500 Startups’ Khailee Ng on his investment preferences

• Likes those with an execution bias and who can think independently
• Looks for problem sets overseas that also exist in South-East Asia

Ng has contributed to 30 of that number over the past eight months while running 500 Startups’ South-East Asian fund, dubbed ‘500 Durians.’ [See link at end of article for a list of these companies]
 
He recently sat down with Digital News Asia (DNA) for 30 minutes with meetings scheduled before, after, and almost simultaneously with our chat.
 
“What is opposite of this is the entrepreneur being too busy planning and thinking … and not doing; or listening to everyone (and not doing). Sometimes I see a lot of that too,” says Ng, also a DNA Digerati50.
 
You can be sure the entrepreneurs in this category are not the ones Ng will invest in. He was sharing some thoughts on the common traits he saw in the 30 or so startups he has invested in, while highlighting three of these traits.
 
“The main commonality that I like personally, is that their speed of execution is exceptional.” he says.
 
A little test he likes to do is to jam (brainstorm) some ideas with founders and suggest one or two things they can do.
 
The ones with an execution bias will come back a week later having tried more than the ideas he suggested. “Yet some founders, after three months, are still talking – which to me shows they have no execution bias,” he says.
 
Being independent in their thinking is the second point he highlights. “They must know what they need to do for the company, how to achieve it, and what they need to do for their customers – even more so than their investors.
 
In fact, Ng says he likes it when founders challenge him and teach him things. That is very important, especially so as it challenges one of the common dogmas of the Silicon Valley-inspired venture capital stereotypes that he wants to break – that the VC (venture capitalist) knows it all.
 
“Many VCs are egoistical and think founders have to listen to them on how to grow their business, and founders themselves buy into this stereotype.
 
“But I think founders need to be smarter than VCs,” he says, highlighting that peer learning is much more relevant, timely and powerful compared with any advice a VC can offer.
 
This is where the 500 Startups approach becomes invaluable, with startups in similar verticals that it has invested in grouped together in what Ng describes as a “mastermind group” for the founders to share ideas, and exchange experiences and advice on how to grow their companies.
 
“I know what my value-add is. The other 99%, I try to add for them through this method and by sending them to Silicon Valley to participate in our accelerator – and also by flying in mentors to Kuala Lumpur to help specific companies in my portfolio of 30 with certain key skills they may need,” he says.
 
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