At the inaugural annual Capital Markets Forum by AmCham last Thursday, a panel discussion on “Entrepreneurs, creating a business, and launching a business” offered insights into entrepreneurs’ perspectives.
Moderated by investment specialist Ratana Phurik-Callebaut, four founders of growth-stage startups lined up for a lively discussion on how they founded their business, raised funds, and even their criteria for choosing investors.
The panelists were In Vichet, of Groupin, Chhan Borima, of Nham24, Parth Borkotoky, of Azaylla, and Richard Yim, of Quantum Engineering and Manufacturing.
This part looks at how Richard started his company and dealing with investors.
On founding his company in 2019
Running probably the first of its kind manufacturing as a service company in Cambodia, Richard and his engineering team build advanced machines for the international market. When asked by the moderator how he came up with the idea and business model, Richard said, “My wife is what led me into Quantum. When we moved back from Canada to Cambodia, we needed to produce and build machinery and robotics here.”
Turning Cambodia Into A Tech-Ready Country
He quickly realized there were no manufacturing shops able to build high-quality, high-end manufacturing products that adhere to international standards. So, in 2019, he decided to set up his shop, Quantum Engineering and Manufacturing Company.
He realized, “The business model of manufacturing has been pretty much very old-school and stayed the same for hundreds of years. So, when Quantum comes in, we kind of changed the manufacturing way of Cambodia to the way the manufacturing world in general is being operated.”
The founder of Quantum said it is designed into a kitchen-style manufacturing center with a variety of machines enabling the team to carry out hardware and software electrical works in one place.
“So, manufacturing as a service business model is something that allows us to kind of build and manufacture small batches of products and at least scale up the production with our clients,” said Richard. This is what allowed his company in less than three years to develop into the largest custom machinery manufacturer in Cambodia.
When asked about challenges to meet shareholders’ expectations, Richard replied that first is performance and second is reporting. The Quantum president said, “There are three ways to grow. One is to grow the core product businesses. That may be to try to streamline at the same time growing the market, but if there's a slowdown in the core businesses, then we need to find a new energy of growth. So, it can be a new product expansion to another market.”
How Investors Decide to Invest in Start-ups
On choosing investors
Quantum raised investment from a family known to be tough on investment. But prior to this, he said he also met other investors.
“For me, the moment I was asked for 50 percent on the first round, I just walked out of the room. There’s no discussion to be made there.”
“We are so fortunate that we're not out bounding. We're not the one who's chasing the investor. So, when the investors come to us, they stand though we're going to put out this as the criteria that we're looking for investing.”
He noted about his process of selecting the investors, “This is the evaluation we’re happy with. This is the term that we're happy with. This is the time that you have for due diligence. If you're not happy with any of those you know, let's come back at another time to discuss.
“We're so fortunate that the person that we're working with in that family group was educated overall so he can understand some of this technology and so we came into agreement very quickly only after a few months.”
In his last message to the audience, Richard warned, “If there's any entrepreneur here, if there's somebody who asks you for 50 percent on your first round, just walk out the room, it's not worth it to talk that anymore.”