Quyết định của VC: Kỳ vọng tăng trưởng, thành kiến & Thỏa thuận nhanh – E551
"You're going to make a decision. You're going to meet about a thousand—maybe five thousand—companies in a year, then decide to invest in ten of them. Think about it. You're basically meeting everybody for half an hour or one hour, and you have to make decisions fast. The reason VCs make so many decisions is that the best founders move very quickly—they’re aggressive in how they approach business. And you need to be in a rush. You need to work fast to get the deal. I'll give you an example—today, I had a call at 8 a.m., and by 7 p.m., we made a decision. We finalized it by 8 p.m.—12 hours. We sent a WhatsApp in that time, but it wasn’t enough. Now we have to fight for allocation. And I remember waiting, thinking, ‘Shit, this is too slow.’ Even I felt it was too slow. But the other way to look at it is that we could have been overloaded or just overconfident, right?"
"There was this team that met through Antler, and it turned out that their co-founder was not who he claimed to be—he had a criminal record. Imagine that—the two co-founders met this guy, didn’t know his background, and now, even though their company is doing pretty well, they had no idea that one of them was a criminal. As a VC, if I knew you had a criminal record, I’d be like, ‘No way, man, I’m not putting money into this company.’ But I’m not just looking at the negatives—I’m also evaluating the strengths. Do you understand the market? Do you care about what you’re building? Are you going to work hard and learn quickly? Founder quality is absolutely key."
"Doing a startup is an Olympic sport. It’s not a university sport, not an academic bell curve course, and definitely not a pass-fail system. One person gets a gold medal, one gets silver, one gets bronze—and the rest of the world walks away with nothing in that event. So, do you have the right market fit? Can you fundraise? Do you have charisma, presentation skills, and that X factor—the thing that makes people look at you and think, ‘There’s something special about this person’? And of course, we talk about a 10x product. Is what you’re building 10x better than the competition or the status quo?"
Jeremy Au talked about how venture capitalists assess startups based on their ability to scale rapidly, led by strong founders with a clear strategy and market fit. However, their decisions are shaped by heuristics, biases, and time constraints. The best founders move fast, refine their pitches, and demonstrate exponential growth potential. He also discussed how VCs evaluate startups, the common pitfalls in fundraising, and why speed and conviction matter.
1. VCs bet on exponential growth – Investors look for startups that can double or triple revenue yearly. “If you start at $10K, triple it, then double—you’re at $100M in nine years.”
2. Founders are the first filter – VCs assess character, skill, and drive. A great founder learns fast and executes relentlessly.
3. Strategy must be clear – Investors back ideas that are logical and practical. A strong strategy directly addresses market demands.
4. 10x thinking defines winners – Great startups offer a product that is 10x better, target a massive market, and have strong unit economics.
5. Speed wins in venture capital – The best deals close fast, often within hours.
(01:04) Jeremy Au: The VC point of view was that VCs are looking for founders that will build a unicorn over the next 10 years.
(01:10) And we've seen this before about how Jeff Bezos looked very cute. He giggled when you asked him what he was building, and now he looks like a very ripped dude.
(01:18) Can you build that unicorn business over time? The key thing is that in a more short term basis is that when we talk about pitching where we're at a context of a pitch deck, when someone's evaluating a pitch, they're going to be thinking to themselves,
(01:29) "Will you become a unicorn in 10 years? No matter how cute you look." Another way of looking at it is, "Will your enterprise value double this year, and double again the next year?"
