中美跨境创新分享#早期投资决策

with Beta Fellow – betafellow.com

Guest: Ellen Ma (Managing Director @ UpHonest Capital)

About the Guest

Ellen joined UpHonest Capital in 2016, as the firm was still deciding on a logo and name. UpHonest Capital currently works with more than 300 portfolio companies, with Ma leading investments in a number of them including Breef, Jubilee, Turing and Turing Video. She also launched Silicon Valley Race (硅兔赛跑),with a reader list of more than 100,000 per week.

The VC Journey

How did you realize that VC is what you want to do for your career?

  • I was very lucky to go to school in LA, where I observed how Silicon Beach became a rising tech hub.
  • During college, I got very involved in the local founders’ community via local organizations, met a lot of interesting founders, and made a lot of friends.
  • I loved hanging out with them, imaging the future, and solving problems with them.
  • After college, I decided to not look for a job, rather to start a micro fund with friends I met in the LA founder community.
  • I was also a very active content person, blogging and publishing articles on platforms like Netease / Tencent.
  • In one community event I organized, I met Wei. A year later Wei wanted to institutionalize his fund efforts and I joined him while completing my master degree.

What was the journey like?

  • in the early days, there were a lot of testings. Lots of discussions and brainstorming sessions. Lots of late-night calls and everything seemed urgent. The experience was just like building a startup. We took the lessons we learned and applied them to building and funding startups later on.
  • UpHonest’s gene is to be as founder-like as possible, be as close to founders as possible. So we are always in the building mode. What happened in the early days is still happening today, we are still innovating and trying to make great ideas happen, just more institutionalized, with a bigger and cross-border team, better processes, and so on.

The Investment Decisions

What investment are you the proudest of?

  • There are many companies that I am very proud of, not because of how much funding they raised, but because of the impact they created in the world.
  • An example will be Turing. A company started by two immigrants, who want to enable Silicon Valley companies to hire talents everywhere from the world and enable talents outside of the U.S. to access top job opportunities in tech.
  • We see the trend back then from our existing portfolio companies, as they increasingly started outsourcing part of their company outside of the U.S. Since COVID, the company really took off and gained amazing traction, and became a unicorn this year.

What key factors are you looking for in a business?

  • Founder-first approach. We look at
    • How does the founder interact with themselves? Do they have grit? Can they learn fast?
    • How does the founder interact with the team? What kind of managers they are and what management style do they have?
    • How does the founder interact with the rest of the world? How do they handle competitions? How do they treat their clients?
  • We invest ahead of trends instead of trying to chase trends because that would be already too late for an early-stage fund.
  • We also look at the founder-market-fit. Are they passionate about a certain market? Are they knowledgeable? Do they have the right skills? Why them and not others?

How do you decide if a student founder is good?

  • We treat founders the same, there’s not really a discount with student founders.
  • But with certain talents, we have an incubator program to build together with founders, where we will brainstorm and grow together alongside them. We might also be the first investor in these companies.

What is the most important thing when doing due diligence?

  • Before COVID, we were able to meet founders offline, and for some founders, we might’ve known them over the years. We really developed a sense of how they are as people before we invest.
  • After COVID, things are a little different. It’s helpful to get perspectives from people around them. Hanging out and getting to know the founder is still very important.
  • For early-stage, it’s hard to rely on data. The amount of data is very limited

The Next

Where is the blue-ocean trend for founders?

  • This is a billion-dollar question and really hard to answer. It’s also a thesis question.
  • Instead of trying to answer this question, the founders can ask more questions. What are some megatrends that are inevitable? Some examples can be climate change and digitalization.
  • Another question, from a consumer perspective, is what do people really want? What is the end goal of humanity? My answer would be happiness. Then I can think about what makes people happy. It can be solutions that improve longevity, productivity or enable unique experiences. Your answers could be different.

If someone wants to be a successful VC like you, what should they do?

  • First of all, think twice about if VC is really for you. What kind of a person do you want to become? Maybe you shouldn’t be like anyone but be the best version of yourself.
  • If you still decide to be a VC, try to look inward, and figure out what you like and hate. It will help shape who you are as a VC. Then you will be able to figure out the next action to take by looking at where you want to be v.s. where you are now.
  • Then just do it!

Note Taker: Lolaly (Shuyuan) Luo

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