Ep553: Vanessa Ho – Dig Deep Into the Business Model

Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. To reduce risk in your life, go to my worst investment ever.com today and take the risk reduction assessment I created from the lessons I've learned from more than 500 guests, fellow risk takers, this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, Vanessa, whoa, Vanessa, are you ready to join the mission?

Vanessa Ho 00:42
I'm super excited. Thank you so much for having me today.

Andrew Stotz 00:45
I am very excited to have you and learn more about what you've done in your life, and also what you're doing right now. So let me introduce you to the audience. Ladies and gentlemen, Vanessa, who built a Student Alumni run angel investment network, and educate students and fresh graduates on startup, and private sector investments. That already sounds pretty cool. Formally, she was a Venture Capital Analyst and a social media content creator and host. Currently she is in a social fi startup called so cold, doing business development, and marketing. Vanessa, take a minute and tell us about the value that you bring to this wonderful world.

Vanessa Ho 01:30
Awesome, thanks for the introduction, I think the biggest value that I bring to the wall would be more for the fellow students and fresh graduates in my school and beyond in Singapore. So I'm from National University of Singapore. And what I tried to do is set up a network such that as many students as possible can interact and learn the best practices from a very valuable pool of resources has been under attack, which are our alumni themselves, who are C suite executives, their founders, or even exited founders, their partners of venture capitalists. So providing the platform for interaction helps them do their own network plus learn really real advice and investment lessons that they can learn in the finance module in school. So that's the real value that I'm really excited to push for even as I graduated.

Andrew Stotz 02:21
That's interesting. You know, I mean, in some ways, you would think that alumni don't want to be bothered, they're very busy. You think that students you know, okay, they're learning stuff in their school, like, that's enough or whatever. I'm just curious, like, how easy was it to bring this together? Or how hard was it to bring it together and build momentum in it?

Vanessa Ho 02:41
Yep. So I think the initial mission came about really not for the sake of education, and learning, it was small, because we identified every single year in our school, all the demo days and accelerators are running very fragmented, you have your modules, your calls, the different faculties are running their own micro demo days, and are getting grants. And about 400 startups are created every single year, on startup ideas, I mean, like pre funded, pre POC, proof of concept, and more. And most of them don't really take flight because of the lack of strategic funding and investments, and also the right ecosystem and support. So we actually created this network to help the startups themselves to get the alumni to Angel invest, and to coach them as strategic advisors and investors themselves. So when we were building this organization, of course, we couldn't do it alone, it was me and a couple of friends. And we decided to recruit tons of students to help us do things from due sourcing, to investor relations, reaching out to people to do tech solutions for the startups to facilitate, you know, in house trainings, such that we can run this organization to the best of our ability, where everybody is, you know, have a high level of knowledge on what angel investment looks like. But then during this journey, then I realized the real value actually also lies in the education part when people when the students and fresh graduates who join our club, get to learn from the investors or learn from our in house trainings. So that's how it came about. And we also found out that these alumni are more than happy to come back to join just said, nobody really, you know, talk to them or call them out and say, Hey, we've got a bunch of hungry students who are willing to learn from you. We've got tons of startup who really wants investment from the right places, and you guys are the right people for it. And the alumni are way more happy to help and sort of zoom calls your first attend on demo days. Find us even so that's really exciting for us.

Andrew Stotz 04:37
Yeah, I mean, that's a major lesson for the listeners out there is that people are generally more accessible than you think. And a lot of times we hesitate to reach out to people in Thailand we have a word which is called Green, Jai and green Jamie's like I don't want to bother them or, you know, feeling that way. And I think that what you learn Learning I've learned in my own life is that when you have something good, good that you're doing, and you want to reach out and ask someone new question or ask for their help, or, you know, just calling someone say, Hey, I saw you on LinkedIn, you want to have a coffee? Well, okay, that doesn't bring the mission out to them of what you're doing. But when you bring something, you know, serious to people, people are willing to listen, and they're willing to contribute much more than I think a young person thinks. So my lesson for the listener, for the listeners out there from what you've just said, is that once you've got something in your head that you think is interesting, don't hesitate to reach out, you know, what's the worst that can happen? As I say it when I reach out to big name people, I say, I always say at the end, Mom always said it doesn't hurt to ask.

