1. What is a startup?

In Vietnam, people often misunderstand about the term “startup” and tend to generalize it for all business. I often heard people opening a “Tra Chanh Chem Gio”, “Neptune Online Shop”, an online business, a small company, or any business as a startup. To have a deeper understanding about it, Steve Blank (http://steveblank.com/) - a great entrepreneur & investor in Silicon Valley has categorized it as follow:

  • Lifestyle startup: the place where you sell, buy or do business that related to your hobby. E.g.: selling skateboard, roller skate, surfboard, basketball clothes, etc. This type won’t get you far to be a millionaire, not even close!
  • Small business (mostly family-owned): this kind is the most well known and sometimes considered to be representative of entrepreneurship world. They are run by family members & gain enough profit to enjoy their lives (I mean enough to travel to Europe, have a BMW series 7 & house in district 7. Nah, just joking! ). Small business has a very big impact to one’s economy and provide jobs
  • “Aim to be bought” startup: the founders aim to be a serial entrepreneur by selling multiple startups over time. Their target is company valuation of US $5m - US$50m
  • Intrapreneurship: a team that creates a new product in a new market. 3M is very famous for this.
  • Social entrepreneurship: their target is not money & wealth for the founders and shareholders but to make this world a better place.
  • Scalable startup: these startups are innovative, disruptive & change the way we live forever!

Highlighted start-up in Vietnam:

Vinagame: After all the contraband products were banned more than 7 years ago, Vinagame is a new name that changes how young people play MMORPG. By far, they are the most successful, offers lots of consumer web & B2B product. They pass the start-up phase long ago and now place among the earliest startup generation.

Tiki.vn: e-commerce size that most well known for books (especially English book).

Nhaccuatui: the rising star after most online music sites died (nghenhac.info, diendanlequydon.com).

Misfit Wearable: sport-tracking device. A team full of talented people that two founders are MIT grads and early employees are top performers in science and technology field. Moreover, it is backed by John Sculley - president of PepsiCo & CEO of Apple in 1983. … To be updated!

2. Investor tales

To fund for your start-up, there are 3 ways to do:

Bootstrapping or self-funding: this type is the most common practice in Vietnam. Founders fund themselves from their savings, bank loan, passive income, or maybe BMBank (Ba Má Bank)

Angel investors: an affluent individual that provide mostly seed-funding for start-up in exchange for agreeable ownership equity. Angel investors have to take big risk, as they have to trust the start-up team and investing in unproven business model. These individuals tend to form into group and split risk into smaller part. By far, the most prominent angel investor group is SAVVi Angel (http://www.sif-vn.com/home.php) specifically target technology startup in Vietnam.

Venture Capital (VC): this one is most desired by many startup founders. They are investment firm, a sub-category of private equity that invests in early-stage, high risk, high return startups. Most VCs are investing after the angel investors have provided the seed funding. Therefore, the company valuation now is higher. In short, the common practice of funding is: seed funding, series A, series B, series C ( don’t worry about the alphabet, it’s just name !).

Highlighted venture capital in Vietnam:

IDG Ventures: by far IDG Ventures Vietnam is the most prominent VC in Vietnam and the office is placed in the highest floor of Bitexco tower (trust me, the view is overwhelming and inspiring). They are part of the International Data Group (IDG) and have global operation over 5 countries (Vietnam, China, India, Korea & U.S). Their main focus is consumer technology, media or ICT industry in general. Highlighted portfolio including:

  • Media & Entertainment: Moore Corp, YeuAmNhac, Vinagame, Tamtay JSC, FBNC, Cyvee
  • Information & Communication Technology: Apollo Vietnam, VC Corps, Pyramid Consulting.
  • Tech-enabled business: WebTreTho, Vietnamworks, Vinabook, PeaceSoft, Hocmai.vn, DiaOcOnline
  • Consumer Product: Vinapay, Diadiem JSC.

CyberAgent Ventures: is part of CyberAgent Group - in which highlighted investment deals are CleverAds, Nhaccuatui, Colorbox & Tiki.vn

DFJ Vinacapital: is also among the earliest VCs in Vietnam. DFJ is part of Vinacapital and joint-force with Draper Fisher Jurvetson (DFJ) network. DFJ Vinacapital leverage on the extensive resource from Vinacapital with 200 companies invested & DFJ with 600 portfolios funded globally. Highlited investment deals are: Chicilon Media, Timnhanh & Yeah 1! Corporation.

Next part: People & Places you should know in Vietnam startup ecosystem. (view this post at my personal blog at http://www.tommy.ly)

Tommy Ly