YouSaid · the spoken record

Alan Chiu

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24
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2015-06-18
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2015-06-18
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1
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  1. “So we recently invested in a fintech company in the personal credit space. There's not a lot more I can talk about that because the company is still in stealth mode, but the entrepreneurs, the perfect entrepreneurs for this problem space and the two co-founders are very complementary of each other covering both the product side and business side of the venture.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I recently spoke with a realtor who has just bought an Apple Watch and she was singing his praises of how he's changed her life and making her less dependent on her phone and leading to much better client interactions”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Long haul transportation because there are a lot of inefficiencies, technology hasn't really deeply penetrated that industry, but with a combination of netted devices and mobile, I think the time is right.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Actually, knowing how long to hang on to an investment, when to sell, sometimes VCs sell too soon or investors in general for that matter, sell too soon, especially in today's funding environment where later stage rounds are often pretty substantial and they offer opportunities for early stage investors to sell to these later stage investors. But some of the best companies will still have a very exciting growth curve ahead of them even after these late stage investors have come in. And the greatest VCs know to identify which companies still have a lot of potential and hang on to their ownership in the company despite having made 20x, 30x, or 50x in the investment because they know that this could be a thousand x return. And that takes experience and Takes a lot of discipline to resist that temptation.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “The stars are going to become famous. You're not going to become famous. But if you're doing a job right, you're going to be finding a lot of these future rock stars.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “We've seen a lot of great VCs come from varied backgrounds. So first of all, I don't think you have to have done certain things in your life to become a great VC. But one of the things I've observed with great VCs is they are very good at reading entrepreneurs, in picking the entrepreneurs that have the perseverance and the right balance of strong conviction and adaptability to both pursue the vision with relentless grit, but also be able to adapt to market changes and customer learnings. One of the very experienced and successful VCs that I met with early on in my VC time once gave me this analogy, being a VC is like a talent scout. The entrepreneurs are the stars of the talent that you're looking for. You are the scout. You are acting in the background.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “If things are not going well as well as you expected, go back to your key assumptions underlying your business model. Some of the key, one or more of those key assumptions have not been proven out and that's why things are not going well. So go back to those key assumptions and really ask yourself, are they true? And if you don't know, then come up with experiments that you could run with your customers or users to either validate or invalidate those assumptions and go from there.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “And those pivots rarely pan out because there's an infinite universe of possibilities to test with very limited time and capital”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “That's your question number one. Question number two How long do you wait to pivot? That's a very, very hard call. And the best pivot that I've seen are the ones where the founders have noticed that something on the side outside of their core business is actually thriving or might even be growing, getting more attraction, more quickly than their core product. And they notice something interesting going on and they start testing that out to see if the signals are real. And if that's real, they go all in. So there are already strong signals in place of what's to do next. Those are usually the best pivots. The worst pivots are the ones where the team has come running to a wall in the core product that they have no idea what to do next. So they start testing randomly.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Two very good and challenging questions. So how important it is to have a product roadmap, I think is critical because in the technology space, your competitive landscape is extremely dynamic. If you only have enough ideas for the initial version of the product and then you have no idea what your subsequent versions are going to be, chances are you'll be overtaken by your competition very quickly. Now that's not to say that once you've got a product roadmap, you're stuck with it, right? We understand that you're going to adapt and change your product roadmap along the way based on what you learned from the customers and from the market. But we believe you need to go in with a vision, with a very strong vision about how the world eventually is going to be different and better because of you and what's the path to get there. Understanding that this path will necessarily change along the way.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “In our specific case we would prefer the company to own the technology because we believe, we invest in companies that have a technical advantage. But if the way they leverage outsourcing is to build an early prototype to figure out if they have product market fit before they spend serious engineering time to build out a full-blown product, that's okay. So it really depends on how heavily dependent they are on the outsourced resources.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Well, in a general sense, I do not believe non-technical co-founders are a big red flag at all. There are a lot of amazing companies founded by Nantechnical co-founders. It's just when it comes to X-invest investment focus, we have a preference for companies that are built on unique technologies. So that biases us towards companies that are founded by technical founders. The best founding teams actually are teams that bring together a very strong technical co-founder as well as a very strong experienced non-technical commercial co-founder. And between the two of them, you've got the product and the business side of the company covered. In the early stages of the company, there are really two things that you're doing. You're building a product and you're selling it.