Chain Venturer: Qin En Looi of Saison Capital

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Happy Weekend 🙋🏻‍♂️,

Welcome to Chain Venturer, a series of intriguing conversations with crypto investors. For this week’s issue, we have Qin En Looi from Saison Capital.

Qin En is a Partner at Saison Capital, the venture capital subsidiary of Credit Saison, specializing in investments from Pre-Seed to Series B stages worldwide, with a primary focus on Southeast Asia and India.

Since 2021, Saison has been deeply involved with web3, and they’re not slowing down.

If you would like to participate in a future episode, DM me here.

-Marco

I don’t have many commentaries to share this week, but we want to use this opportunity to ask our readers if you folks have any wishlist of crypto databases.

For example:

• A database of crypto journalists, where they work, area they cover, etc.

• A database of VC individuals.

• A database of the governing council members of different L2 protocols.

Reply to this email and we might just build it for free, cheers!

Anyway, enjoy this week’s conversation.

He’s too good at this.

Qin En Looi, Partner at Saison Capital

Qin En Looi is a partner at Saison Capital, the venture capital subsidiary of Credit Saison, specializing in investments from Pre-Seed to Series B stages worldwide, with a primary focus on Southeast Asia and India. Their diverse portfolio encompasses a range of sectors, including fintech, e-commerce, and web3.

Qin En earned his degree in management science and engineering from Stanford University in 2019. Between 2008 and 2012, he was a prominent researcher at the Institute for Infocomm Research. During his tenure, he authored 11 out of 13 published research papers and showcased 4 human-computer interaction projects at internationally recognized conferences and journals.

In 2013, he co-founded Glints, Southeast Asia’s largest talent platform for career development and recruitment. He also served as Glints’s COO from 2013 to 2017.

In 2019, Qin En joined BCG Digital Ventures as a Venture Architect, spearheading pre-seed ventures in sustainability, agtech, and FMCG. During his tenure, he also initiated a comprehensive sales program for one of Southeast Asia's premier banks, enhancing performance, culture, and internal communication strategies.

In 2021, he became a principal at Saison Capital, and by June 2023, he had risen to the position of partner.

Here’s my conversation with Qin En Looi.

Quick takeaways:

• Qin En advocates for a balanced investment approach that appreciates both tokens and traditional equity.

• People conflate token prices and market prices with the actual development of the technology.

• Founders should understand that the primary role of investors is to provide capital. Beyond that, engage them in areas where they can genuinely offer value.

• If a crypto project isn't succeeding, Qin En believes it may be necessary to return the capital to investors if no compelling pivot strategy exists.

• For many emerging markets (EMs), the appeal of crypto is not just about immediate financial rewards but also the aspiration for economic freedom and change.

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What was the defining moment that drew you into the world of crypto?

Qin En first became aware of cryptocurrency during its 2017 bull market, but his real fascination ignited two years later. He was captivated by the potential of NFTs—not just as instruments for trade and speculation, but as repositories for culture and art.

What also impressed him was how NFTs fostered communities; it wasn’t merely about trading but about the genuine engagement and passion of the participants. Moreover, he found the idea of creators earning continuous royalties via smart contracts, particularly in the NFT sector, to be quite enticing. This is what drove him to delve deeper into the universe of Web3.

What is Saison Capital?

Founded in 2019 by its parent organization, Credit Saison, Saison Capital is an agile early-stage venture capital entity, standing out as possibly the fastest among Japanese corporate VCs.

Unique to Saison Capital is its focus on a financial-only mandate, discarding the need for strategic alignments and thereby affording it the latitude to chase primarily financial gains.

Initially, the firm centered its efforts on early-stage Fintech and B2B investments, but since Qin En's arrival in 2021, there has been a decisive pivot towards Web3-oriented investments.

What sectors and types of projects is Saison Capital focusing on at the moment?

Saison Capital currently sets its sights on the intersection between financial services and Web3.

This manifests mainly in two sectors: DeFi, due to its innovative approach to traditional financial mechanisms like lending and borrowing, and real-world assets (RWAs), where the firm, including Qin En, sees the potential to enhance yields by directing on-chain capital towards RWAs.

As someone who transitioned from being a founder to an investor, what insights can you share about selecting the right investors?

Through his journey, Qin En has gathered unique perspectives. He notices a common emphasis among founders on the quest for "strategic investors" or "strategic capital." Qin En argues that this focus can sometimes be a diversion.

The main role of an investor is to provide capital; any extra perks are to be seen as bonuses rather than expectations. He recommends that founders should identify the precise areas where an investor could provide real value.

For example, Qin En recently invested in Helix, a company bridging crypto liquidity to the private credit sector in Southeast Asia. Helix’s team boasts decades of experience, making it redundant for Qin En to offer advice in that area. However, he does provide valuable insights into the fundraising landscape, an arena he is intimately familiar with.

