DMAC 2017 South Korea - Panelists

DMAC 2017 Panel Highlights: Alpha Through Industry Transformation

The DarcMatter Alternatives Conference 2017 South Korea took place September 21-22 at the Conrad Seoul, in the middle of Seoul’s financial district.  DMAC 2017 focused on developing trends within the Alternative Investment industry, making the conference both thought provoking and educational as key speakers used their professional expertise to share insights on the future of the global alternatives market. The conference had a mix of both speaker presentations, panels, networking sessions and one-on-one meetings for select asset management firms.

Throughout the two-day conference, DMAC 2017 hosted a few key panels, one of which was focused on the evolving trends of the GP/LP Relationship and managing deal specific risk globally, titled “Alpha Through Industry Transformation.” The GP Panel was moderated by Sam Hwang, CEO of NP Equity Partners, and featured the following key panelists:

Gregory Borchadt, Managing Partner, Caerus Ventures

Henry Chung, Managing Director, Draper Athena

Stan Fung, Managing Director, Drum Tower Ventures

Lylan Masterman, Principal, Whitestar Capital

This panel session provided unique and interesting perspectives on the shifts of the Venture Capital landscape, sourcing quality dealflow with attractive returns for LPs, and, sharing both success and not-so-successful stories with the attendees. We’ve shared some highlights below, and you can find more information on these firms/funds on www.DarcMatter.com

 

“The VC Landscape has shifted over the past few decades…seems like the balance of power is more towards VCs, where as lately with influx of capital and few good ideas, it seems like there is a balance of power shift more towards the entrepreneurs. How early must investors go to access the best opportunities and how do you source them?”

“I don’t think there is a rule of how early, I think it’s absolutely critical for every single investor to have a sweet spot of their stage…there are a few interesting counter examples…but for the most part, it’s important for us to stay in our lane. When I introduced myself, I said I’m primarily Series A, a little B little C, but that’s our lane and that’s where we see we add the most value at the moment.  For us to try to find an ultimate stage based on some external factors, I don’t believe there is a premium stage, it’s all about your skillset.” – Lylan Masterman, Principal, Whitestar Capital

 

“We are early stage investors and that’s the lane we stay in. We tend to be the first institutional investors into the company after friends and family round. We are pretty hands on investors and tend to take board seats. We only invest in companies where we feel as though we can add strategic value, and make introductions to help the company excel. Whether that means generating revenues or introducing them to a network that is helpful to the founders. We go with that because we achieve the highest return multiples.”  – Gregory Borchadt, Managing Partner, Caerus Ventures

 

“There is an interesting point that most of you made, investing into companies that have a global presence and/or can become a global company. It’s increasingly important to find companies that can become global. How do you assess whether a company can become a global company at an early stage?”

“Rules # 1, 2 and 3 of Venture Capital are People, people and people. When we are meeting with Entrepreneurs prior to investing, we get a sense of how they think, whether they as a management ream have a global perspective and a global vision for the company. We’ve invested in startups where the founders are starting a company in a country other than where they grew up. You don’t want to be the next Fab.com…you don’t want to go global too quickly and too aggressively.” – Lylan Masterman, Principal, Whitestar Capital

 

“I visit and look at research centers and university hubs. It’s a skillset that you only learn from doing it. You have to spend time going through a hundred things to find the diamond in the rough. We have over 30 years of experience, we’ve gone through 3 VC technology industry life cycles. So when we make a prediction about the next wave, we have a bit more confidence and you start to know what to look for.” – Stan Fung, Managing Director, Drum Tower Ventures

 

 “What tech shifts over the next 5-10 years will have the most impact?”

“FinTech, specifically Blockchain and Bitcoin; and the Semi Conductor industries. I believe that blockchain can introduce additional innovations which will significantly reduce current operational business costs. One of our companies is developing a blockchain platform to publish ID’s and approve authentication. It will disrupt and reinvent the finance industry, starting with FinTech businesses.” – Henry Chung, Managing Director, Draper Athena

 

As LPs search for better returns, it’s getting more competitive now to get LP funding.  How do the best funds source the best investments, for the best returns for LPs?

“We tend to be hardware specialists and there are not a ton of VC firms investing at the Seed and series A stage in the US that focus solely on hardware technology companies. With the specialized knowledge that we bring to the table, and the group of our internal team, as well as our advisory board and general network; this allows us to have an operational niche for the companies we invest in.” – Gregory Borchadt, Managing Partner, Caerus Ventures

 

“When it comes to the search for yield…You have to look at the spectrum of return vs. risk, and you’re supposed to have a higher return in Venture Capital by definition. So how you do that, is figure out ways to reduce the risk, because some venture capital risk can be managed. You do that by finding teams that have experience building companies from the ground up and get to know the team like family, and you really get to know them…so they come to you with successes AND problems, and you can solve them together.” – Stan Fung, Managing Director, Drum Tower Ventures

 

Photo (From Left to Right): Moderator: Sam Hwang, CEO of NP Equity Partners, Gregory Borchadt, Managing Partner, Caerus Ventures, Henry Chung, Managing Director, Draper Athena, Stan Fung, Managing Director, Drum Tower Ventures, Lylan Masterman, Principal, Whitestar Capital

 

For More DMAC 2017 Content Highlights, visit this post: Managing Risk & Maximizing Returns

For DMAC 2017 Photo Highlights, visit here: DarcMatter Alternatives Conference 2017: Photo Highlights