + for Dad if he wants to live with us.

Third, portfolio & work also just treading water. Startups side going thru bad valuation downturn and possible recession so have to wait for sentiment to change and for them to grow more. Listed investments also same but we were lucky to liquidate a large chunk into cash to get approval for home loan back early in 2022. So by pure luck, we caught only a part of the market weakness and got out of almost all our USA and SE growth stock positions. 

Family wise, 2 older kids also in holding mode as they are in first and second year of NS respectively. They’re now in NS limbo waiting for it to be over so that they can resume studies. 

Of course, i understand that these things are part of life and  we try to be positive and remember that each second is precious and to make the most of each day but it’s not easy with so many things in limbo. 

One positive major highlight is the resumption of travel. Once some of family got Covid, Ning & I resumed travel and in 2022 clocked about 63 days of travel to Sydney, Phuket (twice), Bali, HCMC, KL, bintan, Cempadek island and northern Italy. Lots of sea and beach time. 

In terms of philosophy on living, don’t think much has changed. To recap, i have centered myself on the 3 purposes below.

Purpose 1 - Help and be there for family. Extend to friends if i can.

Purpose 2 - Be as healthy as I can

Purpose 3 - Be a good custodian of wealth and knowledge. help grow startup ecosystem via angel investing & AngelCentral.  Contribute to broader society as a volunteer.

Purpose 1: House hunting and being there for family. Share and guide kids more. Maintain friendships.

We finally decided to get a bigger place that can fit our 4 sons without room sharing and also have a room for Dad in case he needs to stay with us. Quite a testing saga to do this purchase as property market was running hard in 2021 and 2022. So many unethical sellers… Anyway, long story short is we managed to find a lovely new place, took 5 mths to renovate and moved in mid dec. So one source of limbo is gone for 2023 onwards.

Best part for the entire year, we stayed with Dad at his home for the year as we had to sell our old home and new place was tenanted. Staying with dad turned out to be good fun and I missed him when we moved out. Now he has decided to stay with us a few days a week so let’s see how that works out.

Needless to say Ning went thru a similarly tough year but as usual she has a just suck it up and do it attitude. And she is much clearer and decisive on some things which helps us decide quickly and accurately on them. 

NS boys we try to be as present for them as much as possible. All independent already and big one partying quite a bit. Next year will be a big change for all as he enters university. Number 2 surprised us all by entering the finals of a radio singing contest. Very exciting for us all to vote and attend and cheer. Number 3 also developed a lot as a student and as a sportsperson and we had fun attending his swim meets. No 4 still a small boy at 8 years old and is lots of fun to have around.

It’s tough guiding kids. Don’t want to be too prescriptive yet want to help them as much as is reasonable. We find gestalt style sharing works for older kids but sometimes also still need to be definitive esp on key items Ning and I agree on.

For friends, still same maintenance mode. Couple of dinners, double dates and a fun canoe trip with an old friend in ubin.

All in, I would say managed to keep present for loved ones in 2022. Being able to travel with them and wife helps for sure too.

I would rate an 8 out of 10 for the year.

Purpose 2 : Health in mind and body. Weight below 70kg.

Health stayed good as we built up routines to fetch son to camp and just do an early morning jog near camp. So we have been discovering lovely jogs near changi point and also along upper Thomson. Mind wise, mid and year end we faced significant stress. Partly caused by house moving and partly because investment climate has changed a lot and our asset allocation has also changed. I do think some time will help us get used to new returns expectations and consequent cash flow dynamics. More on that below.

I would rate a 7 out of 10 for the year. Weight was about 65-67kg throughout. 

Purpose 3: Preserve & Grow Wealth - 10% annualized net on investments + Quality startup angel work for 100 startups + good volunteer 

Hard to grow wealth in 2022 with stock, bond and crypto markets plunging. While we managed to largely avoid the downturn in growth tech and crypto that crashed 50-80%, we did get hit with our QQQ and China tech positions. For the year, that puts our equity/bond portfolio side down about 12%, painful but it’s not damning. Really proves the importance of diversification and investing for the long term. Having some SG banks and REITS help balance out the USA and China losses.

