From Jeff Bezos to Tencent, entrepreneur Nipun Mehra has many investors backing his Indonesian e-commerce startup Ula.
But as a former budding investor, he had a head start when it came to financing.
One of the earliest sponsors of Southeast Asia passenger sourcing company Gojek and other regional startups while at venture capital firm Sequoia India, Mehra said each company had three key questions that he always asked.
Here are the questions.
“One, what is this vision?” Mehra said CNBC Do it.
Investors want to know which founder their company wants to see and whether their target market is big enough to support that vision, he said. Thus, potential founders should be willing to share their big idea – and market data to back it up.
In Mehra’s case, Ula created an e-commerce service for millions of street kiosks in Indonesia, known as warung, that are used daily by locals. In a country of over 270 million people – and therefore potential consumers – this was a large accessible market.
“Secondly, is the team good enough to lead such a race?” – said Mehra.
“Good enough” means that the founder is “hungry enough and smart enough” to realize his vision, he explained.
But this also implies that they also need to be aware of their weaknesses and be able to attract others to balance them.
For example, while Mehra had 15 years of experience in e-commerce and investment, he was less familiar with the Indonesian market and encouraged the co-founders to further their knowledge.
“Third, what is the track record?” – said Mehra. “If you need [reach] there the track record should be able to confirm the fact that this vision can someday be realized. “
This includes showcasing the company’s success to date through a combination of customer feedback, data analysis and financial statements, he said.