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Why this U.S.-Based Venture Capital Fund Has a Lower Acceptance Rate than Harvard

Yahsin Huang

Any startup founder would want to know the odds of getting funded before sinking time into a venture capital bid. The Venture Reality Fund of California will have you know its criteria are so strict that its acceptance rate is lower than that of Harvard University.

That’s the guidance from Tipatat Chennavasin, who spoke to Business Next this month on the sidelines of Computex Taipei 2018, Asia’s biggest tech hardware show.

Caption:Tipatat Chennavasin, co-founder and general partner of The Venture Reality Fund
Yahsin Huang

Chennavasin, co-founder and general partner of The Venture Reality Fund, said it’s important to understand not just how to make money, but also how to make a company grow.

“I feel like all the companies that I met in Asia, a lot of times, they haven't found a scalable software solution,” he said. “We don't want to invest in companies that are service studios, but we want to invest in companies that can create scalable solutions.”

Chennavasin, 40, is a Thai American with a background in product prototyping and user experiences. His 2-year-old Silicon Valley-based VC firm runs a $50 million fund that invests in early stage venture reality and augmented reality startups.

The Venture Reality Fund has completed 21 investments so far with an eye toward 10 to 15 more over the next two years, Chennavasin said.

No Taiwan VR investments

His virtual reality fund has not invested in a Taiwanese company yet, but Chennavasin has his eyes on Taiwan. “That's why I'm also here,” he said. “We want to meet Taiwanese startups (and) we want to talk to Taiwanese startups.

“We are trying to understand the ecosystem,” he added. “We feel that the Taiwan ecosystem is still emerging and there's a lot of opportunity here. But we are still trying to understand it.”

The Venture Reality Fund typically avoids investments in tech hardware firms, even though Taiwan has a “competitive advantage” in startups of this type, he added.

“One of the things about making hardware is (that it’s) hard,” he said. “It’s very expensive. It's also hard to competing against large companies. But I think understanding what your competitive advantage is and figuring out your market strategy, that’s the most important thing.”

Workplaces will drive VR’s expansion

Gaming and entertainment will not be the main drivers for mass adoption of virtual reality, the VC fund head told reporters at Computex. But the workplace might.

“I think the potential lies in what I call the future of work,” he said. “How can we make money by using VR and AR? I think we have to create content that actually enriches people's lives, if we could create a killer app that people would use every day.

“If it’s that much value that it would be silly not to use it, I think that's where we will succeed,” Chennavasin said.

“If I can say you will make ten thousand dollars more every year if you use VR, would you use it? Yes, right? So, try to find that value creation. Can VR and AR be that valuable in your life? Or, can I make more money with VR?”

Chennavasin suggested that VR and AR startups look for ways to use their technology in enterprise training and location-based entertainment.