Investor and General Partner at Ethos Fund
Ethos Fund is a venture capital firm focusing on pre-seed startups in Vietnam and the US.
I would divide my entire career into maybe four phases. The first phase was right after college, just spending time in China. I was doing the peace corps in China. I knew I wanted to do something international. At the time, China was very poor. After that phase of my career, I tried to do some nonprofits and quickly learned that running a nonprofit is no different from running a business.
Second phase of my career was getting into the legal world. I studied law, practiced a little bit and then realized this is not the path that I want. My parents might want it, but not me.
And I quickly moved on to the third phase of my career, which is being an entrepreneur and where I spent the most out of my professional career. I focused hard on education technology and started eight different education companies. All of them pretty successful with the exception of one and sold three of them. Two of them are bigger. One was a minor exit. And then finally the fourth phase of my career is as an investor.
Three reasons. One is because I was transitioning from my thirties to forties. If I'm going to get really good at anything, it's going to take at the very least 10 years. Prior to that, I've been angel investing with my own money and sprinkling money here or there. But I thought, well, why don't I do this more professionally?
Two, I've pitched to hundreds of investors. And every time, I always thought, if one day I'm on that side of the table, I can do it better.
Last but not least, I realize that I don't want to be an entrepreneur. I should just commit hard to being the kind of investor that I wanted on the other side of the table. A true sensei. A sensei means a person who is born, sen means first, and sei means born. What it means is you're the firstborn, someone who's walked the road ahead. So I want to be the investor who's walked the road ahead.
Read the room to find out whether the person you're talking to actually has decision making power. So many VCs haven't figured out how to efficiently source deals. They're tracking all these deals. They're seeing who do we talk and who do we bet? Who did we see? They don't want to miss. They want to leave no stones unturned in some ways. So they'll spread a lot of juniors out there. And people will talk to you. Ultimately, it's going to get to an investment committee. And so you have to wonder when you talk to the investor in front of you, is this person wasting my time too, right? Your time is precious. Do yourself a favor and try to figure out quickly whether they can actually help you take it to the next level, and if they can't, move on.
We are focused on Asia and USA. That's just our strength. That's where our playing fields are. All of our partners have been born and raised in the US and so it just makes sense to leverage the US. And why Asia is because I built my career there and I just know Asia very well. I've been to every single Asian country out there.
Every fund has a cap, how much money that we can deploy. And this is our first fund as a firm. And because of that, we have to focus geographically as well. We have to keep narrowing down. So we focus particularly on Vietnam and USA and help bridging and the leveraging between these two.
What I bring to the table needs to add value to the founder. If I can't add value to the founder, and then this really isn't the marriage because we hate making investments where we're just money and we're just kind of standing back. If I'm going to do that, I'm just going to invest in the stock market, right?
We try to have a meal with every founder we talked to that we're gonna put a check in. It's almost like an EQ test. You know how high someone's EQ is. If they're being rude to me, if they're being so self centered that they don't understand and read the room, they're not going to be very successful with other investors. I look for high EQ.
Another situation is during the coffee chat. Some founders come just ready to unload. They just squeezed 3000 words into one minute. I think that's a bad move, generally. I want to get to know the founder. I want to know their story. Sometimes I even ask how many siblings do you have? Curious because that tells me a lot about who you are and how you grew up.
We want somebody that's actually true and authentic to their word. If there's an a hole who's gonna make a lot of money, we're not gonna back that person.
I'm talking to like, say 30 founders in a week, my inbox would have maybe over 100. LinkedIn has over 300. There's just a lot of founders coming in now. When a VC doesn't respond the first time, put it on your calendar to at least ping them three to four times. You know how technology works. If you get pushed down the queue, you get pushed down the queue.
Second, just because one partner at a firm dismisses you doesn't mean you should stop because there are other partners probably as long as it's structured that way. I would actually encourage founders to take a second bite at the apple with firms.
When the valuation talk happens, there will be some VCs who won't even challenge it and just be like, Oh, come in. As a founder, I remember thinking, that means I'm one of many for them. You're really not caring, right? But the VC that will start, wait, why do you value that yourself like that? Can we look into that a little further? They're beginning to show interest. They want to make sure that this is the right deal for them.