Interestingly, we are up slightly on private equity and up significantly on property this year. The latter is expected since URA PPI is up 8-10% this year alone. The former was aided by an exit and some distribution from VC funds which are offset by sizable write downs on paper gains on PE funds side. Remember I put Vc and startup at book unless realized. Will analyze the startup/VC side in another post early next year but we are already feeling there is a need to cut back until we see concrete startup returns next few years. So 50 startups will hit for sure, but 100 we probably want to see returns first so that can recycle capital.

All in, last 12 years has been dragged down to 8+% annualized if we mark to market. No complaints but I am mindful a big chunk is still unrealized gains from PE/startups. All in, this is the first year overall portfolio go into the red since the start of tracking in 2011.

Finally on the volunteering front, continued with PEP, IPOS, ITE, SWCDC, NRF and added on a new role on the board of SCHS. It’s the land owning entity of HwaChong and also owns the international school. I help out with strategy, investments and on the school mgmt committee for the intl school. It is currently the most involved of volunteering work as the school is not as well resourced and established with process and strategies like govt entities. 

I would rate this purpose a 6.5/10 for the year. It would have been 5 due to invested cuz down is down. The mitigating factor is volunteer work, property and PE exits/write ups.

Overall 2022 has been an okay year for me. Many more challenges and stresses work wise than 2020, 2021 but as always a lot to be grateful and happy for too. I hope 2023 is a year where things are clearer on more fronts and less in limbo. Continue attention on family and health. Asset allocation done so hope to be largely correct and see the portfolio recover back into the black. And see more of our startups turn profitable and grow well with or without VC funding. Also, may have to drop one volunteer work as its getting to the point where I feel too stretched.

Back to the 2000s for startup valuations?

Have been watching and analyzing the public tech markets and broader markets for the year. Like everyone else, I have been taken by surprise by how rapidly valuations for loss making growth companies have fallen. Some examples ranging from those with really bad financials to those with slightly better ones:

1) Carvana has fallen 90+% in value. It’s now trading at just 1.65b usd or about 0.15 times of its revenue. So what does that say about what carsome or carro is worth and the IRR and TVPIs of their VCs?

2) SEA has fallen 88% from peak and is now worth just 20b or barely 1.5 times revenue. And they have a profitable gaming unit some more.

3) Grab, Goto, crowdstrike, twillo, teladoc all crashed 50-90+%. 

4) QQQ which is profitable big tech mainly has fallen 34%. But at least the valuations are supported by profit. That’s an important point- profits and not revenue now support valuations more.

5) And to add to all this pain even China tech and consumer companies- which frequently are profitable too have not been spared. They too are down >>50%. Their issue is a combination of worldwide revaluation + slowing economy + lack of trust in Chinese markets. 

For us in Asia, I am hearing most investors are hit bigger by the China & SE drop than by the DM fall in the form of QQQ or SPY as we started the year feeling that China stocks were cheap.

What does all this have to do with earlier stage startup founders in Asean? I hope I am wrong but current multiples remind me of post 2000s tech crash when it was normal for tech companies to be worth something serious only if profitable or approaching profits. A company with 10m revenue and 3m profit back in 2005/6 was worth more than a 100m revenue company with 10m losses because it is the PE ratio that matters more.

And the PE ratios for fast growing companies were usually ranging from 15 to 40. So the profitable tech company with 3m net profit off high gross margin of 70-80% was still just worth $45m give or take depending on growth rate. But the loss making one is probably worthless to public market investors or just worth its NAV esp if it cannot show path to profits and has widening losses.

So if I am a founder today running a loss making startup, I would plan for a “profit and cashflow hungry” capital market. Revenue growth matters much less than narrowing losses and profits. It’s also far more sustainable.

And if I were a fund, I would aim to make the current portfolio profitable and focus on getting distributions for LPs. Forget about raising a new fund for a while until the dust settles. Any LP will want to see this situation clear up and stabilize first. We also want to see distributions being done before just believing in current fund IRR and TVPI as it includes unrealized gains which have not reflected public market reality. Very soon LPs will see that 6x tvpi and 40% IRR means little if distribution is only 0.1x for a 6-7 year old fund. I would much rather have a 1x distribution and tvpi of 3x.

Unfortunately, there seems to be a state of tension going on between optimism/kicking the can down the road and being honest and realistic. Eg. bridge financing is needed but are still being done on last round valuation even though clearly the listed comparables have crashed to a 1/3. This deliberate mispricing by VC and PE funds is self serving behavior and will result in unhappy LPs if the write down ultimately happens 1-2 years later. 