Vanessa Ho 05:52
You know, in Singapore, yes, a similar thing. It's got Pisces Pisces, it means embarrassed or, you know, you lose face your you leave a bad impression. But what I tell my team is you really have to not be passe. Just reach out to people call LinkedIn, message them, and it doesn't hurt. At the same time, you know, you kind of boost your confidence level a bit when you're networking on the online space, such that next time when you are meeting people in class, and it's less scary and daunting, knowing that you slide into the DMS or all these big names. And I think when a few people reply, even if it's just like, 10% of them, you feel good. And boost your ego boosts your confidence. And you also learn a lot of things online.

Andrew Stotz 06:34
Yeah. And it's, it's occasionally there's going to be a jerk that says, eff off. Yeah. And you know what? That's, that's, there's also a lesson in that, you know, like, okay, that's kind of the worst thing that's going to happen if someone goes, you know, eff off. And once you face that, it makes it you know, like, Yeah, that's fine. That's place that you're at. That's okay. I had one of my best rejections of Vanessa, when I invited someone on this show, is I told him, would you be willing to come on and share a story of your worst investment ever? And he wrote back? Interesting idea. Not my style.

Vanessa Ho 07:10
Really.

Andrew Stotz 07:12
I just said, I just had a person. Yeah, I just had a person that has a million followers on LinkedIn. I asked him to come on and share their worst investment ever. And they said, Haha, no, thanks. So it's a caustic? Yeah. And I just and I had to, I had to write back to him and just say, last is not funny. It's painful for my listeners. And for my guests. I appreciate your time in replying.

Vanessa Ho 07:45
That's a great, yeah, no. Yes.

Andrew Stotz 07:47
Hopefully, hopefully, I'll get him so mad that will come on the show. Well, now.

Vanessa Ho 07:55
Don't feel that you know, the time spent here is the worst investment ever. Exactly,

Andrew Stotz 08:00
exactly. So let's, before we move into it, I just want to ask, tell us a little bit about what you're doing right now. And you know, what's the best place for people to follow you and learn more about what you're doing?

Vanessa Ho 08:13
That's cool. So, before joining SoCal, I was supposed to go into management consulting, and I decided to screw it dye my hair blue. So it's a bit green, and blue, if you can see it on the video feed with Andrew. And I decided to jump inside startup. So SoCal is a social fi startup, where we try to help creators engage with the communities directly with embedded utility in NFT. So we are famous for this thing for Irene tau. This is one of the co founders, she's very viral NFT collection, and that was bought by celebrities, and it made headlines all over the world. So probably the most famous Asian for a while. And so I'm helping her together with the other co founder and pushing the mission forward to help creators with more value to their fans, to the community. And for the fans to get to know the creators even better, to really very simple platform with all these complicated web three functions and crypto function MassCEC in a very seamless social media platform for web pretty

Andrew Stotz 09:20
interesting. And where can we go to learn more about that? What's the website?

Vanessa Ho 09:24
Yep, so you can find us SOC o l.io. So that's so cool. And I'm on LinkedIn. Vanessa home at and I'm also on Instagram, and Vanessa as well. And on Instagram, I do very usual content creator things where I post my own outfit or the day beauty fitness. But you know, when it comes down to serious conversation in business, I like to talk on LinkedIn on pockets like this.

Andrew Stotz 09:51
Great. Okay, so we'll have links to all that in the show notes. Well, now, it's time to share your worst investment ever and since no one goes into their worst The investment thing here will be, tell us a bit about the circumstances leading up to it, then tell us your story.

