Travails and thoughts of a Malaysian deep tech investor

1. Numerous books and finance courses are within reach on investments into the equity markets - be it fundamental analysis, technical analysis - or other capital market instruments.
2. The risk/return portfolio theory be it CAPM or Markowitz sells the hypothesis that these risky investments can be managed and de-risked with the right behaviours.
3. But what of private assets where there are no financial history to work off? The risk profiles enter into a different realm when discussing private equity investments and the corresponding structures to deal with the risks, and it enters into a different realm altogether when assessing venture capital.
4. The theory is that by structuring terms which provides enhanced returns is a sufficient workaround for the thigh risks venture investors absorb. But that also assumes a venture investor fully understands the value of the idea in a future world when they invest, be it at an early stage or when a trickle of a pathway into commercialisation and revenue begins to take shape.
5. Without that capability of forming an opinion of what a future market will look like, on the trajectory of the market adoption of a product or a technology platform and how it competes with existing technology pathways now, means that assumption of risk diversification is rudimentary or theoretical at best. The best form of risk diversification is into the different technology pathways into a market we believe will turn out to grow into a meaningful size that a miss, even by a wide margin, may still mean that a hook on creating a new market, or replacing an incumbent's market share, no matter how small a portion provides a form of validation on the initial investment.
6. Yet, that has been the repeated mistakes we have seen. Just a rudimentary understanding of technology, market and product seems to be sufficient to trigger an investment when a substantial deep dive into each of these distinct dimensions are needed to obtain a clear view of whether an investment thesis could be built that is robust enough to be reviewed and stress-tested. We are not stress-testing on the here and now. We are stress-testing for the adoption of a product in a future market that we have no clear view on.
7. Having said all that, the ancillary patterns to look for are good, if not sufficient enough for a discerning and sophisticated venture investor with the ability to actually enable the tide to align itself to the potential investment. It has worked with a great deal of success before, though perhaps that is also serendipitious that there wasn't an exercise to play the information asymmetry on a novice investment partner that is not deemed to have the right credentials to be playing the big boys game.
8. In a way, selection of a priority market to play in appears to be a good starting point, and one that will continuously need to be iterated or reviewed frequently as new technology pathways are discovered or developed.     
9. It is not an easy risk management game to play when a right decision framework entails getting to a point where the investment thesis points to a confluence of a technology pathway providing a clear, differentiated advantage to a present incumbent within an acceptable commercialisation timeframe and the ability to protect that advantage either through IPs or trade secrets, while at the same time ensuring that the industry regulators, incumbents and market players are not unnecessarily preventing the entry of a new enhanced competition at the very least, but all the more advantageous when we consider entry into markets with a high degree of - and proven history of embracing - innovation.
10. There has been occasions too when business cycle turns within the anticipated timeframe, leaving the investment only with a sense of "only" furthering half-baked scientific and technological effort without getting the returns.
11. That high bar itself is enough to turn people off from going into deep tech investments. But the alternative of not doing it is an even more unacceptable position. 
12. For a society that values economic growth as an indicator of maturity, sophistication and civility, but unwilling to place bets on a scientific endeavour that colours society's adoption of objectivity, experimentation and data-driven decision-making, not putting in place enabling policies or initating innovation efforts, sometimes with the feeble excuse of we can't find people to do this, is extremely frustrating and counter-productive. 
13. There is no other way, but to embrace innovation and the risks associated with doing that. 

FLEXIT Strategy (or not)

1. The tottering and the flip-flopping is entering the final 96 hours on the back of 2 major reset programs called Ramadhan and a Covided-MCO.
2. Personal priorities are clearer, the next steps are not. The trading of security and stability to risk and instability has not been adequately resolved. But isn't that the case with hindsight and being in the moment versus projecting to a very unformed future?
3. Rightfully said that the future at least needs to be formed, at least partially, before an informed decision could be made. Anything less is just inadequate preparation. And this after thinking about things for 3 years.
4. The lack of a 100 day plan that is executable is worrying. If anything, it invites the question of preparedness. At the very least, the 100 day plan should have substantial revenues being generated. To point to savings and pension plans as the backups are good, but insufficient. The need is to work on the investable opportunities now. And it should be less fluffy than to point to the unit trust and equity investments which are just too volatile in the recession period at the moment.
5. The moment is ripe for an investment. To start with, it should be a small allocation into a lucrative growth opportunity. To understand how the market works and what the demand will look like will give greater comfort to make the jump. A vidcall to Shereen should be done.
6. I should be less instinctive as I am now for decision making when using own money for this venture. A more structured way of moving and taking tentative forward steps, and being ready for all the heart-aches. Being prepared for all eventualities. Being thoughtful and being persistent. All qualities being eroded by the toxic enmities I carry in Xeraya.
7. Not easy to rely on own capabilities when the environment isn't really conducive. The political upheaval doesn't signal too much hope, but more of trying to work through private interests. 
8. Balancing is next to impossible.
9. Timing is everything. But willpower to bend outside drivers and conditions are more than that.
10. Question is - am I the one? Or am I too racked by self-doubt?