SEVERAL months ago, I had the precious opportunity to enjoy breakfast with Michael Moritz (chairman of Sequoia Capital), Douglas Leone (global managing partner of Sequoia Capital), and Shailendra Singh (managing director of Sequoia Capital) in Singapore.
Not only was I blown away by their ability to drill down to the most important drivers of our business, but I was so impressed by their humility and kindness.
Michael and Doug are legends for having built Sequoia Capital into what is arguably Silicon Valley’s most successful venture capital firm in history. Their track record of investing in startups is truly extraordinary: Apple, YouTube, Google, Yahoo, Instagram, WhatsApp, Airbnb, Oracle, Linkedin, Cisco, and many other startups that went on to become famous companies.
At the end of breakfast, they told me that I was an authentic founder. I did not quite fully grasp the depth of their words. Amazingly, a few hours later, Sequoia Capital graciously offered to lead the next round with a US$100mil investment at a valuation in the billion dollar range. And the rest is history as they say. (Of course, they were already shareholders from the prior round, and had already completed months of due diligence on our key metrics, financials, and leadership team).
By their definition, an authentic founder is an entrepreneur whose calling in life is that particular business. Michael and Doug said that when an authentic founder leads a great business model with a huge market opportunity, the equity has the potential to compound at high rates naturally over long periods of time. It is such a simple, yet brilliant concept. I will forever be full of gratitude for Sequoia Capital’s wisdom and belief.
In my case, martial arts is what I love. And my martial arts is who I am. For as long as I can remember, martial arts has been my greatest passion in life. And I will be doing martial arts until my last day on earth.
Today, ONE Championship has raised over US$250mil. When people ask me for the secret to successful fundraising from the world’s most blue-chip institutional investors like Sequoia, Temasek and Greenoaks Capital, I tell them that it was a lot of good luck.
I am not being modest; it is the truth. Of course, there are many things you can do as an entrepreneur to maximise your odds of success in raising capital. However, it really does often come down to timing and luck.
On the good luck side, I am blessed with the greatest business partners in the world in Saurabh Mittal (ONE’s vice-chairman) and Hua Fung Teh (ONE’s group president). Bar none, Saurabh is the sharpest strategic thinker and greatest win-win dealmaker that I know in life. Hua Fung also ranks among the best business minds that I know.
Our banker Rippledot also played a critical role in the process. For me, Rippledot ranks among the world’s best investment banks such as Goldman Sachs and Morgan Stanley in terms of client focus and TMT market expertise.
Barring good luck, for anyone who wants to take “other people’s money”, a few key attributes are necessary. I have spoken about authenticity above.
There are other usual business metrics, such as having a good business model, a large economic moat and a clear vision, strategy, and execution plan.
Over and above that, character and the uniqueness of the product will vastly dictate how scalable and sticky a business will become.
I list some of the important values that has helped ONE raise US$250mil.
> Integrity: For me, integrity means doing the right thing even when no one is watching. Do your best to live in a way that would make your mom proud. Integrity is essential for success in life and it is no different for investors. Before these blue chip institutional investors invested in ONE, they did a massive amount of due diligence on my character, my values and my past. Of course, they looked into my achievements too, but integrity was first and foremost. Investors want to see that integrity permeates throughout an entire organisation. Trust is the foundation of every successful relationship in the world. It is no different here. Without a doubt, integrity is the most important value at ONE for everyone who works here.
> The PHD factor: If investors are going to invest in a startup, they want to know that their capital is in good hands. Experience and domain expertise are not the only key success factors. I look for the PHD factor too; I love working with people who are Poor, Hungry and Determined in spirit and attitude. Irrespective of one’s position in life, I believe that it is best to work with a PHD factor. To this day, I work, hustle, and fight as if my life were hanging in the balance. I don’t take anything for granted. Dreams are great, but nothing beats old-fashioned hard work. I need to see this rare PHD trait in a person before I make an offer.
> Outstanding product: I have spent thousands of hours on our product and I still work on our product as if it is day one. First and foremost, I am a product-driven founder. My team will tell you that our product is an obsession for me. I look at every detail maniacally. I study every athlete on our roster for his/her character, athletic ability, world championship potential, marketability and more. I look over every fight on every fight card before I give the final green light. I’m even obsessed about the order of fights on a fight card to ensure that our fans get the very best experience. I study every pixel on our global broadcast with the proverbial magnifying glass. I walk throughout the stadium on fight night looking for minute details that can be improved and/or where we have made mistakes. I still watch every video produced by our team.
The list of things that I do for our product is endless, but these examples are just some of the things that I do. In a word, our product is my obsession. It is not an accident that ONE has one of the best products of any global sports media giant today. My team and I are singularly obsessed with producing the greatest product in sports for our fans.
> Huge addressable market: Investors love a huge addressable market, but it must be realistically attainable. In our case, Asia has been the home of martial arts for the last 5,000 years. There are 4 billion people in Asia, and 2 billion of them are in the same time zone. ONE is a celebration of Asia’s greatest cultural treasure and its deep-rooted Asian values of integrity, humility, honour, respect, courage, discipline, and compassion.
Martial arts has been a part of our history, culture, values, and tradition in virtually every country in Asia. The biggest movie heroes of any genre are Jackie Chan, Bruce Lee, Jet Li, and Donny Yen – and they are all martial artists. There is no reason why Asia cannot produce its first multibillion dollar global sports media property in history; and ONE Championship is already on track to achieve it.
> Transparency: As an entrepreneur, I have learned that telling potential investors the good, bad, and ugly about my business is the best way to build trust. Every company has flaws. Every company has challenges. Every company has risks. Investors respect it when you walk them through the negatives and explain how you intend to overcome those negatives. So, when speaking to investors, my strong advice is to be open and transparent at all times. Of course, every fact and every figure must be 100% accurate and supported by data. Investors will do their own homework to verify everything, but my team and I always strive to be 100% open with all data and numbers.
In summary, it doesn’t take magic to raise capital. Anyone can do it. Just remember that integrity, hard work, and transparency will go a long way to maximizing your chances of success at capital-raising.
Chatri Sityodtong is the founder and group CEO of ONE Championship. He is a former New York-based hedge fund manager with over 30 years of martial arts experience as a student, fighter and coach. Chatri holds an MBA from Harvard Business School and a BA from Tufts University.