Vanessa Ho 10:07
Well, this one is a tricky one, because it still makes me feel a lot. Every time I talk about it. I don't think a lot of people know about this one. So my worst investment experience was in Angel investment. So everybody knows that that's your highest risk of investment class, you go in with the mindset that you may not be able to get anything back. But you also hear stories about how people went in early and Alibaba and Uber and Facebook and become whales and in, like, 10 years, so it's very glamorized. It's all the glitz and glamour. But at the same time, a lot of people have learned from it. So I entered my first angel investment, shortly after I started from NUS alumni ventures, just because I built my network, angel investors who liked me and referred me in deal swap. So I'm not an accredited investor right now. But of course, you can do internal agreements with investors to park the money under them, and they invest in a syndicate. So to do that, I was looking at it, which is my favorite first one was a company that does paywalls, micro paywalls, for use. So they're pretty big in Southeast Asia, especially in Indonesia, with 15 million monthly active users, which is great. credentials are great because the co founders will ex Google bytedance You know, all the sexy new sexy logos and pitch decks and I mean, that's what makes people like me, X VC get excited right? Softly right now that think about it. But you know, we see names like McKinsey, Bain, Google by dancer, like, Oh, this guy's legit, this startup is going to be legit. So I didn't really do too much due diligence with this whole overconfidence, in the startup with the angel investor who brought me in also was really close to them. And I have full trust in Him. So because of that, I just went in pretty blind, wire the money and read the contracts didn't really read the contracts in detail, actually, and didn't do like too much of proper due diligence, except trying out the app, reading some news about them, getting excited that they have quite a good team. And that's about it. That's all I know about son. And then few months later, I checked the news, startup hasn't really made too much progress. In fact, the founders themselves are getting nervous about the long term business sustainability, given how there's so much free news out there right now that they may not have a need for micro paywalls for news. So that got me nervous. So Monday month after I keep checking the news, checking the news asking the other angel investors are there any updates, and I realized, okay, this company isn't going anywhere, I'm just gonna write it off in my personal books, and just pretend that it's gone. And coming from like a fresh graduate, I think back then when I was doing students, student, actually, student, undergrad student, it's a lot of money, even though I wanted to push my risk appetite a bit. But I mean, all these money means a lot compared to if I was a big, accredited investor with tons of money to burn, right? Or as a student, you know, every dollar makes a lot of difference for me. So I realized while like, I think I really need to reevaluate whether angel investment is a good timing, or whether it's a good timing for me to go into angel investment. And, you know, reflecting about my due diligence process just made me really disappointed in myself, not anyone else that can put the blame on the founders of the startup, or the angel investment who brought me into this deal. It's only myself that I can blame for my lack of due diligence in this company.

Andrew Stotz 13:48
Wow, well, how would you summarize the lessons that you learn?

Vanessa Ho 13:57
I think the biggest lesson for anyone going to private sector investment is to not be swayed by your flashy big names, your big logos of where the founders have been, who are the partners and strategic advisors, I think really, like digging and breaking down into the fundamental business model. And seeing whether it's something that customers need in the long run would be still the most important thing and everything else is you know, noise and distraction. It's like the packaging is a gift wrapper, right? But when you unbox that and you see, okay, what is what, what's the value of this gift that helps you in your angel investments. And of course, when you trust other angel investors around you, it's really helpful as well, but at the same time, it's your own money. It's your own homework that you have to.

Andrew Stotz 14:43
Yeah, well, maybe I'll share what I take away from the story. I think it's a good time to revisit what I've learned from all the interviews that I've done. There's six common mistakes. And I want you to think about Vanessa, like, which ones were the ones so let's Go through it. First one, number one most common mistake that people make on this show and who have sent me their stories of loss is failed to do the research? Well, we saw that with the due diligence, number two, failed to properly assess and manage risk. Now you understand that angel investing is high risk, therefore, you know, you want to think about it in your total wealth context. And be careful with what you're doing instead of just swinging for the fences. So risk is the second one, the number three, driven by emotion or flawed thinking. And I think what you've just described is the emotional appeal that you get by looking at these pitch decks by looking and also just the idea like, I'm going to be in this thing, I'm going to be in the big world now. Right, right

Vanessa Ho 15:47
to be part of the party. You know, there's a huge sense of FOMO when it comes through in your investment, you don't want to miss out on any good views, you want to hang out angel investors who are really cool as well. Yes, very emotional.