Moreover, Qin En believes another crucial dimension where investors can add substantial value is talent acquisition. Often early-stage startups suffer from a lack of broad recognition, which can make recruiting a challenge. In such cases, the reputation of a well-regarded investor can offer the necessary credibility.

In essence, Qin En's advice to crypto founders is clear: Understand that the primary role of investors is to provide capital. Beyond that, engage them in areas where they can genuinely offer value.

Can you share your views on the prevailing project funding structure in crypto?

Qin En observes that the current dynamics of the crypto markets seem to favor short-term trades over long-term holding. Most people opt to sell new tokens almost immediately, resulting in only a few projects retaining their value over an extended period.

This trend could potentially damage mainline projects, but there is room for optimism. Alternative methods, like Copra Finance, help projects with bond issuance instead of straightforward token releases, which might foster longer-term benefits.

Do you think value can coalesce around both tokens and equities if the constituents are different?

Qin En, along with his team at Saison Capital, have always been proponents of a balanced investment strategy. They acknowledge the enduring, long-term value inherent in equities. Tokens, although attractive for their liquidity and potential for quick returns, have yet to establish themselves as a stable store of value.

Take, for example, the 2022 Otherside mint by Yuga Labs, which saw an astonishing $70 million in NFT sales. In traditional financial terms, such a milestone would be comparable to a company announcing robust quarterly earnings. Yet, the aftermath was bewildering. Despite this considerable success, ApeCoin, which is closely associated with the project, experienced a 50% drop in value.

These instances serve as cautionary tales for Qin En, illustrating the token markets' volatility and unpredictability. While tokens can indeed provide immediate liquidity and upside, the bulk of stability and long-term value assurance still lies with equities. In Qin En's view, recognizing and valuing each asset type -whether it be token or equity- for its unique strengths is crucial for sustained success in the ever-changing landscape of crypto investments.

Are you bullish on crypto in Southeast Asia, and which sectors do you think will see the most growth?

Qin En believes that for crypto to truly soar in the region, collaboration with regulators is essential. Currently, there's a lack of clear direction in many countries, posing challenges, especially for stablecoin projects.

In places outside of Singapore, where clarity is a tad more evident, smaller stablecoins often go unnoticed. But, when they grow in size, they begin to influence a country's monetary policy, which can't be taken lightly.

Regulatory bottlenecks also persist, with the main challenge being the attainment of a broader outcome without clear regulatory guidance. But there's another side to the coin. In the past two years, games like Axie Infinity have highlighted the region's potential, boasting their largest player base from Southeast Asia. However, the most significant use cases might not even be in gaming but rather in the gambling facet of crypto.

Many individuals in the region, making modest incomes, view crypto as a chance to break out of their economic constraints. And while there are inherent risks, the allure of potential high rewards drives many to explore the speculative nature of crypto.

For most, the excitement of crypto isn't just about financial gains; it's also about the dreams and aspirations it represents. Whether buying a fungible or non-fungible token, the underlying sentiment remains: where might this venture lead? With the region's innate inclination towards the thrill of speculation, Qin Enl believes that this sentiment won't fade anytime soon.

How should crypto founders navigate the current funding landscape?

According to Qin En, capital allocation is critical in today's challenging crypto environment. Founders vary in their spending habits—some burn through capital rapidly, while others adopt a more conservative approach. Companies like Indonesia's Mythic Protocol serve as good examples; they spend cautiously despite their large size, indicating prudent future planning.

Saison Capital typically starts with a modest investment to assess a founder's capabilities. If the company shows promise, they are open to additional investment.

Sometimes, however, if a venture doesn’t pan out, it's wiser to return the capital if there's no feasible pivot. The key takeaway for founders is prudent financial management.

Crypto is such a crazy fast industry, it can be super tiring. What are your personal tips for maintaining the work-life balance?

In his early crypto career, Qin En found himself constantly checking Twitter and Discord, anxious about missing out. Over time, he learned the importance of discipline in managing both time and energy.

Qin En realized it's not possible to always buy at the lowest or sell at the highest. Sometimes you might think, "I should have sold earlier" or "I could have bought later," but it's essential to move past such thoughts.

Realizing that it's impossible to always time the market perfectly helped him focus on other valuable aspects of life, like podcasting and spending time with family. The shift from chasing quick profits to adopting a more balanced approach made a significant difference in Qin En's relationship with crypto.

Rapid Fire Questions

1. What’s one book that any aspiring investment professional should read?

   • Influence: Science and Practice - Robert Cialdini

2. What’s your biggest investment mistake?

   • Didn’t take enough profits at the peak of the bull market in 2021.

3. What’s the most underrated use case of crypto?

   • Increasing the movements of money.

4. What’s your most contrarian view in crypto right now?

   • It's easier to return capital when you have a smaller amount to deploy as compared to a larger fund.

5. What’s the biggest risk that the crypto space is facing?

   • People conflate token prices and market prices with the actual development of the technology.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.