The Greater Hub SBM ITB invited three influential people in Indonesia’s startup investment climate on Friday (2/12), namely Melvin Hade, Verdyka Kurniawan from Northstar Group and Arno Tse from Gojek.
Private equity investors or venture capitalists usually offer their cash investments. They will receive a portion of the shares in the company receiving the investment. This type of venture capital investment often has the potential for high returns despite the high risk.
Venture capital focuses on venture startups rather than conventional businesses. Several differences distinguish venture startups from conventional businesses.
From an objective standpoint, startup ventures focus on growth, while conventional businesses focus on daily income, short-term profits. What most distinguishes between startup ventures and conventional businesses is the size of the problem.
Startup ventures tackle many problems in society. Whereas conventional business solves everyday problems.
Melvin Hade explained how VCs get value.
“If Northstar puts in IDR 1 million, 20% of the business capital, then Northstar will have prospects, so they get more value. The founders have to grow the company,” said Melvin.
Northstar is currently investing in four key sectors: consumption, financial services, software and agriculture, and Web 3.0.
“To date, we have worked with start-ups such as GOTO, TIKLVN, JAGO, Atome.ESB, ULA, and Pintu,” said Melvin explaining his company portfolio.
As investors, said Melvin, they do their due diligence before investing. They’re trying to understand the founder, does he know the market, does the founder know what’s going on in the field.
“At Northstar, we maximize the money we invest into the company because that’s also from our limited investors. And we always monitor and analyze the growth of the companies we invest in,” said Melvin.
According to Verdyka Kurniawan, One of the key startup capabilities is agile. Startups need to be agile in building teams and products to survive in the market, especially in the early stages.
There are several things that venture capital looks at from a business, namely founder, market opportunity, business model & product, and traction & progress.
Not all startups partner with VCs for capital. There are also reasons that they just want to get external validation on their business model.
