Ethos Fund: Simon Shin

In the ever-evolving landscape of venture capital, where innovation and societal impact converge, Ethos Fund stands out. At the helm is Simon Shin, Co-Managing Partner, whose commitment to driving change has shaped how the firm invests. In this interview we look at Simon’s journey, his motivations, and the ethos that drives the fund.

What inspired you to launch Ethos Fund, and what gap in the market did you aim to fill?

David and I have spent most of our lives in close proximity to entrepreneurs and operators. Our desire was to contribute significantly to the startup ecosystem, drawing from our extensive experience in building and operating companies. Establishing a venture capital firm, Ethos Fund, emerged as the most effective means to achieve that goal.

The name “Ethos” underscores our core mission: to influence the world positively. Both of us are parents to young children, and that reframed our perspective. Our motivation centres on supporting companies that strive to make the world a better place for future generations.

That gap materialises in our commitment to investing in Vietnam and the United States. Vietnam, from a macro perspective, stands out as a rapidly growing country: an emerging market with a youthful population and highly skilled human capital. As Asian Americans, we identified a distinctive perspective we could bring to Vietnam and to the US, where Vietnam has been underrepresented on the American investment landscape.

How does your operational startup experience influence your approach as a VC?

Our operational backgrounds play a substantial role. Our firsthand experience as founders and operators lets us empathise with the challenges entrepreneurs face. We understand what they are going through and can provide invaluable support.

David and I each bring distinct skill sets. My career has primarily revolved around product management and design, which gives me concrete skills in product development and an acute understanding of the details that go into creating a successful product.

David possesses extensive expertise in business development and partnerships. His network and experience extend globally, particularly in education. That network is immensely valuable to founders in our portfolio, especially where companies are highly sales-driven. From relationship building to sales strategies and team management, our operational experience equips us to guide and mentor comprehensively.

What strategies did you employ for fundraising, and what advice would you offer first-time VCs managing LP relationships?

Our fundraising strategy for Ethos Fund was characterised by a precise focus on specific types of limited partners. We targeted family offices, high-net-worth individuals and strategic corporations. We had limited time and resources, so we aimed to maximise ROI by directing our efforts toward LPs who closely aligned with our vision.

We did engage with institutional LPs such as fund-of-funds and endowments along the way, but our primary objective early on was to build relationships without an immediate expectation of their participation in Fund I. At the outset we leveraged our closest networks: people we had worked with, people who had previously invested in us and achieved successful outcomes, and people who had wanted to invest but lacked the opportunity. Those connections were the foundation.

We also specifically sought out individuals who shared our interest in fostering stronger ties between the US and Vietnam, which led to the inclusion of notable Vietnamese and Vietnamese American partners as LPs.

Is there a particular achievement or project at Ethos that you are especially proud of?

Saigon Fest, an event we organised in February of this year. It brought together our LPs, potential LPs, and the burgeoning startup community in Vietnam. Despite the tight preparation window, it was a resounding success. The event created numerous valuable relationships and friendships, left a mark on the startup ecosystem in Vietnam, and gave visitors insight into how vibrant the local scene is.

What culture are you aiming to cultivate at Ethos, and how do you think about process and governance?

As Ethos progresses, our focus is on systematically organising our operations and internal tools to enhance efficiency and transparency. We aspire to nurture a culture of open communication, knowledge sharing, and unwavering transparency within our geographically dispersed team.

In the information age, where access to knowledge is widespread, a culture that promotes open discussion is indispensable. We want partners, associates and interns alike to feel encouraged to express their thoughts and advocate for their positions.

Can you explain your due diligence process and the qualities you look for in founders?

Our due diligence is multifaceted: informal and formal. Formally, we review a checklist of documents to make sure the company is set up correctly and to look at legal and financial materials. Informally, we endeavour to understand the origin story of the founders: why they are pursuing this venture, and whether their previous experience and skill sets align with what they are building now. A compelling and coherent narrative is crucial.

We also assess the founders’ ability to attract top talent, which is indicative of their skill in understanding people and what motivates them. And we scrutinise execution. More important than whether they have built a good product is the speed at which they executed and secured their initial customers. Swift execution is a paramount criterion.

To further evaluate founders, we often assign relevant missions that align with their business challenges, so we can gauge how they solve problems.

Are there any red flags you watch for during due diligence?

A critical aspect is the cap table. Looking at the cap table tells you a story. It reveals the startup’s fundraising history, the dynamics between founders, and potential issues that may arise. A notable red flag can be a significant ownership stake held by inactive founders or people who have left the team.

As an early-stage VC, how do you handle failed investments?

Each portfolio company under Ethos is an integral part of our Ethos family. We care deeply about the success of every venture. When companies are struggling, from an investor perspective there is of course some concern. But more importantly, our primary focus is on empathising with the founders and collaboratively finding solutions.

The stress is not so much about the potential loss of the investment as it is a desire to problem-solve and support our companies throughout their journey. At the end of the day, our attitude is that as long as the founder gave it their all, we can accept it. We do our best for our portfolio companies until the very end.

In the vast majority of venture portfolios there will be winners and companies that don’t survive or become financially successful. If you spend enough time with the founders, it’s clear who truly gave it their all. Even if it didn’t work out this time, we believe they may be onto something in their next endeavours.

If you could talk to your younger self, what advice would you give?

I would definitely say buy more bitcoin. Laughs. Professionally, the most important thing is relationships. I would have been more intentional about the relationships I fostered. I was a little more passive. I’ve been blessed with meeting a lot of smart, successful people throughout my career, but if I had been more proactive I would have more aggressively sought out mentors. Having a really good one early on is so helpful.