Let’s see how this plays out. I would not be surprised if this downturn worsens on revenue front as businesses and consumers cut back.  if that happens,  there will be big loss making startup failures or down rounds in 2023 or 2024 as there is no way to justify 10x or more revenues when growth disappears and profit is absent.

As investors, we have been hiding out in profitable companies for listed market (only one nostalgic position in loss making SE) and some quality bonds since start of year. Even so, still down for the year but better than Acwi benchmark. For startups, we intend to continue investing but we will only do so at reasonable market valuations led by new lead investors to the round. No internal round at last round valuation for us if business has not improved dramatically.

As for our existing portfolio companies, we continue to ask them to prioritize ebitda and cashflow over revenue growth. Don’t count on always having investors to fund you and instead get customers to do it. Focus more time/energy on product, on customers and on employees. That always pays off.

Happy to see that many of our founders seem to get this and have moved to lower spend and drive revenue growth.  In the 2000s, it  was normal and desirable to turn a net profit if you have a few million gross profit. It was also normal to grow costs only if revenue grows in tandem or better still grows proportionately more. It’s time to bring that mindset back in vogue and stop being proud of losing money and using investor money to stay afloat! 

Recent angel investment exit during market crash

We recently exited one of our earliest angel investments in an animation company. Return was about 11-12% IRR over a period of 10 years. On a scale of things not a fantastic angel return but we feel its decent considering what we know of the industry now and current funding climate.  

We met the team back in 2012 and were impressed by their experience in animation and also back then, there was a desire to build the animation industry in Singapore. The idea was to use state of the art in house software to improve animation studio productivity while at same time also develop a franchise of quality animation characters. As its one of our earliest investments, we were still quite green and invested a sizable bite (a few times our current first cheque) and also did not care whether the company had a lead external investor or whether shareholding was well aligned.  I also did some initial research and actually could not find any recent listed comparables with the exception of Zinkia which owned Pocoyo. Anyway back in 2012, we just sold JobsCentral and so felt quite cash rich.

The company quickly managed to attract more funding at better valuation. However, as they executed, we quickly realized how hit driven the industry is and also how much cash it needs. And even if one creates a franchise with decent traction & feedback, its still a tough journey to sell to more broadcasters and even tougher to create sizable merchandising revenues. The company had to make ends meet by doing some production studio work for big brands. But just like software integrators, every resource spent on outsource work is a resource missing to build a good internal brand and product. 

What changed things in my opinion is the rise of youtube and other free to stream platforms. By placing content on these platforms worldwide, the company managed to earn decent, high margin revenues from ads and also place their characters in front of millions of kids worldwide. The covid crisis helped further as more kids spent more time in front of screens. All this was not contemplated at all in the original business plan. So kudos to the team for not giving up and always looking for new ways to grow the business. With this new stable and growing revenue stream, the company managed to turn profitable. 

Some takeaways & learnings.

1) Industry matters. Space like movies and animation very hit driven and distribution matters alot. Production talent alone is insufficient. And the fact that i could not find any strong independent studio back in 2012 probably was a big warning. I would not invest in movie or animation production now. Also its very unstable. Zinkia is not doing well at all now. Only franchises owned by giants like Disney or Sanrio have staying power.

2) Company ended up consuming quite a lot of capital. So that diluted returns. So initial valuation and bite size matters a lot. All this is no brainer in hindsight but it does mean having a founder who does not give up and good at financing deals is important.

3) Industry sometimes has huge shifts. In this case it is the free to stream segment. Catching it early to create ones channel and mindshare on youtube and like platforms matter a lot.

4) Profitable, own strong IP and growing is a great combination. Not only have much less funding pressure, such companies will be attractive to buyers in all markets. This deal was concluded in May 2022 at the depths of a 6mth down market on growth stocks. 

5) It really does take 10 years to grow a business. I hear angels who speak of exiting in 5 years and seed VC funds whose fund life is 7 years. I dont think they factor in sufficient time for their portfolio companies and for VCs, that can cause problems for themselves at end of fund life.

6) Paying attention to Secondaries also matter. Company had a shareholder who had to exit for personal reasons. So the price per share was very good and we picked up a little more as part of pro rata and right of first refusal. That extra bit helped juice up returns a fair bit upon exit.

