Sunday, September 2, 2012

Angel investor, daredevil approach

Straits Times: Sun, Sep 02

Norwegian William Klippgen came to Singapore in 2003 to do a master's degree in business administration and hasn't left.

Armed with a huge risk appetite, he went on to found Tigris Capital, where he is managing director. He has been investing in local tech start-ups.

His high risk approach to professional investing explains why he keeps to properties, corporate bonds and blue-chips when it comes to his own investments.

Mr Klippgen, 43, developed an interest in becoming an angel investor after he co-founded, a popular European price comparison service that Yahoo bought in 2004.

"I thought it looked so amazing to be like the venture capitalists that came to our board meetings," he said. "I thought they never had to stay up late and do so much hard work, but could just enjoy the fun of spending time with multiple, innovative businesses."

As an entrepreneur, he had nearly gone bankrupt twice so he was ready for a change. "It's tough to be an entrepreneur so I thought that being an investor is a lot easier, but I've realised that it involves a lot of hard work and many painful processes."

He has pulled out of some start-ups and at least three of the companies he has invested in have gone bankrupt.

"It's so incredibly risky as 99 out of 100 tech start-ups fail. This is why you can make returns of 50 to 100 times when a company does really well."

Mr Klippgen typically invests between $50,000 and a few hundred thousand dollars each time and has made anywhere from three to 50 times his money on the three start-ups he has sold so far.

From experience, he now places more importance on the person running the business than the business idea.

He said the firms he had invested in that have gone bust had been badly managed.

"It's not because the product is not innovative or that the market is not ready. It's always the people who lack the ability to execute the plan. They are not flexible enough.

"If you have a business that you always want to be in full control of, you won't be aggressive enough pursuing the various growth opportunities coming your way, and you won't hire smarter people because you feel threatened."

But overall, it's been a satisfying journey: "If you look at the 15 companies I've invested in, I have probably created 400-500 jobs here."

Mr Klippgen, a Singapore permanent resident since 2004, has a Master of Science from the Norwegian Institute of Science and Technology as well as from Boston University, and an MBA from Insead.

He and his ex-wife take turns to care for their three children -Maria, seven, Julia, nine and Victor, 11 - in Norway, which is why he flies to Oslo every month.

Q: Are you a spender or saver?

I would say I used to be a spender but got wiser, and figured out that I need to save more of what I have now and not rely on what I might get in the future.

I think you should spend only on what you really need to be happy, and save the rest across a range of asset classes.

Make it a virtue to not spend. It's important to figure out what you need, to choose to not spend on yourself and to prioritise your spending.

I do not really have a monthly income, but in general, I tend to invest and save far more than I spend.

Q: How much do you charge to your credit cards every month?

I used to charge a lot, but these days, I don't charge more than $10,000. There is really not that much I want to buy or do that costs a lot of money.

Q: What financial planning have you done for yourself?

My business is very high-risk investing.

So I have tried to counter that with sound property investments in Norway and a mix of corporate bonds and blue-chip stocks in sectors that I believe will do well in any market conditions.

I invest a little bit in the stock market here. I've made some and I've lost some.

I like to invest in things that I know very well and I've found that to do well, you have to monitor the market 24 hours a day.

So, I take a long-term view. I invest in energy stocks, in business social media such as LinkedIn and raw material resources. And I don't touch them for the next five years.

The thing is every entrepreneur is comfortable with risks, enormous risks.

The danger is when you sell your investments, you continue to be in the risk mode. So what I do is to continue investing in start-ups for work. But I am also thinking of becoming an entrepreneur again.

I like properties because unlike start-ups, they do not talk to me. There is no stress and I can do more snowboarding in the meantime. The properties also give me passive income and capital yield.

What bothers me here in Singapore is that there are so many advertisements here on how to get rich through investments like forex trading. It is more or less impossible to make any profit over time with such trading.

There should be better consumer protection.

There's a fine line between investing and gambling. I can go to the banks and get sold a lot of financial poducts that have gambling-like elements.

Q: Moneywise, what were your growing-up years like?

My mother was a university professor and my father ran his own import business.

The main lesson he taught me was that running a business basically meant you can go bankrupt at any time.

I lived with my mother, sister and grandmother as my parents are divorced.

I guess I learnt how to live very cheaply. My mother stopped working to take care of us when we were growing up, and I spent many holidays home in our garden or inside the house playing cards.

I was also allowed to set up a small shop selling flower seeds. My parents built me a small shophouse and I created the packaging. That taught me a lot about running a small business and that it can actually be profitable.

Q: How did you get interested in investing?

I first invested in some Norwegian shipping shares, which my father helped me buy. I sold them with a profit when I was around 14.

I had read about the company in the newspaper and my father knew the owner.

Q: What properties do you own?

I own three properties in Norway as my children live there. I have a 2,200 sq ft house, a 1,000 sq ft apartment and a super nice 900 sq ft cottage in Beitostølen, in the mountains.

Q: What's the most extravagant thing you have bought?

Without doubt, it's the Lamborghini Gallardo Spyder... nothing beats that. It was a second-hand car, but it still cost me around $850,000.

I have no regrets though. Everyone deserves to own a Lamborghini once in their life, in particular, when you are about to cross the 40-year-old mark.

I bought it in 2007 and sold it after a few years for $750,000.

Q: What's your retirement plan?

I became financially independent at 35 and plan to stay that way.

I actually love what I do and I get a kick out of working with multiple companies and meeting so many smart people every week.

I think I will never want to do a normal job again if I can avoid it, but I also can't see myself retiring fully.

Q: Home is now....

In Singapore, where I rent a condominium unit in the east, and in Norway.

Q: I drive....

A black Volvo XC60 but I am waiting for my all-electric Nissan LEAF in Singapore and the new all-electric Tesla Model S in Norway. Petrol and diesel are so 2010 and something I am trying to quit.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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