Every city is has its next great entrepreneur. They may be flying high, gracing the covers of magazines and keynoting events about saving the world. Or, they might be spending their day toiling away at their corporate job, clocking long hours and pursuing a career that is “fine”.
Tucked-away in a notebook under their bed in the means to break away from fine. It is an idea, or a dream, but right now, it is nothing more.
Maybe they brainstormed a business model to help make life a little bit easier, or they have a product sketch that could solve pollution. Maybe its a silly idea because the world needs a bit more smiles or its something as ridiculous as sharks with lasers.
The notebook stays under their bed for years, the would-be-entrepreneur finding excuses at every corner. “I will wait until my next bonus”, “I want to get my life in order first” or “I need more experience”.
The fear is legitimate. The personal financial risk required to blow everything up and pursue a startup is no joke. Besides quitting the job, in Singapore it is basically guaranteed that the entrepreneur will need to finance themselves, plus the company, for a few months before perfecting an MVP that will attract any interest from an Angel investor.
In this city, that’s suddenly a S$20,000-$30,000 (US$15,000 – US$22,000) proposition (if not more).
This is where Antler, a new startup builder in Singapore, wants to help.
“We think there is a tremendous amount of value inside of individuals waiting to be unlocked. [They are] out there either trying to start a company right now and not having success, or they are sitting in a company as an employee just deferring,” said Tyler Norwood, one of the Partners at Antler.
“That’s what we want to unlock.”
Antler works by connecting potential Founders at Stage Zero with the goal of matchmaking complimentary skillsets while simultaneously providing resources to create startups.
Here is how it works
The programme starts with the application process (going on now) and Antler will kick off its first cohort of 50 people in July.
Step one involves basic problem solving tasks to facilitate group dynamics and avoid as many toxic partnerships as possible. The goal is not to find a pairing that will become lifelong friends, but rather two people with complementary skillsets who can work well with one another.
Lisa Enckell, another Partner at Antler, explains why.
“What we find in early stage startups is founders start companies with their friends. That’s all good but usually you are very similar to your friends. Studied the same things, have the same background,” she said.
“We think a good Co-founding team is really diverse. So we might match a technical co-founder with someone with deep domain knowledge.”
Each team will then get two months to brainstorm, research and perfect their idea. This may mean creating a go-to-market strategy, building an initial prototype or launching the MVP. The teams will receive a S$5,000 (US$3,800) monthly stipend to make sure the Founders don’t go broke during the ideation process.
The next step is where Antler starts to differentiate itself. After two months, the Partners will decide if they want to take the team and idea forward. If the answer is ‘yes’, they will make a US$100,000 investment into the brand new company.
Antler will take about a 10 per cent stake and the startup will enter a course that looks a lot like an accelerator programme.
For many startups in Singapore, raising US$100,000 just two months after brainstorming the idea is practically impossible.
Antler already has US$3 million to deploy and it wants to fund 20 to 30 companies over the next year.
Next comes Antler’s global mentor network, a core feature of the programme which the team is pitching as its market advantage. The team wants to help Singaporean companies go global, and the first step is connecting to mentors across Asia, Europe and in the US.
Notable mentors include; Andreas Ehn, who was the first employee (and CTO) of Spotify, Stashaway CEO Michele Ferrario and Ayesha Khanna, the Co-Founder and CEO of ADDO AI.
Enckell pointed to Y Combinator as a long-term goal for the mentor network.
“If you look at successful accelerators like Y Combinator, one of the major value-adds is the super alumni network they have. If we can come close to that, that’s when we have really done this; giving back and paying forward,” she said
For readers who may see a comparison to Entrepreneurs First (EF), that is not entirely wrong. The main difference is that EF focusses on bringing together people with strong technical experience and helping them become entrepreneurs.
Antler focusses on a broader swath of people. They will target a marketing professional with as much gusto as a PHD microbiologist. The idea is to find people who are already keen to start a company and give them a push.
“The goal is to get people into funded companies and become Founders. That’s the end goal,” said Norwood.
Ensuring Founders own the company
During the interview, I pushed back on the US$100,000 investment, suggesting that a ten per cent stake in a company seemed like a small stake and a risky financial bet for Antler.
Norwood responded by saying Antler believes it is helping de-risk the reason why most startups fail.
“In terms of the risk and our financial approach, we don’t see it as risky as it sounds on paper. If you look at the data, one of the most important things is the people building a company. We are making a bet on that,” he said.
Furthermore, Norwood said the company is “putting its money where its mouth is”.
“We don’t want to tell people we want to help them start their companies and then take 51 per cent of it. We want 10 per cent of the company for helping you get it off the ground, but it is your company,” he said.
A major motivation behind this ownership-first strategy comes from the executive team’s experience in Rocket Internet.
Magnus Grimeland, the Founder and CEO of Antler, was the Co-founder of Zalora — Rocket Internet’s beauty marketplace that has been sold to various companies across Southeast Asia. Norwood was the Head of Business Development for Global Fashion Group (the umbrella organisation with various brands, including Zalora, across the world).
One of the issues of the Rocket Internet model is the companies are never truly owned by the Founder or CEO.
Rocket Internet is fantastic for allowing people to rapidly increase their learning curve or convince future stars to quit their cushy corporate job, but in terms of actual ownership, it comes in the form of an equity pool split between the team.
This desire for ownership is why Southeast Asia is littered with Rocket Internet alumni who went on to start their own businesses.
Another reason why majority ownership is important is that if Antler took too much of the company, it can cause havoc when the startup looks to fundraise.
If the early-stage investor owns a majority chunk of the company, it scares away VCs who may like the idea but don’t see a financial upside in the capitalisation table.
Second, majority-ownership Angel investors have a lot of power, and if they decide to pivot the company on a whim, the Founder’s opinion is irrelevant. That can be a scare for the Series A VCs
As Enckell points out, the strategy is just good for business.
“From an ethical perspective [it is good] that the Founders starting the companies own the companies. But from a pure financial and business perspective it also makes sense, otherwise we aren’t going to have any follow-on investors,” she said.
Aggressive by design
The culture within Antler’s Leadership Team is one of aggressive growth, both in the startups and internally.
“Part of our ambition is to make this successful in Singapore and then quickly expand to other regions,” said Norwood.
“One of the things that underpins our management team is aggressive execution. The way this is going to happen is by us executing and making [our targets] happen well, but quickly.”
While still a tentative plan, the team then wants to expand to the Middle East and China in 2019, Australia, Brazil, India and South Africa in 2020 and finally launch a second Europe programme in 2021.
This means they need to find alternative measures of success, whether it is analysing early returns or seeing their alumni grab real traction in Southeast Asia.
“Ultimately the success will be how the things are going for the companies. It is a long-term thing. It’s not going to be an overnight success. Sure you might have some quick acquisitions but the biggest successes will come in five to eight years,” said Enckell
According to Norwood and Enckell, a successful 12 months will mean the team has run two Singapore cohorts, raised additional funding and are operating outside of Singapore.
“But ultimately, in a year, you are not talking to us but are talking to our portfolio companies,” said Norwood.
Singapore has a lot of outlets for veteran entrepreneurs or companies that have gained some traction. But, for the office grinder with a dream, finding enough money to take that leap of faith can be difficult.
Antler wants to be the parachute to help the next great Founder find a soft landing once they jump.