Navigating the Malaysian funding landscape in 2023

Dan Lain-Lain (Malay for “and others”) is a weekly column by TIA journalist Emmanuel Samarathisa that dissects the goings-on in the Malaysia tech scene but with a heavy mix of current affairs, policy and politics. Click here to read past articles.

First post of 2023. Let’s go.

One of the complaints I usually get from newbie founders – and even from some slightly seasoned (and at times saltier) ones – is how complex fundraising is. That, and if they are operating in Malaysia, the lack of options when it comes to investors.

But with a new year and a newfound optimism, there’ll be founders who’ll try their luck to snatch some money, be it to scale their business or last another year.

What better time than to talk about the legal aspects of fundraising and some of the trends and landmines that are common here? One of the people I know who has worked with startups of all shapes and sizes is Izwan Zakaria.

Photo credit: Izwan Zakaria

He runs Izwan & Partners, a law firm that helps startups and tech companies do business and raise capital in Malaysia and overseas.

In 2021, he was consulted by the World Bank and co-authored a study on assessing the startup financing ecosystem in Malaysia.

Izwan is also a familiar face in programs run by state-owned Malaysian Global Innovation & Creativity Centre and Malaysia Digital Economy Corporation.

Here’s our conversation, which has been edited for brevity and clarity:

What are some issues you are still seeing that’s common among founders today?

Izwan: A common phenomenon is that a lot of founders underestimate the timeline that is needed to complete the fundraising.

A lot think that when they have successfully pitched to a venture capital firm or even a corporate investor, they soon realize that the money doesn’t come the next day or after the next week.

A series of things need to take place until you see the money in the bank account. Sophisticated investors – from sovereign wealth funds to family offices to corporates – do extensive due diligence that lasts from three to six months.

If the founder or the company has limited cash runway, they need to work backward to know from the moment they start fundraising to when they are actually going to see money in the bank account.