Andrew Stotz 16:01
Yeah. So it's like, I get a seat at the poker table. Yeah, here's my money, I'm gonna put it down. And of course, there's other people at the poker table, too. Number four, most common mistake is misplaced trust. And I think that we heard some of that, and I trusted, you know, the big names, and I trusted, you know, the experience of these people. But that trust is, even if they are, and it doesn't sound like this was a case of fraud, lying, cheating, it's just, maybe the business model never was going to work or it was broken, or it broke eventually. And then number five is failed to monitor their investment. And this is where a lot of people will give money to people in other organizations, and they won't keep on top of it every single month, or whatever it takes to make sure that your money's you know, working for you. And finally, number six, I just put this one in because I couldn't figure out how to do it. So number six is invested in a startup company. And what I've found is that a startup investing is binary, you either gonna make a lot, or you're gonna lose it all. Very rarely do you end up in the middle. And the result of that is, it's not the type of investment you want to do, when you don't have a lot of wealth. And the other thing about startup investing is, and you know it now about syndicates is that you want to invest in 10 startups never invest in one. Those are some of my takeaways from what I've heard from you and what I've heard from other guests. Is there anything you would add to that?

Vanessa Ho 17:26
Yeah, I completely agree with all your six lessons very relatable. startup investing is very sexy, especially all these big news on you know, Jason Calacanis. And all these super angels making tons of money from the early days of big tech startups. But at the end of the day, the timing has changed, your own experience has changed, may not be suitable for every startup. And your risk appetite may not be the most suitable for this class of investment as well. So be very careful. But it is fun. And I'll still do it, even after this mistake. But hopefully, you're a bit more cautious.

Andrew Stotz 18:02
You know, there's one last thing I would like to touch on. And I'll tell the story of my own experience, my worst investment ever was, basically I invested in a startup company of a friend of mine. And what I learned about startup investing, I learned a lot from this experience, the first thing I learned is that you want to look for trust, do I trust the person? And do I trust his team of people second thing, and I trusted him. The second thing was, is the idea good if you trust them, but the idea is bad, no point. If the idea is good, but there's no trust, don't do it. So I liked his idea. So I felt like the trust in the idea was there. So the next question is execution can this person execute. So if you trust the ideas good, and you think that they can execute, the last one that I care about is capital, I don't want to be in a situation where I'm the only provider of capital. And that's what I was in this particular case. Now, in this case, what happened was, he couldn't execute. It was just very difficult. And he was going into the big leagues globally. And I realized that we would need to raise at least five to $10 million to get where we need to go in the next step. And I could raise that. But the point is, I wasn't I wasn't comfortable raising it. And in the end, we set some goals of what we wanted to hit, we didn't hit those goals. And we had to shut down the business. And I lost a lot of money. close to a half a million dollars. And, yeah, now, but that's not why I wanted to share this. Why I wanted to share this was because I was thinking about you, as somebody who's trying to promote investment in, you know, startups, the angel investment network, the reputation that you have in school, you know, to walk the

Vanessa Ho 19:48
talk, right, so that's one of the reasons why I want to go into it so badly as well.

Andrew Stotz 19:52
Yeah. And so what happened in my case was, I was president of the CFA society at the time. Chartered financial analysts in Thailand, I was a leader in the finance community, I had been voted a number one analyst in the past, and I had a very good reputation. But inside, I was hurting so bad that I was losing on this investment. And I wasn't losing small, small, I was losing big. And I felt shame. And I felt guilt. And I wasn't able to share. And I do have people that say, I would love to come on your show, but it's just too sensitive, right? Now I'm too close to the pain of that loss.