(01:39) So if you can grow, because if you think about it, if a company grows, let's say you only make, $10,000 a year from your tuition agency, I'm just giving an example, then if you triple to 300,000, you triple again to a million, you start doubling a million. Then 2 million, then 4 million, a hundred million. Nine years. You've got one year to (02:00) spare. So what I'm trying to say here is that a good startup is able kind of figure out that crack right? You see that key product. They understand that $1 will give them $15, then they accelerate, they bring money and marshal the resources to accelerate that business a lot faster. If I meet you immediately and you're raising money from me, the question I'll ask myself is, "Can you double, at least double this year, and can you double again next year?" Because I want you to grow 4X over this time period. And so when you build that pitch deck, when I'm a VC, when I'm meeting you, you're pitching me, I'm going to be thinking, I'll look at you, I'll say, "Who's the founder? Are you good? Are you legit? Are you a scammer?" One of my podcast episodes in the past, we talked about it, there was this team that met through Antler, and then it turns out their cofounder was not his real identity, so previously, has a criminal record. So you imagine, the two co-founders met this guy and they didn't know. They're doing pretty well as a company right now, but they didn't know that one of them was a criminal. So imagine it's a VC, right? If I knew you're a criminal, I would be like, "No way, man. I'm not gonna put money into the company." But obviously, I'm looking not just as a negatives, but also looking at the (03:00) strengths, right? Do you understand the market? Do you care about this thing? Are you going to work very hard? Are you going to learn very quickly? So the founder quality is really key.
(03:07) The second thing, of course, is they'll be looking at the strategy, right? So you could be a really good person, but just, I just want to understand, does your strategy make sense, right? Does the overall intuition of this business make sense? So I mentioned before, somebody wants to make NFTs for clocks at a height of the NFT wave, right? As he was collecting money and checks and say, "I'm fundraising," and I'm like, "Wait, like, why do you need an NFT blockchain for concrete?" You get what I mean? It's just so confusing over and over again. So intuitively, again, I said, I might be wrong. Maybe he's on his way to become a billionaire right now. Maybe I'm a person who doesn't believe. But for me, it was just like, it just didn't make sense. So I said no to this person. And then obviously last thing of course is the pitch. So these are the more like your detail orientation around the exact deck, the numbers, the model, the financial model, the bullet points, et cetera.
(03:54) So I think you really want to be thinking about that is as a VC, I'm like thinking about these three aspects, the (04:00) founder, the overall strategy, and the pitch. And so what we want to talk about is that, we thought about 10x before. It's not just about doing, I'm not only measuring these three dimensions, but I'm really marking it against three major criteria. And again, doing a startup is an Olympic sport. It is not a university sport. It is not an academic bell curve course. It's not a pass-fail course. It's one person will get a gold medal, one person will get a silver medal, one person will get a bronze, and the whole world will not get a medal for swimming in that one event.
(04:33) So is that fit with the market? Do you have that ability to fundraise, charisma, presentation skills? Do you have the X factor that you can look at them and say I think there's something special about this person compared to everybody else, right? We talked about 10x product. The idea that they're providing is this product 10x better than the competitors or the status quo, right? Is it something that solves people's number one problem? Is it a very good ability? Do you understand the articulation of it? (05:00) Do they understand the unfair advantage? Now, what's important for me to say is that, sometimes founders can be bad at explaining the product, right?
(05:07) So there's a lot of people who create a really good product, but they're really bad at explaining it, right? So as a VC, my job, of course, is to evaluate and say, even if the pitch deck is bad, but if I believe the product is great, I'm going to put money into the company. But as a founder, in order for you to get this, you want to demonstrate why your product is a 10x.
(05:24) And lastly, of course it's 10x economics. So from my perspective is, is this market, they're going after a very large market, right? Is there a market tailwinds? Would they be able to get money and extract cash from it? So for example, my friend and I, we talked about it, we were looking at Perplexity. It's a Google search competitor. And my friend and I were saying, should we buy secondary, should we buy some stock? There's now available at this valuation. And we said, definitely the market they're going after is huge because Google is a giant, multi-billion dollar market. In fact, there's a huge search market. But then we said, we don't believe they can extract value because in order to access Perplexity, you need to open up your (06:00) Chrome browser or your Safari browser and then type in perplexity.ai to search for your answer. So we think that Google is just going to copy Perplexity and put it into their Chrome browser in the search bar, which they're already starting to do in their Google searches. And Safari is just going to do the same thing, and then everybody's all just going to do this. Microsoft Bing is already doing it themselves as well, right? But who knows? Perplexity founder is actually very strong, actually, and he's actually doing a very good job communicating, but we don't know. So we'll find out.
(06:28) So when a VC is meeting you as a startup, when I will be looking at you, I often look at you and say, is this person an exceptional founder?
