Korea Venture Capital Firms Suck

Assinine is Better Than Clueless

A few days ago I had a meeting with one of the major domestic venture capital firms in Korea. For the software company I'm helping out, we started the process of seeking a second round of venture capital financing. A local firm expressed interest so they visited on Tuesday to hear our presentation and see our software demostration. The end result was the same frustration on my end and cluelessness on their end I encountered when we were raising capital for my first two startups.

I waited a couple days to write this entry because I wanted to put down my thoughts in a calm state of mind. I wrote about the immature venture capital industry in Asia before, especially Korea, but this is a more blunt assessment. Vast majority of the professionals are simply morons. They are clueless. Especially with many of these domestic funds, they don't hire the best people since these people don't get carry (percentage of the earnings) in the fund. They are just managers hired to find and decide on investments, but incentivized to avoid risk. Many are not even the best and the brightest from their schools or professional backgrounds, but even if they are they all function in a similar manner... being clueless.

So during my meeting, I was reminded of my prior efforts in pitching for HeyAnita Korea. We met with many of the domestic venture capital funds in Korea and didn't expect much after the first few meetings. Same reaction, same hand-holding, same cluelessness. It was frustration to a painful degree for our team. When we met with U.S. venture capital firms, we were challenged with probing and insightful questions, feedback that made our business model better, and we always felt like we came out better from our meeting whether they were interested in us or not. I was hoping for just half of this from Asian venture capital firms, but this dream never solidified.

So on Tuesday, these two professionals didn't know how to ask questions or really challenge our thinking. Their two main comments I remember were, "I don't see the market for it." and "I don't see many potential applications." Typical Korean venture capitalists. This is after we explained how potential customers we spoke with saw so many applications and we gave several examples. Encountering cluelessness is frustrating for anyone pitching for financing.

Afterwards, I spoke with my friend, Jimmy, and talked about the meeting. He started to laugh because he knew the firm and said, "Of course they're like that... they're a typical Korean firm and the most conservative fund."

I replied, "I would rather that they be extreme assholes but friggin' brilliant, so that they could tear our business model and company apart, and give us a hundred reasons why we won't succeed or what we should change to improve the company. "I don't get it" just doesn't do it for me. At least ask me one good question..."