Inside a VC’s mind: Rakuten Ventures’ managing partner Sae Min Ahn

This article is part of Tech in Asia’s partnership with The Jay Kim Show where we publish the revised transcripts from the show’s podcast interviews with top entrepreneurs. This is heavily revised from the original show transcripts. For the full interview, go here.

Sae Min Ahn is the managing partner of Rakuten Ventures, which has Japan’s internet giant, Rakuten, as its mother company.

In this interview, Ahn goes into how he looks at investments as a VC and offers some pieces of sound advice to founders looking for funding.

Who is Sae Min Ahn?

I run a venture capital arm of a conglomerate called Rakuten in Japan. We started about nearly five years ago to understand how to do investments in Southeast Asia in a synergistic way.

How did you become an investor?

Actually, I wanted to become a journalist. I majored in broadcasting and journalism in Sogang University in Korea. But I also wanted to learn about business and started wondering about the what and why of business.

When I entered the workforce, I worked at two to three startups in Korea and moved on to Hyundai Card (Hyundai’s credit card company).

After a year, I moved to Google where I spent about five years covering things related to hardcore telesales and publisher relationships. Later, I moved on to business development, corporate development in Southeast Asia, and things related to actual investments. This kind of daisy-chained into an opportunity at Rakuten, as they were looking for a way to do investments in Southeast Asia.

Going into Rakuten, I really didn’t understand what the costs were. But it’s the kind of group where you will be given as much space as you want as long as you bring in the promised KPIs, OKRs, or overall performance that the group expects of you.

How do you look at investments?

We do investments anywhere between US$1 million and US$10 million. We don’t actually put a lot of emphasis on “We only do early-stage investments,” or, “We only do growth-stage investments.” That’s because a lot of times the liquidity needs are so different in various verticals.

In terms of sectors we focus on, we have naturally gravitated—at least for now—toward tech-based companies like those related to AI, adtech, data transferal formats, and whatnot. I’m also starting to look at biotech companies.

How I look at investments has changed so much since 2013. My investments in the past were thankfully right, but they were done with so much blindness. I never really started out with a full deck.

But what I came to realize is that we simply want to invest in businesses that make sense to us. What making sense means to Rakuten Ventures is this:

• Does this business have some asymmetrical, informational, or sourcing advantage?
• Where is the actual relationship arbitrage coming from?

How involved are you in a business as a VC?

What is your advice for founders looking for funding?

What did you learn from your mistakes as an investor?