Hunting for deals: the rise of VC scouts in SEA

Venture capital (VC) firms often claim to have an investment thesis and a structured approach to investing. But when Swarandeep Singh Kambo joined a VC firm years ago, he found that wasn’t always the case.

Seeking to mend the gap in his experience, he joined a VC scout program by Saison Capital in 2020 while still working at Unleash, an innovation lab. Throughout the course of a year, Kambo attended online courses on dealmaking and gained experience in the VC investing process, including how to assess potential deals.

Photo credit: 123rf

“That process was very helpful for me, because my [previous] full-time experience did not help me learn how to screen investments in a very methodological way,” he says.

Saison Capital, which invests in seed to series A rounds in Southeast Asia and India as the venture arm of Japan’s Credit Saison, launched its VC scout program in 2020 to help the firm with deal sourcing. In return, participants can learn how a VC fund works.

VC scouts might not be popular yet in Southeast Asia, but depending on whom you ask, the region either has a scarcity or an abundance of VC scout programs. Much of it boils down to how you define the term “scout” in the first place. Chris Sirisereepaph, a partner at Saison Capital, explains that there are three categories of scout programs.

One is incentives-based, where scouts get a success fee—typically a percentage of equity—for deals they help broker. Another is driven by deal sourcing, where scouts are trained to find and assess deals. It may or may not be designed around incentives.

The third type is a community- and education-based program. In Southeast Asia, the Saison Capital Scout Program and Insignia Ventures Academy fit this description.

Super-connectors in the startup ecosystem

However, Yinglan Tan, CEO and founding managing partner of Insignia Ventures Partners, which is active in early-stage investments in the region, hesitates to use the term “scout program.”

Photo credit: Insignia Ventures Partners.

“[To call them] scouts, in reference to participants of Insignia Ventures Academy in particular, is a misnomer because participants are not joining to [learn how to] scout for deals but to gain the tools, connections, and experience they need to eventually become VCs themselves—not just scouts,” he says.

So what exactly are VC scouts?

Ideally, scouts are super-connectors: people with strong network-building capabilities who can use their skills and connections to find great founders and companies to invest in. They can potentially help VC firms spot deals they otherwise would have missed.

Bootcamp for aspiring VCs

Does SEA really need scout programs?