StaffAny, along with East Ventures, TreeDots, and Stripe, recently held an event for business owners, and we are happy to share that we had a full house this time around. We are proud to have East Ventures alongside us, and they provided valuable insights into venture capital (VC) investments in the food and beverage (F&B) sector.
For aspiring F&Bs looking to get venture funding, here are some tips on what VCs look out for!
But first, here’s some background on East Ventures:
East Ventures, a pioneering and leading sector-agnostic venture capital firm in Indonesia and Southeast Asia, has invested in brick-and-mortar companies, such as SaladStop, a brand focused on healthy salads, and Madly Gems, known for its unique jewellery designs. The speaker, Elisa Suteja, Entrepreneur in Residence at East Ventures, also has experience in entrepreneurship, having established her coffee brand, Fore Coffee.
So, now that you know East Ventures better, we’re here to answer the big question: How does a startup attract funding from VCs? Here are some key takeaways:
Strong Foundations
What do they look out for? Product, and People:
Product: VCs are drawn to brick-and-mortar businesses demonstrating strong product offerings and leadership, such as the product’s uniqueness and the management team’s capability. A key criteria for investment is the business’s potential to add value to society, ensuring a suitable and impactful presence. Hence, businesses need to ensure that the products they are pushing help solve the pain points people face. On top of that, they also look at different KPIs, such as customer retention, as they indicate the business’s ability to maintain a local customer base over time.
People: One main focus for VCs is that they primarily look at the people behind the business and the product offered, as entrepreneurs need the right mindset when running a business.
Successful entrepreneurs often possess common traits. Self-awareness is important when running a business, as you will need to understand your personal strengths and weaknesses. Entrepreneurs also need to balance contradictory qualities like confidence and humility well when expanding their businesses. Other traits, such as adaptability and resilience, were also emphasised.
Key Performance Indicators (KPIs)
Often, owners look at certain KPIs to determine whether their business is successful. Some KPIs that VCs look out for are revenue growth and same-store sales growth.
Customer metrics are one of the most important KPIs to hit. VCs can determine if your business is operating efficiently by looking at customer acquisition and retention rates. Efficiency ratios, such as operational efficiency, can also assess your business’s financial viability, which is important to maintain in the long run. We were also given the timely reminder that KPIs are not for VCs, but in fact for ourselves as operators to run the business better!
Capital and Investment
VCs can invest in businesses and startups, but business owners need to be made aware of their metrics or financial health; if not, it will be difficult for them to be sensitive to the business’s financial health. Therefore, you need to ensure clear and transparent auditing procedures and operations, as it is crucial for fundraising and overall business health. Also, this gives insights to the VC on whether the founder can measure and work on metrics that happen most to the business.
Case Studies
SaladStop and Madly Gems are successful startups funded by East Ventures, and Elisa has gladly shared some of the factors that have led to their success. These startups improve operational and revenue efficiency by tapping into digitalisation to create a seamless online and offline customer experience, therefore having an omnichannel presence.
The most important attribution to their success is their ability to execute. The real outcome of a strategy isn’t because of how detailed the strategy is but the execution of the strategy.
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Regardless of business size, VCs prioritise the quality of your team and market potential. If you think you’ve hit all the criteria and are ready to expand your business, you can attend more events where VCs go to build relationships.
Alternatively, drop us a ping, and we’ll be happy to help 🙂
StaffAny aims to build an organic and genuine community in the F&B space in Southeast Asia. If you’re interested in joining this community, click on this button so that we can keep you posted on future events!
