Mercatus Rising: Q&A with Rina Neoh, Angel Investor & Entrepreneur

Rina Neoh of Mercatus Capital

LadyBoss Co-Founder Melissa Lim spoke to Rina Neoh of Mercatus Capital to learn about what it takes for an entrepreneur to succeed.

 Rina Neoh is a Malaysian angel investor and entrepreneur based in Singapore. She is the founding partner of Mercatus Capital, which has evolved into a seed investor, angel advisory, incubator, and business accelerator.

Mercatus operates through a network of offices in Singapore and Asia.

Q: What is the biggest challenge that you face as an investor?

A: For me, the biggest challenge as an angel investor is how to manage my expectations about start-up businesses. I start with the premise that for every overnight success, there are thousand other businesses which may not realise a profit for many years. I don’t expect every investment to make money instantly.

Investing in start-ups is a hit-or-miss proposition. The more you invest in several projects, the higher the likelihood that you’ll end up with a winner. I’m looking at the next game-changer so I’m willing to accept that not all investments will become mega-success. More than a deep pocket, angel investors must have a big heart to help small entrepreneurs get their ideas off the ground.

I start with the premise that for every overnight success, there are thousand other businesses which may not realise a profit for many years.

Q:  Tell us more about Tiny Mos?

A: TinyMOS is a start-up formed by National University of Singapore students which has introduced Tiny1, the first ever smartest and smallest social astronomy camera. It functions like an everyday camera with point-to-the-stars features that offers star charts over a live preview for locating charts and stars.

It can capture barely visible celestial objects with 30 seconds exposure and 2.5K resolution time-lapses. Since its crowdfunding launch in Indiegogo in May 2016, it has received 367% funding. Mercatus and myself have been fortunate to be able invest in this venture as angel investors.
Q: Typically, how long does the investor and entrepreneur take to finalise a deal?
A: Depending on the industry and complexity of the business, the typical deal will take between 3 to 6 weeks after the signing of the term sheet. Normally, I don’t measure an investment in terms of turnaround time. What’s important is whether I feel confident about the project idea and  comfortable with the character and competence of the entrepreneur I’m partnering with. A lot of what I do relies on gut-feel about my potential partner and my passion for the business I’m investing in.

A lot of what I do relies on gut-feel about my potential partner and my passion for the business I’m investing in.

Q: What are some metrics that an investor would use to analyse if a start-up would make a good investment?

A: Investing in start-ups is different from investing in stocks. It requires a lot of intuition and business savvy, plus luck and intestinal fortitude.

There are several questions an angel investor must ask before investing in a start-up:

  • What level of involvement will the project require and how much time and effort are you willing to put in?
  • How long will it take to market the product and what is the estimated burn rate (money needed to spend per month)?
  • How much patience do you have to wait out before the project starts to generate positive cash flow?
  • What is your expected rate of return for all the efforts and funds you will end up investing in the project?
  • Do you have a clear exit strategy as to when and how you will withdraw your investments in the future?

Investing in start-ups is different from investing in stocks. It requires a lot of intuition and business savvy, plus luck and intestinal fortitude.

Q:  Would you recommend start-ups to join an accelerator/incubator?

A: To join an accelerator/incubator or not is a matter of personal choice.

Three factors will most likely determine whether it’s worthwhile or advantageous to do so:

  • Does the entrepreneur believe in the defensibility and marketability of his project?
  • Does he/she have the execution skills necessary to launch the project himself/herself
  • Does he/she have enough of a network and funding skills to generate investor interest?

Q:  Without any capital or savings, should an aspiring entrepreneur take the leap to start their own business?

A: Having a great idea and selling it in the market for profit are two different things. Aspiring entrepreneurs with a great business idea needs experienced people who know how to turn them into reality.

Angel investors, incubators, accelerators and crowd-funders are there to help those without the experience, financial muscle or marketing savvy to turn their ideas into a profit-making venture.

Aspiring entrepreneurs with a great business idea needs experienced people who know how to turn them into reality.

Q: Are there any specific personality traits you feel that an entrepreneur should possess?

A: Many books have been written about this topic and several research studies have identified the traits of highly successful entrepreneurs.

From my own experience and from what I have seen in successful entrepreneurs, the most important qualities to look for are:

  • Deep sense of passion about their idea or product
  • Strong sense of purpose and determination to succeed
  • High tolerance for stress and willingness to roll up their sleeves
  • Never-say-die attitude and a can-do spirit. I personally think this is the most critical factor.
  • Insatiable drive for learning and personal growth

Q:  Is there an ideal number of co-founders? What skills sets are the most important for the pioneers of the company?

A: The future success of a start-up largely depends on the quality and expertise of the co-founders who will drive and deliver the business results.

Typical co-founded start-up will have between 2 to 6 members.

The ideal co-founders team should have a combination of a visionary leader, a marketing whiz kid, a financial wizard, an operations honcho, and a sales expert. At the minimum, three of these skills must be available within the team to increase their chance of success.

The ideal co-founders team should have a combination of a visionary leader, a marketing whiz kid, a financial wizard, an operations honcho, and a sales expert

Q: Do you think there’s a reason why there is typically more male founders than female founders in Singapore? 

A: Personally, I don’t believe that gender has anything to do with entrepreneurial success.

While only 28% of the 40 founders of Singapore’s hottest start-ups in 2016 are women (according to Singapore Business Review report), it does not mean that men are more successful start-up entrepreneurs than women.
My personal advocacy is to encourage more women to take leadership roles in start-ups and entrepreneurship because they have the added advantage of being able to balance business acumen with their intuitive feel for people issues. I don’t believe there’s a “glass ceiling” for women entrepreneurs who want to succeed in the entrepreneurial field.

Q: What are some of the start-ups that Mercatus Capital has invested have been successful? 

A: Through our own angel networks, Mercatus Capital has provided seed capital to promising new small ventures in Singapore, Malaysia, Australia, India, China and Hong Kong. To date, we have seeded and incubated around 75 start-ups with varying degrees of success over the last 11 years. Do check out our website for the success stories and exits.

The size of your success is measured by the size of your dream, the depth of your passion and the strength of your determination.

Q: Can you share some tips to aspiring entrepreneurs?

A: My advice to anyone who wants to succeed as an entrepreneur is as follows:

First, never underestimate your ability to succeed. The size of your success is measured by the size of your dream, the depth of your passion and the strength of your determination.

Second, if you want to succeed as an entrepreneur, you must be ready to pay the price for success by breaking through your own comfort zone. Success comes when your dreams get bigger than your excuses.

Thirdly, success is gender-neutral. Whether you’re a man or a woman makes no difference. At the end of the day, entrepreneurial success comes to anyone who is willing to work 80 hours a week for one’s self to avoid working 40 hours a week for somebody else!

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