Fundnel, Valuation & Liquidity of Private Markets in Southeast Asia with Kelvin Lee
Fresh out of the studio, Kelvin Lee, CEO and co-founder of Fundnel, joined us in a conversation to discuss how the company is helping to bring liquidity into the private markets and transforming the funding landscape across Southeast Asia. Kelvin shared his insights and the mental models behind valuations and liquidity events for the startups in the private markets. Last but not least, he offered his perspectives on the recent economic downturn with the funding drying up for both startup and crypto markets and what it would mean in the near term.
"The core purpose of exchanges must be to create jobs. If it's not creating jobs, if it is really just trading derivatives, where is the value creation? If it's not encouraging the next generation of investors, allowing them to put money behind companies that they relate to and are supporting because these companies are solving problems that will impact us in the next 10 & 20 years." - Kelvin Lee
Introduction
- Kelvin Lee, Co-founder and CEO, Fundnel (Linkedin)
- How did you start your career?
- What are the interesting career lessons you like to share with my audience?
Fundnel & Valuation & Liquidity of Private Markets in Southeast Asia
- Before we start our conversation on the story of Fundnel, it will be great to baseline our conversation to the understanding of private and public markets. To start, can you define the private and public markets and explain why there exists the great divergence between these two markets, given there is friction for any investor out there to press a button and buy a stock, say Tesla or a private company, say Biofourmis or Shopback in Southeast Asia?
- What is the inspiration behind Fundnel and what are the key problems which your business platform seeks to address?
- What are the early days like when you first started the business 7 years ago?
- How do you convince people that there is a private market?
- Who are the customers of Fundnel and how do they access Fundnel? Do they need to be accredited before investing into private companies there?
- Can you talk about the investors who have backed Fundnel so far and how they have helped you in the process?
- Can you share some highlights of Fundnel and your recent launch of a new fund with BRI Ventures to jumpstart Indonesian startup investment?
- How does Fundnel source the deals for the investors to buy in?
- One function for Fundnel is in the private markets where it unlocks liquidity for startup founders and employees, how does the platform help to unlock that liquidity?
- While this type of events are becoming common in the US through Carta or Second Market, what’s the frequency like in Southeast Asia or Asia Pacific?
- If I am a founder of a private company, and want to initiate a liquidity unlock event, how should I approach Fundnel and what are the things I need to think about before coming to you, for example, price discovery?
- For private markets, what are the mental models for valuation as it feels like an art in startups below series B and a science after series B to mezzanine or pre-IPO stage?
- What are the trends for private markets in Southeast Asia? Are startup founders and employees understanding the new options opening to them, from different exit options, for example, SPACs or direct listing?
- With the recent rate hikes to curb rising inflation, the market has triggered an economic downturn. Most VCs are now deliberately turning off their taps and letting the startups either rise or go under water, given that they have the upper hand on valuation now. What will be your advice to entrepreneurs and capital allocators out there?
- What does great look like for Fundnel in the next decade?
Closing
- Any recommendations that have inspired you recently?
- Kelvin's recommendations: "Backable" by Carlye Adler & Suneel Gupta & The Billion Dollar Code (Netflix show)
- How can my audience find you?