Due Diligence is First Step to Get VC Funding: S Khugan 
| Onkareshwar Pandey - Editor in Chief - CEO, IOP - 04 Jan 2021

YOUR JOURNEY FROM POTENTIALS TO PROFITS

Exclusive Interview with Mr. S. Khugan, the founder and Group Managing Director, as well as Ms. Pael Ghosh, the Group Executive Director and Creative head of the SKB Group based at Kuala Lumpur, Malaysia by Onkareshwar Pandey

“In the post Covid-19 era, what people need to understand is the mind set of investors, especially in this market. Funding is NOT going to be easy. Investors have become ten times more cautious than they were before. Because now, it’s not only about the ROI, it’s also about how safe their investment is going to be. They need a complete assessment of the said company to be done, before they are even willing to consider funding. That is why a business today looking for any sort of funding has to ensure, that the approach they take to convince investors is the correct one,” says S. Khugan, a global investment consultant based at Kuala Lumpur, Malaysia.

“Each year, in the United States itself a minimum of 2 billion dollars are paid to management consultants for their services. A large amount of this is said to be paid for the collection of impractical data and poorly implemented recommendations. When it comes to the Asian market, especially the Asia Pacific, the term ‘Consultant’ has been prostituted to encompass every job designation. Thus, you end up buying your favourite perfume from the ‘Beauty Consultant, while, the 19 year-old boy who comes to fix your home PC in your ‘IT Consultant’. In spite of that, all serious companies worth its salt opt to appoint a reputable consulting firm to guide them through the twists and turns of the corporate world,” says Pael Ghosh, the Group Executive Director, SKB Group of companies founded by S. Khugan.

Onkareshwar Pandey had the opportunity of chat with both Mr. S. Khugan, the founder and the Group Managing Director, as well as Ms. Pael Ghosh, the Group Executive Director and the Creative head of the SKB Group a very stable and no-nonsense consulting and investment firm for the past almost two decades. Below are the excerpts of an interview conducted over zoom - the post covid world’s conference room.

Q. My first question would be to Ms. Pael.What does SKB do in a nutshell?

Pael: At SKB, we are primarily Corporate and Management consultants. But of course, keeping in mind that we work mostly within Asia, we work with a more hands on approach, rather than just advising clients. Apart from that, we also invest into promising companies and help them with corporate funding.

Q.  How exactly does the mechanism of investment as well as consultancy work together? I mean, can you help the readers understand what the exact services that you provide to a client are.

Pael:  Well…. ( Looking very thoughtful) it’s quite difficult to put the entire mechanism of our work into a very short interview. Especially now, that the world is going through such an upheaval due to the pandemic. But I will try to give a simple picture.

You see, when clients come to us, they come with all kinds of complications. It can range from shortage of working capital, operational mismanagement, no marketing and promotional direction, problems with negotiations, problem with loan repayments etc. And these are just the tip of the iceberg. Because every company, and every industry, has its own challenges and there is no ready-made template that we can use to solve their predicaments.We in fact had to change quite a bit of our modules and investment strategies to take into account the challenges that businesses are going through right now due to the pandemic.

Right now, the important thing is, to take stock of every business and their current operational strategies. To understand what does its future holds for that particular business and industry. We start by looking into everything that’s in place and more so what is not. Starting from operations to accounts to marketing. And only through an initial diligence we get to the root of the problems. In our experience, even when everything looks bleak and dark, our primary job is to always a solution.

Q. My next question is to you Sir. What are the steps SKB is taking to help companies in the Post Covid Era?

Khugan: You see as Pael has explained earlier, businesses right now have to think in ways that they have never had to earlier. With the pandemic, the world has simply been thrown off track completely. And it is not just about getting back on track, it is about constructing a new track. At SKB we understand that particular challenge. Many companies are now looking for funding. However, they are not going forward in arational manner, as desperation has overtaken their rational thought. And in their desperation, they are falling prey to a lot of brokers and con men out in the market promising quick and easy funding against a deposits or upfront exorbitant fees.

What people need to understand is the mind set of investors, especially in this market. Funding is NOT going to be easy. Investors have become ten times more cautious than they were before. Because now, it’s not only about the ROI. It’s also about how safe their investment is going to be. They need a complete assessment of the said company to be done, before they are even willing to consider funding.

That is why a business today looking for any sort of funding has to ensure, that the approach they take to convince investors is the correct one. 

Q. What would you suggest to business owners who are looking for investors or any kind of funding?

Khugan: You see; the first thing is to make sure that you have done a proper due diligence of your own company. It’s not just enough to say how good your company is? You will have to be honestand forthcoming about every aspect of your business. The best would be to have an external agency perform a due diligence for your company. In fact Post covid, you will be surprised at the number of due diligences we have had to do. Although most have been companies with a turn- over of more than 15-20 million USD, however, we have streamlinedand doing something similar along the lines for the SME’s as well, as they need it a lot more in this challenging market.

Having a due diligence done for the business is the first step that shows VC’s and funders that you are serious about your company and that it’s run professionally. Having an international firm like SKB compile the analysis shows that you understand the importance of the diligence and its innate value to your funding search.

Q. What would the SKB Due Diligence comprise in a Nutshell?

Khugan: Before I say that, I want to once again reiterate that, whenever we are presenting a diligence report to investors, the key is to ensure that we give an honest picture from the very first moment. No matter what we try to keep hidden, about the disadvantages of a company, it will eventually come to light, as first rule in Investment – Always understand the Investor is Not Stupid. If business owners are straight forward from the beginning, it creates a sense of assurance and trust in the mind of the investors, and the deal then moves forward. If they feel they are smarter than the Investor and are not forthcoming that’s when deals fall apart. Believe me we have seen so many like this.

Anyway, to answer your question, the SKB Due Diligence will basically give the funders the true picture of the Company’s financials, operations as well as the growth potentials. This will help the investors understand the fundamentals of the company, and help make swift decisions.

Q. Previously Ms. Pael, you had mentioned to me about the Pocket Consultancy Series. Can you tell us a little more about it?

Pael: You can say that the Pocket Consultancy Series is our way of guiding companies, business owners or working adults, to adjust or even to combat the financial situations that has been created as the result of this pandemic.

During the lockdown period, and even now, we have been receiving an overwhelming number of enquiries, and questions from people who have been caught unaware with whole covid situation.

So we have been selecting the most pertinent ones, or ones that are applicable to the larger demography, and have answered those questions. We are selecting different questions from around the world, and attempting to provide workable solutions to everybody, so that they wouldn’t have to hire a consultant in a market that has left most of the people strapped.

The Pocket Consultancy series will also be out as a book very soon, and we hope it would become a manual for business owners to use, and to understand the global market right now, in order to make the correct decisions, to take their business further and to make a profit.

Q. Mr. Khugan, Ms.Pael, thank you so much for your time. It has been a very insightful interview. If anyone wants to get in touch with SKB, how should they do it?

Khugan: You can either email us: ask@skbassociate.com or whatsapp us @ +60169460208 


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(Onkareshwar Pandey is Founder, Editor in Chief & CEO, Indian Observer Post and former Senior Group Editor- Rashtriya Sahara (Hindi & Urdu) and also former Editor, (News), ANI. http://bit.ly/2mh7hih Email - SMS- 9910150119)


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