(06:36) And this is a decision tree from this VC who invested in me called Rob Go on NextView Ventures. This logic tree model is not prescriptive, right? I'm not saying you must use this model. Neither am I saying that it applies to all VCs, but I'm just giving you an example of how one VC would probably think about it.
(06:55) And the way they would think about it is, let's talk about a golden path, right? I meet you, and I say, (07:00) "wow, this founder is incredible." Well-spoken, clear, passionate, knows his shit. I've heard of him before, and he was a rock star at his marketing class. And he went on to be a rock star at DBS or whatever it is. Then, they told me that he's going after a market that I think is attractive. So this person is going to create the next infinite energy battery, something like that, right? Wow, this is a really interesting marker for them to go after. And then this person is really good because turns out, his father is a battery family. And so, he actually has lots of legacy knowledge about batteries, because his family does batteries, right? And therefore I would yes, yes, yes. Then I will keep meeting and then see whether I'll pursue it until eventually I go yes.
(07:43) But of course, the other version of that is I meet this founder and you're like, "Eh, meh. Nothing special, floppy, low integrity person." Then you're like, oh, are they going after an interesting market? No. They want to make furniture, let's just say. And you don't think that furniture is an attractive market, right? They (08:00) say, they're going to make furniture, and you're like, ah, it's not an attractive market. Therefore, no, you straight away just write an email, say, "thank you very much for your time, I appreciate it. feel free to reach out to me in a year, and let's reconnect." That's the email that you'll get from that kind of no. And of course, there's all kinds of versions in between, goes left and right. Can you do a second opinion? Can you evaluate, et cetera, et cetera. Just two days ago, you know, a VC messaged me and say, hey, Jeremy, heard that you're at this company. You want to go out for coffee? So this person is trying to, process me, right? So I said, okay, here's my WhatsApp number. This person just pinged me. I haven't responded yet, but once I go for coffee, this person has already looked at my LinkedIn, et cetera. They're starting to process this decision tree about a company and the right fit.
(08:39) So they're starting to process and make a decision about me. From a VC perspective, a lot of the VCs will use a lot of heuristics to make fast decisions to make better decisions. However, these can become biases when they're not supported by data.
(08:53) And I think I use this because some people are concerned about representation and so forth. But let me just try to explain to you why it's happening first. First of (09:00) all, VCs are all human. No AI VC yet, but there's a lot of AI bots that are starting to help VCs. And every VC has a certain amount of professional experience, right? For example, you can imagine a lot of healthcare VCs, they have experiences as a PhD or done healthcare before, so they have professional experience in VCs. When you see a healthcare company, there are obviously more to know about what to say or what not to say, or what to look out for, what not to look out for, versus somebody who doesn't have any experience.
(09:26) You're recently, was a swimmer. All right, like Joseph Schooling, National Swimmer. He joined Vertex Ventures, right? So he's now a VC. So maybe if one of you is going to be a founder, you may meet him at one of your startup conferences soon. But he's now a VC at Vertex Ventures, but he doesn't have healthcare experience, right? For him, when he meets you, let's say you have a healthcare idea and you're pitching it to him, he's gonna take more time to process that, right? Because he doesn't understand healthcare the same way because he doesn't have that professional experience in healthcare. Now, I'm pretty sure that if you told him that my startup was about Olympics, swimming (10:00) suits, or Olympics technology, or sports technology, I'm sure he's gonna be much faster compared to me, for example, right? Because I hardly play organized sports at all. So he's gonna be faster than me in some dimensions as well. So professional experience is an asset, so that's key.
