Newsletter #22: Breaking up is hard to do; Graft galore in Indonesia

Tough times, tough talk

Jul 20, 2025

Breaking up is hard to do 😥

There’s plenty of romance around co-founders starting a company and building together. The longstanding piece of advice is to approach co-founder selection (and board directors for that matter) like you’re picking a life partner or spouse. But what happens when you pick wrongly? You break up, obviously.

Before you know it, things get messy, especially when you involve the rest of the family AKA your board, your investors, local startup community, everyone else on your Linkedin network (!!!) which was exactly what happened…with Vietnam’s Alterno.

There are two things which make this story significant in Southeast Asia:

It involves intellectual property (IP) in a market where IP-backed startups are pretty rare
It involves institutional investors like Touchstone, Radical Fund and ADB Ventures. These aren’t fly-by-night investors/angels which tend to crowd the Vietnamese scene.

Surely it’s not in the interest of investors when spectacular blowups like these happen. But if the stakes were high enough, perhaps one might expect investors to step in to broker an agreement or help reach a quiet, peaceful resolution. That doesn’t seem to have happened here.

It’s possible to nip such situations in the bud by finetuning founder termsheets, suggests Play Ventures’s Phylicia Koh.

According to the Singapore-based gaming VC, 15% of founder breakups happen after Year 1. In Year 2, runways shorten, traction comes under pressure, the team comes under fire too…

She suggests a 2 year cliff (assuming it’s in addition to the standard 3-4 year vesting schedule). 1 year for showing up, 1 year for staying committed through the hardest phase of building.

It’s interesting in concept, but how well will something like this go when executed?

The responses I got were pretty mixed.

Most founders didn’t favour it, some much more strongly than others. Investors on the other hand liked the idea, but expected that it would see pushback from founders.

The bottomline: investor-founder dynamics still come down to relationship and trust.

“As a VC you must earn the brand and right to make this ask. If you are respected, the founders will respect it. Otherwise some founders will balk and walk away,” said one Singapore-based fintech VC.

If founders were approached in good faith, you wouldn’t need to resort to termsheet mechanics to prevent such founder breakups, argued another US investor.

There is also the separate question around the success rate of startup incubators like Antler, Accelerating Asia and Entrepreneur First.

These global platforms boast a robust investor network, “founder-friendly” terms, frameworks, mentors, and an entire business built around “founder matching”. That sounds great but how many of these have actually lead to founder matches…for life?

The Alterno fallout may be a single data point for Antler, but anecdotally speaking, the majority of these ventures typically don’t survive.

I’m sure these must have been factored into their calculations, but one wonders if the 100s and 1000s of founders who enrol each year ever anticipate such scenarios happening to them, only to discover themselves on the sacrificial altar of someone else’s agenda…

Graft scandals galore in Indonesia 😱

The corporate scandals in Indonesia just don’t seem to let up…

This time it involves Indonesia’s e-commerce and ride-hailing giant GoTo, regarding an alleged corruption case involving the procurement of around $600 million worth of Chromebook laptops between 2019-2022.

GoTo’s South Jakarta office was raided this week, with former CEO and co-founders Andre Soelistyo and Nadiem Makarim called into Indonesia’s Attorney General’s Office (AGO) for questioning.

The crackdown has been escalating for some time now. In May, several key figures from GoTo’s board of commissioners and board of directors resigned ahead of its AGM.

Market observers are reading this as a politically-motivated crackdown on Nadiem Makarim, who recently served as Indonesia’s education minister having possibly made “too many enemies” in power, as sources tell me.

Makarim, a highly charismatic Harvard graduate son of wealthy Indonesian parents, eventually went on to make good success and money at Lazada and GoTo — ironically wouldn’t need to resort to such methods for the extra cash, pointed out one Indonesian investor.

But such is the game of politics.

Elsewhere in Indonesia — in what looks like a carbon copy of the now infamous eFishery playbook, agri-focused P2P lender CROWDE was exposed for funneling $50 million worth of fake loans through a network of fake agri suppliers with fake invoices.

What next, Indonesia?