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Certainly there is a level of personal compatibility that needs to be there once you've signed, once an investor has invested in your company, you can't get rid of them. You're really committed. It's almost like getting married. So you want to look for someone with personal compatibility with you. But in addition to that, you also want someone who could help you in areas where you need help. So for example, let's say you're a technical co-founder, you know a lot about the space you're tackling from a technical standpoint, but you've never run revenue before, you've never managed a sales team before, or you need help on the commercial side. Well, you probably want to look for an investor who either has operating experience in that space, a commercial operating experience, or who knows people who could act as your advisor and potential hire to help shore up that part of your”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I think really it varies from firm to firm. It depends on the culture of the firm. There are firms where it's really acts as a broad umbrella for partners that pretty much operate independently. There are other firms that have built up a large support team to help the portfolio companies.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “It would take us more time to get to the same level of comfort. Now the entrepreneur could mitigate that by coming to us, having raised a little bit of angel funding and having built a product, launched it, and generated a meaningful level of revenue, 30K a month, 50K a month with strong growth, that will help get us over the fence as well to believe that there is a real market here.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Have they got a complete team to go execute against this opportunity? And on this second one, we're actually willing to be flexible because we're see-stage investors and oftentimes at this stage you don't have a complete team yet. And we have a very strong network from which we could recruit and help these teams fill out their management team. The third risk is market risk, and this is the biggest risk that we are concerned about. Will there be customers at the end of the day? If it is a space that we believe we know a lot about, we've spent a lot of time with the customers, or it's a space in which we have built companies before, we're probably more comfortable taking an earlier risk because we feel like we have a sense of what the customers want and where the market is going. But if it is an opportunity in a space that we are less knowledgeable about,”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “given our stage of investment at the seed stage, oftentimes we invest in companies before they have a product or before they have any meaningful revenue at the highest level we evaluate each investment opportunity Along three types of risks. One is technical risk. Will the technology work? Would the product deliver on its promise? So that's risk number one. We actually like companies that have a high level of technical risk because we believe strong engineering talent can overcome technical risks. And if it's actually difficult technical problem to solve, it means there is a higher”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “If they are not located in the Bay Area here, one of the best things they can do is to make sure that they're building a viable business and have strong growth in terms of customer attraction, in terms of revenue to prove to potential investors that their idea is more than just a hypothesis. The business that they've built is actually the very beginning of a multi-billion dollar venture.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “I would say there are certainly other startup ecosystems in which investors are willing to take a risk on startups, but not at the same level of Intensity, I would say, and there's certainly not nearly the same level of concentration of investors.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Certainly the talent, the people, the access to resources are all critical elements. One of the key factors that set Stanford Apart is proximity to Silicon Valley and the San Francisco Bay Area in general and the density of successful technology companies as well as startups that have been built and being built in the area as well as the density of risk capital, venture capitalists, angel investors who are willing to take a bet on unproven unknown young talent.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “And it turns out actually it was actually raising a new fund at that time. And the investment focus was going to be on in the enterprise space, which is my background. So I kind of showed up at the right place, right time, and joined XC as a result.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “It was a little bit serendipitous actually. I wasn't as if I had a strategic plan to become a venture capitalist. I actually was going to start a company graduating from Stanford, but after experimenting with four different ideas during school and doing a lot of customer development work, I still hadn't found one that was so compelling that I wanted to spend the next five to ten years of my life building. And so I started looking for product leadership roles in startups instead. And during that process, I was speaking with a number of venture firms, including Exeed, to see if there's any fit in the portfolio. And one of the general partners at Exceed Rob Siegel is also a lecturer at the Stanford GSB, and I had taken some of his classes while I was a student there. So we had a very, very open conversation.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Very early stage network security startup as their first engineering manager shipped our first product, moved into product marketing, but unfortunately the business didn't take off. So we closed down after two years. And then the third startup was called ByCast, which was a private storage cloud software company. When I joined, we had one customer. I started in professional services deploying our solutions in the field, spending a lot of time with customers and with our salespeople. And about a year and a half later, moved into product management, helped scale the company to about 200 clouds around the world, selling through IBM, HP, as well as directly through our own sales force. And in 2010, the company got acquired by NetApp. After that, and by the way, these are all Canadian companies. And after that acquisition, I moved my family down to the Bay Area, went to the Stanford Graduate School of Business.”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Sure, happy to. It's my absolute pleasure to be here. Thank you, Harry. So I'm currently a partner at Exceed Capital, a seed stage enterprise focused venture firm that invests in enterprise software companies that are built on unique technologies. We're currently managing a $60 million fund. It's a second fund, and our investment approach is to build a focused portfolio, spend quality time with each company to help them succeed and get to Series A and Series B. In terms of my personal background, I was trained as an electrical and computer engineer in Vancouver at the University of British Columbia. And after graduation, I was, I became a software developer at a commercial printing technology company called Creole, which digitized the whole commercial printing industry and went public in the late 90s. After that, I joined a”

    2015-06-18 · The Twenty Minute VC · 20 VC 046: How VCs Evaluate Investment Opportunities with Alan Chiu, Partner @ XSeed Capital · IDENTIFIED FROM THE TRANSCRIPT · source