Overall, this sale together with some new up rounds this 1H2022 helped improve our overall angel portfolio since 2012 to 28+% IRR and 2.78 TVPI. And for the more active period from 2015 to 1h2022, it’s 39+% and 3.03 TVPI. 

Hope this sharing is useful for fellow angels. 

NB :Full bite size investment up front worked for us in this case. But i think more of luck and it does not change our current bite strategy.

How will the current stock market rerating affect our startup scene?

A fellow angel asked us the above question. Ning and i discuss this a fair bit as we have both public and startup equity. I actually summarized some initial thoughts back  in Jan article on Sea’s stock crash. Unfortunately the trend has not just continued but has deepened. 

It should be pretty obvious for investors and founders who watch public markets that there has been a rerating of valuations in the tech space. Both stable profitable tech as expressed in QQQ (Nasdaq100) and loss making growth tech as best expressed by ARKK (Ark Innovation) have dropped 21% and 49% ytd respectively.

I think with interest rates scheduled to rise more to control inflation, it does look like this trend is good for a while until inflation shows clear signs of abating. That may take 6mths- 1 year.

So how does this affect our local and regional startups? 

The most obvious hit will be for the late stage ones who are near IPO. SPACs are dead no thanks to dismal stock performance by Grab post SPAC. And don’t get me wrong, for grab mgmt and founders it’s a great timing move to raise the 5-6b at peak of bubble and dilute little. But for all investors who invested above 10b valuation, it’s losses all around. Same thing can be said for Buka and Goto. Interestingly, Goto raised only 1+b as investors can see what’s happening on grab front.

So what the above means is that no more easy Spac near term and IPO will be also be hard to bookbuild.

So if I am a late stage Vc or PE investors, I will be looking at the current public market valuations to value upcoming rounds. Cuz that’s the exit I get at best in near term. So at least 30-50% haircuts all round?

Eg carvana is now trading at 0.8 times revenue. How does that affect carro and carsome valuation who raised at 2-3 times gmv?

Or even profitable tech like tencent, baba, Google and fb are at 10-25 forward profit. So even if our local tech startups turn profitable, are they worth 50-100 times profit if growing at 30% per annum? Probably 30 times is fairer? 

A barometer to watch will be if carousell and carsome can do their IPO or SPAC. If they delay or pull, it means public investors have drawn a conclusive recent lesson from Grab and like.

How about earlier stage startups? Those B round and earlier ones? 

We don’t see any big impact on seed valuations yet. Though logically it should cascade to this area but maybe need to see the prolonged pain another 6 mths first. If I am a seed founder, I will quickly raise if I can and be more flexible on valuations. If i am an investor, I will continue investing this period as it’s good timing for the upcycle in a few years time. Companies formed during recessions and tough times tend to do well when the upswing comes. 

But I will be more discerning and take my time. As a reminder, seed valuations before the rapid rise of last 5 years, used to be 2.5-4m sgd. A rounds used to be 8-12m sgd.

What if I am a startup founder 

Of course fund raising is still a sales game, if as a late stage founders, you can sell a great story and convince investors to still pay more vis a vis public markets, kudos to you.

But if can’t convince, then the solution is to turn profitable or at least narrow losses and work with the cash on hand. And if cash not enough, then a down round dilution may be in the cards. 

There is also another less obvious fallout. And that’s on the value of stock options across loss making tech industry. I am sure sea and grab employees who did not cash out will be feeling the pain of worthless options. So you may find esop less valuable as a retention tool.

Looking at our portfolio startups, many are focusing on profitable growth instead of revenue at all costs fueled by super cheap investor money. I strongly believe those that do it well, will reap great rewards when this cycle turns. 

What does this all mean?

Actually I think this reversion to the mean is normal for markets and good for our ecosystem. It will flush out the excesses of the last few years and expose startups who are swimming naked and have no real sustainable business model. Investors who blindly chase the next hot story will also learn their lesson and be more discerning for the next deal. 

And let’s not draw the wrong conclusions. Crashing valuations and stock prices is a reflection of the risk reward investors want. For profitable companies, valuation matters a lot less except in the area of esop and pressure by shareholders. Truth is, they have time on their side and perhaps opportunity too. 

From what I can see, all the easy money whether in public or private markets has been made last 4-5 years. I won’t bet on a quick recovery any time soon unless inflation magically disappears.

