INTERVIEW 🎙️ Sylvester Wee, Sentinel Global:  Why Focus on Scalable Technologies in Start-Ups?
Channel: Beryl Elites
Date: 2023-12-20

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Interview 🎙️ featuring:
Sylvester Wee, Partner, Sentinel Global
Hua Jing, The Beryl Consulting Group

The VC industry has undergone a lot of change. How will VC get through these challenging times, what are opportunities ahead?  
❖ We are in unprecedented times, rising interest rates, rising inflation, rising geopolitical tensions, and over the past decade, we've seen easy capital, it flew into the market and companies and there was a lot of inefficient use of capital. However, the times are already changing, capital is harder to get. According to Pitch Book, we are already seeing capital funding drop by more than 30%, yr-on-yr, and that trend continues. The good part is VCs are doing more due diligence, processes are taking longer. What historically take about 2 weeks is now taking more than 3 months. I think this is a healthy change for the VC industry to create a good foundation for the innovative landscape to be sustainable. At Sentinel, we focus on open computing so our whole thesis is built around that.  Open computing, the essence of it revolves around the interoperability and compatibility across systems and creating the open standards for companies to be built on. So that will make it easier for companies to integrate both their hardware and software. In so doing, they would be able to scale more quickly, more effectively and hopefully in a safer fashion.

You're not just an investor but you've also been a startup founder. What perspective does that bring to deal sourcing and due diligence?
❖ I previously founded a consumer tech company and it had its own challenges. Customer acquisition cost was high, revenues was transient because customers were not loyal and the compliance burden was through the roof. Because of that whole experience, that gave me a new perspective. As an investor, I focus a lot on scalable technologies and business models. It's one thing to have a great idea but if just applicable to a very small niche market or not able to scale efficiently with the capital you have, there is a long-term question on the viability of the company. The founder journey and the investor journey has allowed me to better appreciate the risk and rewards of building a company from ground up. It has allowed me to understand how to build scalable technologies and business models. Building a company is not easy, it has a lot of challenges. That's why it's important to understand the motivations, the vision that the founders have for their company, and also their commitment to the success of the company. 

We are seeing a lot of potential on technology such as AI. At Sentinel Global where you focus on transformational Technologies, what is your approach to the shiny new ball of technologies and investment hype cycles?
❖ We are investing in what we deem as transformational technology that will power the next generation of enterprises. But we also aware of the hype cycles. We take a two-prong approach. Firstly, we invest prudently thorough evaluation of each deal that we embark upon. We assess the market opportunity, the stage that the company's development is at, whether it's on the team, product, tech, and we also assess the long-term value that the company brings to the table. For example, one of our recent deals we actually did quite a lot. Our analyst who was previously a deep research analyst at a lending company dived in and tested the product and we also have marketers who have successfully scaled companies globally and gotten regulatory approvals across multiple jurisdictions to assess the license applications of the company that we were diving into. And we also took the initiative to call potential customers to find out what the real pain points are and how much they were willing to pay for the product. At the end of the day, we are investing in teams, not just the technologies. So, we do a lot of reference checks, especially using our networks, finding out who these entrepreneurs are.  
 
Not every startup makes it. In fact, most don't especially in what can be perceived as yet unproven technologies and markets. How do you help your Innovative companies grow and scale?
❖ We invest in companies with clear thesis and real use cases because we want to be able to help them commercialize their product to sell into enterprises. We usually invest with conviction and we take out cycle bets ... We want to actively add value to them using our team’s complimentary backgrounds, expertise, experiences. 



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