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MSC
MALAYSIA
FireFlyz | 21
F
or
the first time since its
inception in 2008, MSC
Malaysia InnoTech@
Startups 2014 was opened
up to regional participants,
thus as a result, it attracted
the participation of up to
30 startups from Malaysia, Thailand,
Singapore, Indonesia and Brunei.
A platform that was founded on the
back of MDeC’s vision of makingMalaysia
a global hub and preferred location for
ICT and multimedia innovations, services
and operations, as said by Dr. Karl Ng
Kah Hou, the Director of Innovation
Capital, MDeC – “Over the years, Malay-
sia’s startup ecosystem has developed
significantly with the many high growth
startups with innovative products coming
into the market. However, there is need
to provide high-potential local startups
with an additional boost to grow to the
next level, and connect them with the
right linkages to go regional and global.
MSC Malaysia InnoTech@Startups is
the perfect avenue to build this pool of
high growth entrepreneurs and fast-track
the startups development and growth in
identified technology areas. It also serves
as a platform for investment and funding,
providing startups withmarket access and
regional network.”
When it comes to attracting investors,
Dr. Karl added that generally, investors
and venture capitalists in Malaysia find
that tech startups are too risky to invest
in. Therefore, they emphasise more on the
founding teamrather than just the product.
If they are confident of the capabilities and
potential of the team, they will have the
tendency to invest in the company. Other
than the founders, investors will also look
at other factors such as the prospective
market for the business idea, scalability
of the business model, and returns on
investment before they consider investing.
This very risky environment creates
an over-reliance on the government to
provide funding to plug the gap. However,
as more successes emerge from initiatives
Attracting Investment
What do investorswantwhen they are looking for the right product? Fireflyz catches
some insights at the latestMSCMalaysia InnoTech@Startups investment platform.
It is important
to showcase the
commercial potential
of the product with
scalable impact for
a potential or strong
revenue stream”
companies with excellent
product ideas, however
what differentiates the
best companies from the
rest is their ability to un-
derstand the market and
investors prior to starting
the business.
As said by Dr. Karl,
“Pr i or t o our pro -
grammes, we have heard
a lot of feedback on the
expectations gap that
exists between investors
and startups. In their pitches to investors,
these startups were more focused on the
technology of their product rather than
showing how it can be marketable. Our
joint programmes with accelerators and
incubators have enabled startups to be
trained by mentors assisting them to
come up with a more comprehensive
business plan when they meet venture
capitalists. Such accelerator programmes
also aim to help Malaysian entrepreneurs
and startups to tap on global demand by
building a stronger understanding of the
international market through regional and
global linkages.”
From the investor’s point of view,
when looking for the right product, it is
important to showcase the commercial
potential of the product with scalable
impact for a potential or strong revenue
stream, and to also have a realistic revenue
model and exit option for investors. On
top of funding, a successful business
requires access to mentors for guidance
and exposure to market and attract cus-
tomers. The government, through various
agencies like MDeC, MAVCAP and others
has been running various programmes
to address issues such as capacity and
capability building. Programmes like this
give startups a greater sense of awareness
of what they need to achieve and how to
develop their businesses and provide them
with better access to a network of potential
customers, mentors and funders that are
crucial components for their growth.
by MDeC and partners, more funders will
be interested to invest in these businesses.
Over time, there will be an ability to create
an ecosystem that supports creation and
growth of world class entrepreneurs with
engaging communities such as a cohesive
network of incubators, institute of higher
learning, funders, and entrepreneur com-
munities.
From the investor’s point of view, MSC
Malaysia Innotech is a platform that pro-
vides a unique avenue to evaluate filtered
and qualified deal flows. There, they will
be able to interact and evaluate potential
deals within a structured environment,
plus the platform also encourages knowl-
edge sharing amongst the peer investor’s
group. From a startup’s point of view, as
according to Benson Chang, founder of
TableAPP, “The platform is an important
one as it provides an opportunity to con-
nect with regional startups and investors
which we wouldn’t normally have the
chance to.”
When it comes to the challenges faced
by investors when looking for the right
product, it would be that there are plenty of