Vanessa Ho 20:34
At the same time, it's more or also with that reputation that you carry a lot of expectations that you want to live up to, and a lot of pressure on yourself to be, you know, a rockstar investor, given that, you know, you're a lead analyst, and I lead this team and organization, you're expected to be you know, a rock star, whatever you do. And if you make mistakes, people be scared. And that's gonna be counterproductive. And yeah, it's gonna fire a lot of submission that we're trying

Andrew Stotz 21:03
to do. So it was hard. I mean, I was going to events, and I was being a leader of the organization. But inside I felt like I really had made. Now the good news is I wasn't doing anything unethical or anything like that. But the bad news was that I wasn't, my move wasn't a very smart move. In the end. I learned a lot and all that, but I just want to the reason why I tell that story is because I want the listeners out there to know that sometimes there's pain and shame that comes with losing. And sometimes you may not feel comfortable sharing that with the world. But I would suggest that you share it with somebody close to you that you trust. And I have my best friend Dale. And we've been through the ups and downs since we were 14. And basically, I could share everything with him. And that prevented me from like collapsing under the weight of that. And eventually I was able to tell my story. So part of this podcast is the authenticity and the emotional journey that we go through that. But I want to ask you now based upon what you learned from this story, and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?

Vanessa Ho 22:10
Well, the one lesson, or I think something really useful is to really learn the fundamentals of investment. It's different from my stocks, it's different from buying ETFs and crypto, it's completely different. Private sector is a whole new world to discover. So there are a lot of really cool and free resources online. There are some pretty affordable online classes taught by really prominent angel investors as well. Jason Calacanis has, has won, a lot of VCs do and as well, I personally conducted an organized one at the previous VC, teaching young executives on Angel investment. And if you take on one of these few day courses, it helps you understand the fundamentals behind private sector investment, how the math works behind it, and what are some of the experience was one of the lessons that the experience investors have? And sometimes they even share it with them, you know, how do you think in the investor lens, which is very different from you know, buying a stock in the public market? So I'd say, take out one of these courses, I think there's plenty of online resources for that, to get yourself very knowledgeable in the space first, before going into it or putting any dollars into it.

Andrew Stotz 23:26
Great advice. And in fact, if any of the listeners out there want to become an expert in valuation come to my valuation masterclass boot camp, it's a six week intense program about how to value companies. But I like your advice, Vanessa, and I've taken so many different courses over the years, I took a great course from a lady named Amy Porterfield, about how to create online courses that really transform people's lives. And I put so much of what I learned from her course, which wasn't cheap into my course to make sure that, you know, it's a fantastic experience. All right, last question. What is your number one goal for the next 12 months.

Vanessa Ho 24:09
This one is also relating back to NUS alumni Ventus is happening. I'm taking on the lead for the next two Academy years as an alumni myself, and we're starting our very first syndicate find from a very small pool of angel investors who are ex founders or their VCs right now. So we are in the middle of building the fund structure as identified angels that we want to raise funds from. And that's going to be very new and exciting for myself and my partner, who's going to be doing this fund and really hope that we can bring a lot of value to the startups as well as the investor themselves in the long run as well. So, big things, big things.

Andrew Stotz 24:53
Exciting, very exciting. Well, listeners. There you have it another story of loss to keep you winning If you haven't yet taken the risk reduction assessment, I challenge you to go to my worst investment ever.com right now and start building wealth the easy way by reducing risk. As we conclude, Vanessa, I want to thank you again for joining our mission. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Vanessa Ho 25:27
Thank you so much, Andrew. And I hope all the listeners here have enjoyed my story and giving better decisions next time. Thank you so much. I had so much fun today.

Andrew Stotz 25:36
We appreciate it. And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Today we expanded our mission to help 1 million people reduce risk in their lives. This is your worst podcast host Andrew Stotz saying, I'll see you on the other side.