I hold office-hours meetups, akin to the Clinics that A_Space holds, wherein they bring in subject matter experts, and they co-work side-by-side with budding entrepreneurs. Sometimes we sign NDAs before we get into it, often not though: but almost always a no holds barred discussion about what I need as a venture office and what the founder needs. I either work in the foyers at the office—or cafeterias—, or I actually work at co-working spaces (just as long as the internet runs per workstation at > 30mbps.
One founder in particular, came in, and wanted to chat about her food and beverages business. Particularly, she wanted to get into the catering business. Five minutes in, I found myself reiterating points on thresholds and criteria that my own personal venture office, Katalyst.ph, which I’ve committed another block of $1M USD to investing in the startup ecosystem here in the Philippines—in the way of grants mostly, and startup seed capital.
So I took notes, and here I am blogging about it. And based on this, my office will come up with a cleverly formatted form that they’ll hand to startups to complete as part of their following a track to evaluation—something my institutional partners (private banks, investment banks) are piggybacking on.
The handout stipulates these bullets:
Katalyst.ph—is not a fund, and I do not invest other people’s money; it’s my own personal funds—my own personal venture office [no LPs, no other investors other than myself]—, but that said, my family trust and family office is governed as such that I have to account for all of my projects in the States (one of the reasons why I have documentarian follow me around wherever I go; I file weekly progress reports on everything from traditional investments that fly under the radar such as poultry farms and piggeries, to private lending and financing offices—to, even, inherited businesses such as manpower businesses and old school manufacturing: steel, textiles, etc.); I’ve gotta report on all that on a weekly basis. [Word and Excel macros go a long way, and have replaced many’a staff at the office.]
Why work with folks like that of MAIN—the Manila Angel Investors Network? First off, in the Philippines, in such tight quarters, it’s the fastest and quickest way to quick-study on a space or area unfamiliar to my office. Had a question about a supposed innovation on catalytic convertors, then another contraption that had something to do with brake fluid, that was thrown my way from the DTI offices the other day, and I had no idea what I was looking at: looked like flux capacitor. So I dumped onto the MAIN Network, and lo and behold, there was a major player in the auto business on the Network that had ready info and leads, even consultants that I could hit up to run analysis on the product—and even feasibility commercial studies. My humble office of all but me, me, a few staff members, and me, just couldn’t handle processing the breath required to process in order to pick the best of the best of the Philippines to invest in, left to our own devices. MAIN and especially its member investors (largely, institutional and corporate members such as banks and funds) have been a godsend that way.
- So, due to the demands of the offices of my partners—not my own demand—I tend to look at businesses that have a clear path to $100M USD in sales (gross revenue, net- is better, net- after taxes even better). I can invest and participate in funding anywhere along that path to $100M ($100M being the minimum and threshold) [from idea and MVP stage, to growth and “Series A-, B-…”] just as long as the path is clear, feasible, justified, and led by the right people.
- Industry agnostic: You’d be surprised by the things that can make $100M USD/year in this country. It isn’t all just condos and government kickbacks. It’s food; for all intents and purposes, shitty food (will be stepping on toes there, but I give a fuck). Processed food’s a big one. You know, the kind that come in little balloon squares of half-air, and even less chips (or whatever)—the kinda stuff that I munch on 24x7 at my desk. Just check the PSE’s press releases; they’re all PRs from XYZ Holdings, and ABC Capital, that in turn own chips and fast food businesses. Then, just move up and down that supply chains; industrial agriculture (invested in poultry; invested in manure; invested in financing these operations through debt-financing arrangements, discounting agreements, etc.). The most asinine of products, make the most money; these have been my fallbacks, since the big bosses back home seem to think that Makati’s representative of the Philippines, and that I can quite easily return on any amount of funds I personally allocate for myself—needless to say, I’ve been needing a lot of fallback options (why I’ve allocated a small BPO toward crawling the PSE; amongst other activities).
So after going over this with the co-founder, she admitted that her business may not be of the size that we typically look at, to which I said: you don’t even have a deck ready for us yet. Please get a deck ready; get your idea down on paper, and perhaps we can see: you may be sitting on a $500M USD business; you just may not realize it yet.
I then [hitting the whiteboard] went on to mention Hampton Creek’s competitors (e.g. Clara Foods) and of course pointed to Hampton Creek as a cautionary tale (à la Theranos)—not necessarily their model or space, but there are startups such as Munchery that are in a similar space, I noted.
So the founder asked if she needed to plan for beyond the Philippines to be able to show that there’s a clear path to $100M/sales/year, to which I said, not at all: Recall, I said, my point about many of the most vibrant publicly traded companies on the PSE: food businesses. Cities aren’t going away. The migration to cities isn’t reversing any time soon. The demand for services such as yours is there and will only continue to grow.
No, you don’t need to go beyond the Philippines just yet. Have a clear path to basecamp-1, basecamp-2, which’ll invariably be rooted here, in the Philippines. Once you get to basecamp-50 or so, you’ll start to naturally develop ideas about how to get to basecamps outside of the Philippines. Have basecamps outside of the Philippines in mind, but don’t focus your energy on getting there just yet; focus on more immediate concerns: focus on customers and markets that are here, right up in your face, today.
- Businesses in the food delivery, food on-demand space (international)
- Popular publicly listed food businesses in the Philippines
- Read the PSE Edge for press releases by local publicly listed companies.
- For a list of co-working spaces in Manila that offer high speed internet, see this list.