Thoughts about SEA limited (& other plunging listed tech stocks) and implication on tech startups

Was discussing SE today with Shao-Ning Huang. We were lucky to spot it in 2017/8, and bought our usual bite. The position quickly grew to be our top holding by far.  We sold on the way up and closed out position at 344 last year not due to any timing brilliance but because needed the funds.

When we spotted it, SE was trading at $10-20 or just 4-5 times sales, mostly profitable gaming and growing revenue 100+% per annum. we felt was a no brainer to buy! moreover, the gaming and e-commerce space are both huge. Sweetener is lots of Chinese high alumni working in SE.

So what do I think of SE now at 138? At 138, it’s trading at 7-8 times forward sales and the growth is slowing esp at gaming side. Gaming revenue also more fickle and hits can lose favor. Also now composition of revenue is a lot of loss making ecommerce. Add on the rising ir environment which bashes down all growth valuations and the picture is not rosy for stock price.

So we will correspondingly adjust our bite sizing and expectation. Recently sold some puts from 100-145. Aiming to build a normal sized position at anything below $120 blended. Won’t go crazy to buy beyond normal bite unless it plunges irrationally below $80. And If plunge for good reason also won’t add.  

Bottom line: easy money made on SE for foreseeable future. Likewise for many loss making growth stocks. Be very careful everyone.

Side note:  results coming out in Feb will say a lot on direction. Likewise for grab coming results must see before doing any big move on it. Also it’s not all rosy for us in this downdraft too. Caught by surprise by the depth of Chinese tech sell down. Easily lost 0.5m there since Jan 2021 to now. Lucky kept to bite sizing discipline and did not add. Falling knife can keep falling.

HOW ABOUT TECH STARTUPS?

So how about unlisted tech startups valuations. If listed side falls to 5-10 times forward sales, how much you think a much smaller and also loss making startup should be worth? Quite concerned here as we have big positions in tech startup space. Looks like we have to be even more disciplined to make sure don’t overpay for new and follow on funding. 

A sure test ahead will be the various spac attempts and loss making unicorns trying to fund raise and/or create exits. Will they have large down rounds coming up or will they be able to still list or sell out at decent valuations? 

And for founders, better build something profitable which gives you infinite runway or at least make sure you plan for poor funding climate where there may still be VC money or trade sales or IPOs but investors want much lower valuations. 

Startup Portfolio Report for 2021 - Liquidity trumps covid

2021 has turned out to be a banner year in spite of Covid. As I mentioned in my life review of 2021, Covid has resulted in greater inequality and unfairness in the distribution of world resources.  The reason is because govts have to inject lots of money into their economy and keep interest rates low in order to save jobs, certain industries and not cause a downward spiral. And while much of this money helped do just that, a lot of it also flowed to inflate financial assets and that means listed stocks, unlisted stocks and even crypto assets, properties and commodities.

We invested in 6 new startups in 2021 and did follow on rounds with 9 more. This is a new record for us in terms of amount invested.  Add on our Vc investing, we have invested over S$7m into the ASEAN startup space. As of end 2021, 41 startups and 8 VC funds. 

Generally 2021 has been a good year for the startup ecosystem and hence our diversified portfolio. Only the travel and events related startups continue to hurt badly and we do expect to maybe see 1-2 failures this year if they are unable to raise capital. However, almost all the rest grew significantly business wise with healthcare players like Homage and Alodokter growing a lot and raising large rounds at much higher valuations.  We also had Patsnap that became an official unicorn.

We did have a execution specific problem with a centaur startup that resulted in a 1+m write down. It’s clear it’s execution specific because another startup we have from similar space just turned around to good numbers. As a result of this write down, our direct startup investments did not improve on IRR though it’s still a great performance. From 2015 till end 2021, IRR is sitting at 38.83% (drop from 40+% last year) and the portfolio has a 2.98 TVPI. 

VC did very well as they did not suffer from any major winning startup write down. The 8 funds we invested are at 2.47 tvpi (from 1.98 last year) with IRR harder to calculate since all slightly different vintage and drawdowns. But we started investing in 2014-2015, so I would estimate IRR  in mid to high 20s.

Here are some learnings and thoughts we have:

1) Investing in the same sector may not be such a bad idea provided we are clear not to share info across competitors. At least we still get to participate in the sectorial growth and have 2 shots at the goal instead of just one. But it’s important to make sure both founders know and to not reveal any sensitive info.

