Several years ago at this very table in the Starbucks at Capital Towers, I met with an investor to debrief him with some feedback after helping his company in its search for new capital.

It was the same year that Joseph Schooling won Singapore’s first-ever gold medal in swimming at the Olympics. The gold wasn't only a victory in the local sports scene but also a symbolic inspiration to everyone that, dreams, no matter how small they were, could come true.

It was on that day at Starbucks that my investor took this spirit with him into the fundraising process. We had just gone on a two week roadshow and had met with eleven fairly prominent investors in the local startup scene.

Every session we went to had been a productive dialogue with both sides making the introductions and talking about the story, the pedigree of the founders, the company, technology, market, opportunity, etc. But unfortunately none of them said ‘yes’ to funding this 'dream'.

“Why did Joseph Schooling win?”

He asked me in a fairly stern sounding voice. Erm...because he trained hard?

"No!! It was because he believed in himself!" alluding that we did not believe in the business enough to sell the story effectively.

He continued rambling about how Schooling, a young boy born and bred in Singapore, became a global champion, all the while drawing parallels to his company - A champion in the making.

He added:

“It is a no brainer. People should be lining up for this! Why aren’t investors buying our business?”

He continued to raise his voice and at one point even slammed the table. I just stood there, wide-eyed and speechless.

The company put together a product demo on my suggestion a couple of weeks later as part of a follow-up from our roadshows. We had sent invitation memos to the folks that had we had met and informed them about the proposed two-hour session to be held in the company’s office at Telok Ayer.

I thought it was a good idea. An opportunity to see first-hand how the product worked in real life. More importantly, a second chance for the company to prove itself and make a tangible impression after that first meeting.

Of the 10 emails that we sent out, only two replied and eventually one showed up, largely because his office was located around the vicinity. Nevertheless I looked forward to it (also my first time watching the demo) and we went ahead.

But the outcome was un-impressive to say the least.

The demo did not go as smoothly as expected. There were technical issues and people ended up waiting while the engineers troubleshoot the problem. Long story short it all went as if the company was selling an over-priced archaic software that was full of bugs. Fortunately (or unfortunately) we had only one investor on scene to watch.

We stopped the roadshows after that.

I learned a few things that day.

• You can't put lipstick on a pig. A commercially viable product is at the heart of any start up. No company should go out there to raise institutional capital without being able to produce either (i) a working prototype or (ii) demonstrate that there are customers lining up to buy.

  
  

• Self-bias is a very real. What I saw in the founders was a blind and almost religious belief in their product. To the extent they weren't open to candid feedback. Having devoted almost all their time into the product, it's easier for founders to be oblivious to the shortcomings of their own business.

  
  

• A CEO (who is a non-founder) employed to raise capital for a startup is almost doomed to fail. There is no skin in the game. A founder that throws money to delegate a CEO for fundraising can be a huge red flag and a potential recipe for disaster.