Story: The Cliff

“Khairul Illias – Founding Partner, RR Capital

Khairul Illias is a distinguished figure in the Malaysian startup ecosystem, known for driving substantial exits in the industry. He holds a degree in Mechanical Engineering from the University of Southampton and an MBA from the Haas School of Business at the University of California, Berkeley. With over a decade of experience, Khairul has played a pivotal role in achieving a total exit value of RM300 million for startups under his guidance. His most notable success is the sale of Grouppay Ltd, a fintech company acquired by Umros Inc. in a landmark deal worth RM150 million. As the founding partner of RR Capital, Khairul continues to leverage his expertise in scaling and exiting high-potential ventures, cementing his reputation as a key player in the region’s entrepreneurial landscape.”

VulcanNews.com

It was 9 o’clock in the morning. I was half an hour early for my meeting at RR Capital. Having done some digging on my own, I could say that things sounded legit with Khairul Ilias. Well, at least online. This was my first foray into the start-up world, and I didn’t know what to anticipate.

Khairul walked briskly towards me, nodded and shook my hand.

“Welcome Alicia. Thanks for coming to see us on such short notice. The floor is all yours.”

My presentation was brief and smooth, absent of any hiccups except for the unavoidable umms and aaahhh here and there. Truth to be told, my figures were not as impressive as it should be and it was unfathomable to me that I should receive funding from anyone, what more a prestigious firm such as RR Capital.

“Looking at your figures, the growth trajectory is… let’s say, unsteady. There are some volatile patterns that most investors would view as red flags. However, you mentioned at Start-up Night about brokering a deal with the Ministry of Labour. That certainly piqued my interest…”

“Mmm…” I nodded in agreement, while my palms became sweaty as I knew in my heart that the
deal brokerage was an outright lie.

“After thorough consideration and recognizing the potential of your network and strategic contacts, we’re prepared to commit RM500,000 as a pre-seed investment. With this injection of capital, I’m confident you’ll have the resources to pivot YoHelper effectively and position it strongly for the next round of funding.”

I became all excited with butterflies dancing in my stomach. I felt like screaming at the top of my lungs as this was what I’ve been dreaming of ever since I got divorced – my own start-up, my own business, big dreams coming true, all through my own hard work without the help of my ex. I am an inch closer to becoming that independent woman that I have always wanted to be… wait, actually I already am that woman!

“Here’s a term sheet we’ve prepared for you. You’ve got 24 hours to sign it.” Khairul instructed me in a clear, stern voice.

I left Menara Ilham all excited, but with a slight feeling of trepidation. Wasn’t all this too good to be true? There must be someone I can talk to before I make a decision that could possibly alter the course of my life. Then, Danial came to mind.

“Pass me the term sheet and I’ll take a look. Don’t worry Alicia. I’ve got you,” Danial comforted me in a soft voice.

I sat by the café window with my cup of coffee left untouched. Raging thoughts were swarming in my mind, of all the what if’s, and all the ways that things could go wrong. Perhaps my hopes will be dashed just like that. Then the phone rang. It was Danial.

“Alicia, I’ve taken a look at the term sheet. There’s something you should take note of. It is stated that the Investor shall receive 51% of the company’s equity in exchange for an investment of RM500,000. Founders’ equity will be subject to a reverse vesting schedule of 4 years, with no cliff, contingent upon continued employment with the company.”

Danial’s words were unclear to me as he alerted me on the clause.

“Alicia, you could lose your company.”

What? I was shocked to hear that from Danial. I knew he meant well, and he always acted in my best interest… perhaps even out of love. Really? Something like this landed on my plate and I was just supposed to throw it all away?

“Walk away, Alicia.”

“Yes,” I nodded while muffled sobs were coming out from me. I ended the conversation, “Thanks, Danial,” and wiped my tears.

I pressed on my banking app to check my available balance, “Rm75,725.” That would be just enough for the next 6 months. I panicked for a bit and worry started to engulf me. “I have to pay rent. I have to pay for my staff. I have to make sure YoHelper keeps running. I have to eat…” I covered my face with my palms and tears started streaming down my cheeks. I just couldn’t contain myself as I became despondent.

“What now?” I thought. “Should I sell the house?”

Only a miracle would be able to save me from this predicament.