How to find out new startup companies in Vietnam to invest in when the double crisis lingers?
From around mid-2022, the second crisis of the world economy has begun to appear when the Fed continuously raised interest rates along with some banks in the US showing signs of bankruptcy.
This crisis spread on a large scale and had a significant impact on the Vietnamese economy not long after that when the State Bank of Vietnam also started to raise interest rates, causing the real estate bubble to burst and create tremendous pressure on other business lines.
Startups in Vietnam also suffer the same fate as this serial crisis (may not end until the end of 2024). So how can venture capitalists find startups with outstanding growth potential right at the heart of the double crisis and how will the investment method change? Let's learn this through the following article with FinFan.
What is the investment fund's investment status in startups during this period?
This line combination column chart below shows us Vietnam startup's total funding based on the number of funding rounds as of the first quarter of 2023.
Due to the information on the chart, we can also easily see how the impact of the double crisis after COVID-19 affects the investment psychology of large funds in startups (not only in Vietnam).
Vietnam's quarterly tech investment
The cautiousness of venture capital funds at this stage is extremely understandable when the dual economic crisis is causing heavy damage to the economy as mentioned above. However, in Vietnam we have an idiom: "After the rain, the sun will shine again", some startups with methodical and long-term development strategies are still clinging to the market and waiting for opportunities.
These potential startups are also in need of capital and support from venture capital funds to overcome this stormy period.
On the other hand, by seeing the potential in the Southeast Asian market (especially Vietnam which is considered to have a very talented, dynamic and creative generation), Vietnamese startups raised a total of $40.6 million in the first quarter of 2023.
5 ways to find out new startup companies to invest in when the double crisis lingers.
Through startup competitions
In Vietnam, we always have annual competitions for startups to connect with investors and join the startup community.
Prominent among those competitions is the startup wheel, which is one of the annual international startup competitions. For 10 years, Startup Wheel has welcomed more than 2,000 startups each year from 43 countries on all 5 continents: 1,500 venture capital funds, individual investors, industry experts and global partners. Startup Wheel – a panorama of startups in Vietnam and the region.
Venture capital funds can participate as strategic partners of the contest to have the opportunity to meet and find and connect to startups with breakthrough ideas and strong potential to grow in the future.
Through startup incubators and accelerators
*Incubators are co-working spaces that allow startups in their infancy to focus on and refine their business. Here, startups get mentorships and guidance to develop their core business (instead of focusing on administrative or minor tasks).
The program can last several years and is a way for startups to grow a network, get sponsors and hopefully finish off with some solid business goals and the right tools to succeed.*
After the incubation period, acceleration will be the next one for startups to grow. In this stage, founders need to find good and suitable accelerators for their startups.
If you are an angel investor or a venture capitalist, at each different investment stage, you should choose to combine with these incubators and accelerators to find yourself startups that match your philosophy.
Here is the list of some popular incubators and accelerators in Vietnam:
- Songhan Incubators
- DNES Finc
- Saigon Hi-Tech Park Incubation Center
- Vietnam Silicon Valley Capital Accelerator
- Vietnam Innovative Startups Accelerator
- Business Startup Support Centre
- NextUP Accelerator
- Zone Startups Accelerator Program
Through online investment platforms for VCs
In the article about online investment platforms for VCs, FinFan discussed the top 5 crowdfunding platforms for VCs to find out their suitable startups to invest in.
The common point of these platforms is that they are all for startups who want to find capital in the form of crowdfunding and then use that money to grow their business before meeting an angel investor or venture capitalist.
Angel investors and venture capitalists can also find out the potential projects of startups that they recognize the ability to strongly scale up in the future.
Through personal networking
As a startup, the founder will try to attend many events, contests as well as practical courses for business administration.
Angel investors or venture capitalists should also attend similar events to expand their relationships with other investors as well as find more suitable startups to invest in.
At this time, you can play the role of sponsor, speaker as well as guest judge for startup-related competitions to get a more intuitive view of the development of startups in Vietnam and the Vietnamese market.
After going through all the ideas in the above events, a lunch with the founder you have chosen is sometimes a reasonable choice to be able to listen to all the wishes for their business and conduct a brief due diligence on their business.
Through online social media
This way will be more suitable for angel investors as some startups often go to social networking sites to raise capital.
The amount of money they raise is sometimes not too large and just enough to keep the business around for a while before going into the next stages of funding.
In short, using the above methods can help you find out the potential candidates for your investment portfolio at venture capital funds or increase your annual idle profit if you are an angel investor.
However, post-conversation due diligence is still an important step that cannot be overlooked. Along with that, during this double crisis period, you must pay close attention to the capital that startups plan to use because this is not a period to burn money.
Some startups with very good models that have had to register for bankruptcy like Propzy and Luxstay are also good examples for venture capitalists to draw valuable experience. for your own money or for your own funds