This is one of the articles in e27’s Meet the VC series, where we chat with venture capitalists in the startup space to find out more about how they do what they do.
For the past two years, Rui Ma has been 500 Startups’ Greater China Partner. Her job description, to scour for quality early-stage investments in China, Taiwan and Hong Kong, fits her resume and personality to a T. Ma was born in China, grew up in Silicon Valley and has been based in Beijing for the past eight years.
Sociable yet discerning, she has a background in investment banking and is fully bilingual.
Founded in 2010, 500 is a seed fund and global accelerator program based in California and with a presence in more than 50 countries.
CrunchBase estimates that they have 890 investments in 729 companies. 500 Startups has recently extended its reach into Southeast Asia, starting regional fund 500 Durian in May 2013 and 500 Tuk Tuks, a regional fund focussing on Thailand, in April 2015.
After oscillating around Asia for the last few years, Ma will be moving to San Francisco this month. We caught up to chat during her recent trip Hong Kong to coach startups in Swire Properties accelerator program, Blueprint.
Here are the edited excerpts:
What was the career path that brought you to where you are now?
I grew up in the Valley, where you’re just naturally exposed to startups early.
When I was in college, the dot-com boom happened, so I was aware of what venture capital was. During my junior year in college [at University of California, Berkeley] we were allowed to do student-led courses.
I did one on entrepreneurship and I actually remember inviting a few VCs to talk about raising capital.
After graduation, I went into banking. I was at Morgan Stanley, and went into IPO advising. Basically, all my colleagues from that went into tech investing. Many went into later stage, either investing or startups. Quite a few went to Google and Facebook.
After moving into China [in 2007] I did later-stage investing in companies for a while.
How did you start at 500 Startups? What is the nature of your role now?
For seed investing, I got into it purely by chance!
I met the founder [of 500 Startups] on one of his trips to Asia in Beijing. One of my friends wanted me to introduce him to a few angel investors. And, basically, that’s how the conversation started.
I would say what I’m doing right now isn’t really venture capital. It’s institutional seed funding, it’s relatively new. If you look at the stats, it started ramping up in the US maybe six years ago.
What has your experience being a female venture capitalist been like, in a field that is predominantly male?
I don’t think it’s a problem in China. On the gender and age front, mainland China is relatively open-minded. If anything, there’s more to overcome in the US!
You’ve been doing this for a few years, do you ever get burned out?
To be honest, I’m a little burned out right now! (laughs) As an investor, you have to talk to thousands of startups. But it’s been a long learning loop.
I’m only just now beginning to see how some companies get to where they are, looking at the signals and trying to draw the right conclusions.
I find it very enjoyable to talk to startup founders, but sometimes you’re just like — wow, this is the tenth time this year I’ve been pitched the same idea!
But, overall, I would say I generally enjoy talking to people in the ecosystem. Most of my conversations are with founders and some are with other investors.
What advice would you give to a startup that is having a hard time finding funding?
If some investor tells you you’re too early, but is able to give you a clear idea of what they’re looking for, then keep in touch. When a team gains confidence and can execute, investors are more comfortable with investing. That’s to the favour of the team.
Keep in touch with founders who say you’re too early for investment. That’s happened quite a few times, where we will tell a team they are too early.
It’s almost a way to secure the investment, if they keep in touch and come back to us with progress. The goal is to move forward. It’s valuable to see how cohesive [a team is] in their ability to move forward.
Don’t be single-minded about finding funding. I might suggest other metrics or ways of getting there. Once we feel like the business risk is mitigated, I will have seen how their team performs.
It really depends on who you’re talking to. Some founders are very open-ended despite the fact that their idea may be very sh*tty. But some founders have not so great listening skills, and it becomes a very difficult conversation.
Have people ever been offended by your feedback?
Some teams get sort of offended. Some teams [after being rejected] are like, “well, then, you’re not an early-stage investor, you’re a late-stage investor,” and I’m like “Well, I’m asking for a prototype, that’s not exactly being a late-stage investor!”
Most teams are thankful for knowing how to go forward, and if that means securing investment at a later date.
Do your friends ask you to invest in their startups?
All the time!
If that’s your job, and your friends are trying to do their own startup or even thinking about it, I feel like it’s my responsibility to offer them some kind of perspective.
Actually, I would say that some of my favorite investments are people I’ve known. Not necessarily people I know that well, but people I have occasional social interaction with — I mean people I’m friends with on Facebook (laughs) — those investments go well.
I feel comfortable about their motivation and capability, and I have more information. Whereas if it’s a blind pitch, you don’t get the years of background on a person.
We [500 startups] prioritize leads from our existing network, either people we have funded before, or people we worked with, their referrals.
Your inbox must be swamped. How many startups contact you per day, and what’s the best way to reach you?
Really, it’s not that much! I get less than 10 emails a day from startups, but usually at least one. In China, I use WeChat to communicate with everyone, which is an easy way to connect.
Nowadays, I get more of other angel investors or accelerators trying to cooperate for deals or partnerships.
We get a fair amount of interest from corporations trying to form strategic partnerships. That wasn’t the case when I first stated. There’s a lot of inbound accelerator partnerships corporations now.
What is the direction of 500 Startups?
We are growing up as a fund. There are things we are working on operationally to optimize. We are also trying to make the program more global. It’s still a trickle but we have growing profile companies in Asia.
We are in so many emerging ecosystems, so some markets might take time, the learning will take time to settle. We do have a lot of active partnerships here.
Do you invest personally?
Yes, but not in tech startups, because it would seem as a conflict of interest.
Will you miss being based in Greater China?
It just means that my mailing address will be in San Francisco! But I will be travelling all the time.