(10:15) But, of course, the bad news is that you can create a similarity or a local bias, right? So similarity and local bias basically means okay, when I understand healthcare, I look at everything through a healthcare prism, right? And so if you're not a healthcare deal, I don't care about it, right? Or maybe because I look at too many healthcare deals, when a healthcare idea comes in, I'm already too cynical from too many years doing it. But then somebody who's fresh and has been recently been a national athlete, hears about this healthcare idea, fresh pair of eyes, does the research, does the legwork, and then says, you know what? Even though Jeremy is cynical about healthcare, about this aspect, I actually believe there's a new approach to do it. I'm going to go for it because I don't have a bias on it. There's something to be aware about. There also can be a local bias. Obviously, I'm in Singapore. I meet you all in (11:00) Singapore, I meet you multiple times. So I have more information about you and you have more information about me. So we have a similarity, a local bias. But if I was talking to somebody in, for example, in Thailand, now I don't know who this person is. Now, just because I don't know who the person is doesn't mean that I should not be funding this person. If I don't know this person, I should be doing the work to find out about this person to the point where I can make an adequate decision. So what I'm trying to say here is, sometimes a lot of VCs will be like, I want to invest in this company because I feel comfortable about information, I think it's a great deal, which is good. But when they say no, a lot of people will say no, either because they know the company very well, and they judge fairly that it is a bad deal, or sometimes the VC is basically saying, I don't have enough information and because there's too much information, I don't have enough time to process, I'm gonna say no. So there's a form of bias that happens because locality creates that information tightness that gives confidence for people to make decisions.
(11:59) Secondly, of course, (12:00) is that VCs can have prior wins. So for example, if I have money in Uber, then after, I don't know if you remember, but then everybody was creating an Uber for something, right? Uber for massage, Uber for gifts, Uber for this, Uber for that. Because there is a winner. There's an Uber, right? So when eFishery came out recently for Indonesia for Agritech, everybody was getting, I want to be the eFishery for rice. I want to be the eFishery for this and that. So everybody was saying, I am the eFishery for X. So if you were somebody who made money on that, then maybe it's correct because you understand the model better. You understand how a winner works, you help them be a winner. Or, it could be a form of anchoring, right? So maybe the anchor is wrong. So you were like, you know what, Grab is the way to do things, but now nobody wants to be the Grab or Gojek of anything, right?
(12:44) Because a lot of people feel like Grab is a bad model to do things in Southeast Asia. Some people say that, right? The anchor could be wrong. You thought it was a good anchor seven or eight years ago, but now, times are updated, people are like, no, I don't want to be a Grab for this. I want to be the OpenAI of (13:00) fashion. I want to look for the OpenAI of tuition. I want to look for the OpenAI of therapy, right? People, there's always that continuous loop de loop between the anchoring and the prior wins. And so if you enter a fresh pair of eyes, sometimes you can spot something that is faster than everybody else, right?
(13:17) And lastly of course, is that VCs are in a rush. You are meeting like 40 startups. You're gonna make a decision. You're gonna meet about a thousand, 5,000 companies in a year. Then you're going to make a decision to invest in 10 of them. Think about it. You're like basically meeting everybody for half an hour, one hour, you can make decisions. But the reason why they make a lot of decisions because the best founders move very fast. They're very aggressive about how they approach the business. And you need to be in a rush. You need to work very quickly to get the deal. I give you an example today.
(13:48) I waited, I had a call at 8 am. We made a decision by 7 pm. So we finished the decision by 8 pm. So 12 hours. We send a WhatsApp at 12 hours on the road. Not enough space. So now we have to fight for (14:00) allocation around, right? And I remember I was like waiting for the thing to happen.
(14:03) I was thinking to myself like, "shit, this is too slow." Even I felt it was too slow. The other way to think about it is that we could have been overloaded or we're overconfident, right? So yeah, maybe everybody else is, I was rushing to do it, to compete with everybody else, but maybe I'm overloaded, I'm making a bad decision because I have too many people or to take after, or I'm overconfident.
(14:20) So yeah, I want to get a deal, but maybe I'm wrong. 12 hours is not enough time to make the decision. And so there's a famous example where Bessemer has examples, so there are two companies to look for. I can't remember exactly the name. I think one of them was Shopify, but basically they had two companies. They were double booked. And so they could only meet one startup before the flight. So the partner took a coin, flipped the coin, he took the number, he went to see that meeting, he canceled the other meeting, and the other meeting turned out to be the one that became a billion dollar company.
(14:47) So it's quite interesting. So what I'm trying to say here is you have to be thoughtful about all of these mistakes that can happen all the time.