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Ly Khanh Hau is Partner at Ascend Vietnam Venture (AVV), former Investment Manager at 500 Startup Vietnam, and Director at Shine – a business incubator for female founders. In this Vietnam Innovators episode, Hau shares her experience and viewpoints on what challenges businesswomen face.
During five years in the investment industry, Hau has experienced different aspects of the fund's operations, from portfolio management, fundraising, and fund operations to communication and branding.
AVV, formerly known as 500 Startup Vietnam, is a seed-stage venture capital fund that focuses on globally recognized Vietnamese tech startups. AVV is the investor of Elsa, TrustingSocial, and Axie Infinity. Shine is a program under AVV that aims to bridge the gender gap in the investment field. Both AVV and Shine have the same vision of empowering Vietnamese startups on their voyage sailing to the world.
Before 500 Startup Vietnam, Hau had worked for some international Non-Profit Organizations in Vietnam. She switched to the venture capital world when the startup ecosystem was still young and needed a lot of support from the funds. For Hau, whether at an NPO or a VC fund, there are always positive impacts she could contribute to the community.
The “cradle” of internationally successful startups
The macro factors of Vietnam’s economy, such as the high-growth rate, are quite familiar to international investors. However, there are three advantages that they often overlook when it comes to the success of Vietnamese startups in the global market:
- The consumption behavior of Vietnamese people is similar to other emerging markets in the world.
- Many Vietnamese investors have had the experience of living and working abroad.
- Human resources in Vietnam are abundant. It is estimated that there are about 100,000 technological engineer graduates every year. They have highly qualified skills compared to the standard level in Southeast Asia.
AVV believes these three advantages are enough for Vietnam to become the "cradle" of internationally successful startups.
Women in the big picture of venture capital
More and more domestic and international investors, from seed funding to series B, are currently interested in Vietnam. In addition to profits, to see how much startups could grow and flourish is a valuable reward for the funds.
Early-stage investing is highly risky because, at that stage, there is barely any data to look into or evaluate a startup’s products. Hau said that more than 90% of startups funded at the seed stage would fail. However, risk and profit always go hand in hand, and Hau accepts that venture.
For Hau, a successful startup is one that quickly recognizes and corrects its deficiencies. There are two main reasons for the disintegration of a startup:
- Lack of management ability and disconnection with people in the business ecosystem, such as their team, customers, and investors
- Lack of focus, especially in early-stage startups. They don't have the 80/20 mindset, which means they could not find the 20% of the work that accounts for 80% of the results.
According to Crunchbase statistics, in 2019, there is only 2.8% of investment funds from venture capital worldwide poured into female-led companies. And the number even decreased to 2.3% in 2020.
To explain such an imbalance in investment, Hau gave two reasons. First, women worldwide do not have access to technological change as quickly as men. Most of them started their businesses in the tourism and catering industry, which was heavily affected by the Covid pandemic. Another reason is that the investment fund is imbalanced when 73% of venture capitals in Southeast Asia have no female partners. Meanwhile, women investors tend to invest in women-led businesses.
So what can be done to bring gender balance to the investment sector?
Change comes from individuals
Deal Street Asia statistics show that 93% of funds in Southeast Asia invest in startups with male leaders (excluding the Grab deal). Vietnam is no exception to this trend.
The root cause of the gender imbalance in the investment field is not enough female managers. When a women founder brings a solution to meet a women's needs, the chance of successful fundraising is meager if there are only men on the venture capital side.
Hau said there are two things VC funds need to do to solve the gender imbalance:
- Empower women who are working in venture capital funds
- Have the courage to acknowledge gender biases in investments and personal view
As a pioneer in embracing gender equality in the investment industry, Hau launched Shine – a program for women-led startups. Shine’s mission is to provide a voice for female founders and a platform for investment.
However, the most significant change has to stem from the founders themselves. Hau shares the three most practical actions for female founders in such an imbalanced investment market:
- Dream big!: Investors aim at businesses that can penetrate international markets. Meanwhile, most women founders focused mainly on the locality with unattractive growth potential.
- Female founders easily fall into a state of overthinking and self-doubt. Only when you believe in your abilities does the proper support come to you.
- Look for programs and communities for female founders. Maybe a great idea would appear in an afternoon tea. You’ll never know!
Translated by Bich Tram