2) Diversification and bite sizing matters. Having 41 startups allow for portfolio to handle black swans like Covid. Similar bites also allow the winners to do the hard work of lifting up entire portfolio. Last thing we want is to have a 30 bagger on an undersized position. Furthermore by investing in 8 VC funds, we have another 100+ to 200 startups in the region. This adds to diversification and also adds on an indexing effect.

3) VCs are a good asset class if riding the cycle up. We started in 2014 on the thesis rising tech/startup tide will lift all boats. True enough, VC funds rode the upswing. If you study almost any of the Vc funds started back then, they all have 1,2,3 great winner that return so much that it should have returned entire fund. Vertex, Jungle, Monkshill, wavemaker, Goldengate, 500 all have their own unicorns and centaurs. 

But it’s important to note fees really affect things. The current difference between our own startup portfolio and VC is almost entirely the fees and carry.

4) Startups will require a lot of follow on decision making. Our policy is to generally follow all bona fide next rounds up to a limit of about $200k. But we are beginning to wonder if it is worthwhile following less strong bridge rounds. On one hand we want to support founders but so far the data shows many bridges tend not to work out that well.

Looking ahead this year, we expect to continue investing in 5-6 startups and for sure there will be some follow on. The funding climate should continue to be strong as we know VC dry powder is still aplenty. 

One big danger is the current rerating of high growth loss making listed stocks. Grab, Sea, Buka have all crashed anything from 40-50%. Likewise other nasdaq listed counterparts like crwd, OKTA, palantir etc. If this continues or worsens, there will be a rerating at PE level and hence startups will also be affected. An upcoming barometer will be if carousell/traveloka/carro etc SPACs can happen and if they happen, how they trades. Crashing like Grab for a prolonged period will make future SPACs fail. It’s telling why these startups  are not IPOing normally like sea or razer did. I believe it’s because SPAC has biased price discovery and so they get better valuation and less oversight in a bubbly environment. Hope those we are vested in manage to squeeze in their SPAC in time! 

Anyway, rerating of valuations and the subsequent liquidity squeeze need not be a bad thing as it will show who is swimming naked when valuations drop and profit margins come to fore. 

So to fellow investors, do be thankful for your gains and remember to give back to the society that enabled it. For fellow founders, the easy valuations and fund raising could get harder, focus on building both a profitable and scaled up business. That way even if really funding gets tough to obtain, at least you just grow slower by reinvesting profits and not end up with a distressed situation. 

Purposeful Life - 2021 in review

I had hoped that 2021 would be a year where life got back more to normal. But instead it just felt like a re-run of 2020. Quite tough year actually as I felt very stuck. In fact this year made it very clear that doing well at work or portfolio has a weakened  link to happiness for me. The link was super strong when I was in early 30s for sure. 

Being an internal scorecard person who enjoys experiencing old and new things, being restricted in movement, socialization and travel hit hard this year.

Turned 46 this year and when I reread last years review post, glad to know the 3 purposes i wrote down and the values associated did not change. Though I must say purpose 3 doing very well numerically but not resulting in more fulfillment is worth paying attention to.

Purpose 1 - Help and be there for family. Extend to friends if i can.

Purpose 2 - Be as healthy as I can

Purpose 3 - Be a good custodian of wealth and knowledge. help grow startup ecosystem via angel investing & AngelCentral.  Contribute to broader society as volunteer.

Quite a lot happened on all 3 fronts.

Purpose 1 :  Good relations with Family & Friend & contribute to their lives

Goals: High level of family/wife/friend time. Share more learnings with kids.

Oldest son enlisted in April. 2nd son had A levels, 3rd son entered Sec 1 and 4th son entered P1. All major life events for kids. So this year, wife & I had hands full ensuring all 4 get the right attention and help when they needed it. Its very hard to do it all well. We tried to have family bonding time by singing Karaoke at home, having staycations during March and Dec holidays and family dinners daily where we discuss topics or share our day. But as the kids get older, they become adults and we just have to hope we did enough right for them to be happy, fulfilled and useful people. 

Dad turned 80 in Dec and the great news is that i am now staying with him for a couple of months this year while waiting for new place. Got a new place as we need a larger space for 4 fast growing kids and we ourselves need more space. Definitely consequence of Covid. It has been fun watching Dad go about his daily life these few weeks. A good role model on aging actively. 

