How This Female Investor Finds Purpose in the Venture Capital and Family Office Landscape
Sharon Sim has a purpose: to make meaningful change in the world. How? By investing in early-stage tech companies making a social or environmental impact.
“I’ve come to realise that the monetary reward is one thing, however, to see someone succeed in their dreams and be a part of it? It’s very emotionally fulfilling and something that I personally want to continue doing for the rest of my life,” says Sim, who has more than 20 years of experience in capital markets and wealth management.
Sim is financing fresh ideas through her latest enterprise, Purpose Venture Capital, cofounded with growth and philanthropy advisor Von Leong and venture capitalist Sertac Yeltekin in late 2020.
“There's a lot of power in combining people, purpose, and technology. We’re trying to find the intersection of these three very big driving forces,” she says. “I think investing in the right teams and technology could have a multiplier effect on society.”
While Purpose Venture Capital spoke with around 50 companies in 2021, it has chosen to invest in only three. This is intentional because the firm takes a hands-on approach that enables it to truly connect with the startup founders.
“We look out for founders that we believe have the right mission and philosophy, and work together with them to grow together," explains Sim. “We want to be very thoughtful and selective of the companies we invest in.” For instance, their first investment was in ZumVet, an online pet health care service company whose female founders bring complementary skill sets: a doctor by training and a tech entrepreneur.
Sim also helms a Singapore-based multifamily office, which she founded in 2019 and is currently undergoing restructuring, with a refresh to be unveiled in 2022. The multihyphenate foresees that Singapore will reach the goal of becoming a family office hub.
“In the last two years, we’ve seen a huge spike in families enquiring about setting up proper family offices in Singapore,” she says. “The number of millionaires and billionaires in Asia has been on a very strong trajectory of growth. There’s also a lot of newly-created wealth; these are tech companies and new industries—ones that were not around, say, 20 years ago—that have done phenomenally well.”
Below, Sim shares more insights on family offices in Asia, as well as her journey as an investor and how women are playing a greater role in the finance industry.
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How do you see the approach and structure of family offices evolving in Asia?
Sharon Sim (SS): In Asia, the whole family office market is still quite nascent and evolving very quickly. We're in this phase where the first and second generations are passing down their wealth and businesses. What’s interesting is the next generation's views on wealth. Their relationship is money is very different from their parents and grandparents; they’re looking for purposeful ways to deploy their wealth.
The conversation with the third generation is very engaging, and that's where what I do in the family office becomes very meaningful. The newer generation is thinking about sustainability and climate change as well as philanthropy, but with the expectation that what they're doing has an impact and also brings in profit.
The combination of profit and purpose is now more relevant than ever. In this world, we call it impact investing—amongst many different names—but I think effectively, you want every dollar that you invest to be impactful and also bring certain economic value.
Has Covid-19 impacted the family office landscape in any way?
SS: Covid-19 has actually accelerated the process of getting the families to think differently about wealth. I think that the mindset has changed; the fact that a virus has shut down the world globally for months has put a sense of mortality and fragility in the mind of the families. There's more urgency now to plan for the future, especially in terms of protecting and growing their wealth.
The combination of profit and purpose is now more relevant than ever.— Sharon Sim, co-founder and general partner of Purpose Venture Capital
How would you define your leadership style at the firm?
SS: I think, as a female leader, you lead with your heart more than anything. We’re ambitious about how we want the business to grow, but we’re also passionate about the people. I spend a lot of time explaining the why. When we hire people or bring on juniors and interns, it’s important to explain to them: why are you doing this? Why are we building this business together? What do you want to achieve five and ten years down the road?
A lot of times in finance, things move very quickly and we lose sight of the bigger picture. As a leader, I think it’s important to share the bigger picture and to see that in everything we do, everyone in the team plays a part and contributes to the vision.
As a leader, I think it’s important to share the bigger picture and to see that in everything we do, everyone in the team plays a part and contributes to the vision.— Sharon Sim, co-founder and general partner of Purpose Venture Capital
You've been investing for many years now. What's your investment approach?
SS: I started in finance when I was 22, straight out of college in the US. I’ve seen a lot: the dot-com bubble, SARS in Hong Kong, the debt crisis, Brexit, and, of course, the financial crisis of 2008. Thus, I view investments with the lens that things can change quickly as the financial markets have been always been a very volatile space. While I've been through a few market cycles and learned my lessons along the way, I'm not jaded. I still feel very hopeful for the future. There's definitely a lot of technology that's coming that could really change our lives.
I use a barbell approach in investing. This means that I would have part of my portfolio, preferably 50 per cent, in assets that I deem as safe. The other part is higher-risk investments. High risk, high returns, right? I invested in African startups, fintech and even edtech before I started Purpose Venture Capital.
How did you build your confidence as an investor?
SS: Confidence is a funny thing. More than just pertaining to investments, it’s confidence in yourself. I invested my own money young and lost money during the dot-com bubble as a very young analyst who didn't know much, but wanted to participate. Truly, the best way to learn is to have some skin in the game.
I think it's important to be investing all the time. You can start small, whatever you can afford to lose. You won't get it right all the time, but that's how you learn. It’s finding out who you are as an investor; not just the returns that you want to get, but the risks you can tolerate. That’s the price of participating in the markets—you have to be able to sleep well at night. If you can’t, then investments might not be right for you. When the market pulls back and when things go pear-shaped, you have to understand the risks for what they are.
What has your experience been like as a female investor and how is the landscape changing?
SS: I guess females bring a different perspective to investments. You can say that we are a bit more empathetic in terms of the way we look at businesses, and we bring a different kind of management style to the room.
In my own experience, I do feel that sometimes your intuition—the female intuition—is very strong. I've been investing for quite a few years and if there's one thing you learn, it’s to trust your instincts when it comes down to people and businesses. I'm also decisive and can make a decision very quickly.
I would love to see more females in finance, and I have to say that the barriers to entry are coming down. We also have a lot of female role models emerging over the last few years, which is encouraging to see. For example, Citi has its first female CEO, Jane Fraser.
The good thing with Covid-19 and with more females in finance is that the whole idea of a work-life balance is going to be, well, a lot more balanced than before. When I first started, juggling family and work was always binary. But I think now, with technology, it’s becoming of a reality that we can attain work-life balance.
Lastly, confidence in yourself is very important. I think females always struggle with that—a lot of us suffer from self-doubt and imposter syndrome. Sometimes, you just have to set your inner voice right and then stop overthinking. And I always say to myself, just go for it.
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- PhotographyAnna Shatilova