From WTF to FTW: Wavemaker on making mistakes and producing exits

Everyone in the investing world knows Andreessen Horowitz, whose media savvy and heavy self-promotion has made it arguably Silicon Valley’s most influential venture capital firm. While many firms across the world have emulated its communications strategy to put themselves on the map, one early-stage Southeast Asian VC has bucked the trend.

Paul Santos, managing partner of Wavemaker Partners, has kept away from the spotlight. “I guess it’s not how we’re built,” he tells me, seemingly reserved when we met at a hotel cafe in Manila.

Don’t get him wrong. “I can talk when I have to. If I have to sell, I’ll sell,” he says. After all, that’s what VCs do when they raise money or seek to divest their company stakes. In fact, Santos has been in a string of meetings with limited partners for Wavemaker’s third Southeast Asian fund, targeted to close at US$100 million.

But his team’s focus has largely been on building a track record – Santos prefers to do rather than say; show rather than tell. And if he does tell, he wants no bravado in it.

So what’s changed? What has changed is that Wavemaker now has over a hundred investments and seven exits under its belt in Southeast Asia – four of which were made this year. Wavemaker is well on its way to having its first billion-dollar startup in the region.

“What’s changed is that I’ve had time to build my conviction,” notes Santos.

Taking risks

Understandably, that conviction was low when he began his investing career.

Before establishing Los Angeles-based Wavemaker Partners in Singapore in 2011, Santos was an entrepreneur who’d started and sold companies in traditional sectors like business process outsourcing, marketing communications, and pest control.

“I heard about this whole VC thing when I was in college, but I didn’t go to Stanford or work at Google or Microsoft. I didn’t see myself as a technical person. I had actually given up on the possibility of ever becoming a VC, but sometimes life throws you interesting curveballs you don’t expect,” he recalls, as he begins to speak more freely. Every question prompts an elaborate answer, showing his attention to detail.

One of those unexpected events was meeting Wavemaker founding partner Eric Manlunas at the time when Singapore, where Santos was based, had a program that matched up to 85% of a VC’s investment in a startup, capped at S$500,000 per company.

“Eric and I were introduced by a mutual friend, and we just hit it off. We have similar interests and a natural chemistry. He was born and raised in the Philippines so he was always curious about this part of the world. However, he was based in LA and didn’t want to be a fly-by VC. So I asked, ‘Do you want to invest together?’”

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