One other is that VCs don't really do the ideation game with me. As an investor, when I see a deal I'm not interested, I try to say no as soon as possible, but one thing you will notice is that I'm not actually starting to ideate with you. I'm not getting creative and I'm not starting to brainstorm with you. I'm not trying to get excited.
There's a founder who is one of the better performing companies in our portfolio. I realized this person has an amazing track record. We got to know them as a person and we realized everything about this person is great. It's kind of person I want to work with. Integrity is there. Everything's there, but they hadn't launched the company properly at that time. It was pre product and pre revenue actually, the idea was complicated. My partner didn't understand it when he first heard it. And it took me two to three meetings to actually understand what she was trying to do. The great thing about this deal was that most VCs probably listened to it and they were just like, I don't get it and moved on. I'm glad that we took the time to understand it. And as soon as we did, we were the first check. We've been doubling down three, four times already with them. They're on track to 20 X now. They're one of the hottest startups now in Vietnam.
Building your network is something you need to do as a founder. And that takes time, right? But it doesn't take that much time. Trust me, building your network probably is faster than building a product. So you do need to commit your time. Focus on good relationships, quality relationships that will continue to introduce you to other relationships. That's very important.
If you're a founder who has very little network, then join an Accelerator. There's plenty of things out there. You might want to look for other programs or other relationships that might be helpful. Find the right angel. They'll have a big network and they'll make the introductions.
If you want that coffee chat, build your network through quality angels and quality programs.
As a human being, you can't be doing multiple things. Externally, if you're a builder, you might not be as good at selling. If you're a seller, you might not be good at building. It's really hard to find someone who can dedicate their time to do both very well. Internally, there are people who are extroverted. There are people who are introverted. There are people who are more organized and very careful. There are people who are more big picture thinkers who are just ready to act before they think all of it's valuable. Teams actually help a startup's chances to see the 360.
Now, is that impossible as a solo founder? No. There are many benefits to a solo founder. There's efficiency, there's less risk of this imploding because of an argument. However, the one thing solo founders need to be aware of is humility. I've seen one too many solo founder, the hubris catches up with them. In the beginning, they're very teachable. They're very aware of their inability to handle everything. So they hire the right way. They constantly grow. They're constantly improving themselves, but that humility seems to disappear around series B.
You need to show them that you are able to be humble, be teachable, hire, or what you're going to do about your blind spots, and constantly demonstrate that you are the kind of person that is self aware and grow, bring on the right people. If you can demonstrate that, nobody's going to question your ability as a solo founder.
Unless you're building a pure tech company that requires hiring engineers from the get go, you might want to hold off on the fundraise. You should be bootstrapping this as much as you can. If I were to start another business today, I would not start by fundraising. I would start by proving the concept, rolling it out myself, and I would bootstrap it as long as I can. Most experienced entrepreneurs would do that. The moment I would actually raise money is because I figured it out and now I know how to turn it on and scale.
But I think a lot of founders come to the VC startup game thinking, I need to raise money to test this. I need to raise money to even begin this. That's a very difficult proposition you're making to the investor. You're asking them to take a bet on you before you even prove the concept to yourself. So it's going to be hard. That's why it's hard for you to fundraise. The people that are really good at fundraising, they've taken the proper risks and they've executed and they've shown that it worked and proved it to themselves.
And because they have, they have so much conviction beyond their pitch. They're like, I've done this and this and I found this to be evident and now I'm here and this is why I need the money and I'm going to do this with it. It becomes a no brainer at that point.
My advice is before you think about raising money, ask yourself, is this really the first step?
You actually work with an existing VC or you start your own. If you work with an existing VC, there are multiple ways in there. You could do the whole private equity consulting route and try to become an investor. The finance route. Just get your foot in the door. Maybe you work with their accelerator program or you work with their PR team. And because you got your foot in the door and they know you and you express your interest as an investor and they train you. Somehow start with the operational role and move your way into investor role. But as founders, I prefer this other route, the route I took. If you've been a founder, you bring something valuable to the table. You can be a sensei.
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