As for Ning, we are closer than ever with so much more time to spend together. We celebrated our 20 year anniversary so busy with moving house that all our plans of a photoshoot or travel or even staycation took a back seat. Hopefully can make it up in 2022. I must say finding a life partner that grows alongside you is super critical to happiness and achievement. I am very happy to have found one and I hope she feels the same way about me too.

As for friends, time with them really fell this year with all the restrictions happening. A lot of meetings for forum/peer groups happened on zoom, old school friends met opportunistically whenever we could meet in groups of 5 or 8. Even managed to attend a wedding for a relative. But these in person social events were far and few between. 

So while i can say i managed to continue on family bonding, friendships took a big backseat this year. Hope to remedy that this year with more socializing when allowed.

Purposes 2  : Be Healthy Mind and Body

GOALS: Keep lean, weight below 70kg. Control mood better through exercise and mindfulness.

Managed to keep to a regular exercise routine of 4-5 times a week. Weight hover 68-70kg. Mostly jogging, yoga with more swimming compared to 2020. In fact, i found myself heading out to the beach almost weekly at one stage. And i would spend a good 3-4 hrs there just chilling and swimming. Singapore has one or two nice beaches still with decently clear waters on some days. Interestingly, the beaches are mostly empty though Dempsey is always full during this WFH period. Don’t make sense to me but I am not complaining.

Purpose 3 :Portfolio mgmt & Work role in Society

Goals: min 10% long term annual growth on investable net worth.  hit 100 startups for angel investment doing well as a portfolio. Quality volunteer in any such work I take up.

Portfolio Work

Its very strange that COVID has resulted in one of the best years portfolio wise. Portfolio overall went up by a record high teens return with PE fueling most of the gains followed by the public equity markets. The market is fueled by huge liquidity and low interest rates. I am not sure how long this party can last but my gut says its reaching the end soon. There is already a clear rotation in the public markets where loss making growth is being sold down in favour of financials and value stocks. China tech is our sole detractor this year losing a good chunk due to the crackdown on BABA and like. We are holding but not adding. We are also mindful that PE gains esp startup gains can be ephemeral and may disappear overnight. So we always keep them at book value.

I am still very much focused on compounding over the years at a good rate. One good practice is that Ning & I sit down monthly to discuss portfolio like a business and we make decisions jointly that are split up for execution. This formalization of activity reduces stupid decisions when investing and also fosters accountability. We are also mindful that the more systematic we get, the easier it will be to involve more family members down the road. 

The other confirmation/takeaway i have is that the capitalistic system is really very unfair and it reminds me that those who benefit really must try to do more to be generous and fair minded to everyone. This global pandemic has greatly enriched people who invest in stocks and private equity. Since 2018 to now, an investor in S&P500 would have almost doubled their money! So while some workers have to rely on govt help to tide through the pandemic, many others have made much more money just by owning shares. From this angle, China's push for common prosperity as a resource allocation philosophy is not wrong at all. 

Startup/AngelCentral Work 

Angel portfolio side now at 41 startups in total. We invested in 6 more startups this year and a few of our startups had large uprounds. Likewise, the very tech heavy VC and PE funds we invested in also had large writeups. Combined, our PE side was up 20+% on mark to market basis. The only exception remains the L Capital Fund which has continued to write down. Really the saying that a dog will stay a dog holds true in this case. We also had a startup in the travel space that continues to be badly hit by COVID. See analysis of startup portfolio for 2021.

On AngelCentral side, under Ning leadership, we continued to grow and carried on with our mission of building effective angels in ASEAN. As an angel club, we funded another 5-6M into various startups and successfully helped them form 6 new syndicates. What is heartening is that we also see other syndicates and angel groups being formed. While on one level it is competition, on another level it bodes well for our ecosystem to have more activity and validates that what we do is useful. 

Volunteer Work

Continued volunteering with ITE, PEP and SWCDC. I don't believe in constantly seeking new titles and roles to do. I believe real value get created when one sticks to a commitment and role. Having said that, I may find a new commitment this year to do more for. Also need to catch up on charity giving since we want to give away 2% of profits/income made over time. 

 

In Summary, my goal for 2022 is much more of the good stuff of 2021, but with an added dimension of going back to traveling. Aim is to have a short trip in 1Q. hope it works out! Not promising no thanks to omicron rise…