1. The power law mistake many of us are importing into SEA
Outside Silicon Valley, founders and investors are still borrowing mental models that were never designed for their ecosystems.
Power-law thinking is one of those models. In theory, it’s simple: a small number of outliers drive most of the fund’s returns. In practice, in Southeast Asia, the way many people apply it quietly breaks both fund construction and founder expectations.
In this episode of Emerging Forward, I sat down with Kevin Brockland, CFA, Founder & Managing Partner of Indelible Ventures, a seed-stage fund focused on Southeast Asia’s B2B ecosystem, to unpack what power-law investing actually looks like at SEA scale not on a Sand Hill Road slide.
“Power law exists here too. But it’s relative to the size and stage of the ecosystem – and we need to stop pretending it will look like the US.”
This piece is my attempt to translate that conversation into a concrete playbook for LPs, emerging managers, and founders across SEA, Europe, and other emerging markets who are trying to navigate the same tension.
2. A nascent ecosystem with uneven gravity
Kevin’s starting point is blunt: Southeast Asia is still a relatively nascent ecosystem, going through a long funding winter with sharp country-level differences.
Singapore remains the capital of the region, the place where capital pools, funds domicile, and many regional strategies are formally anchored. Malaysia, where Kevin lives, has the ingredients to become a “Singapore V2”: strong quality of life, natural resources, and an increasingly serious tech base, but a capital stack that is still heavily government-driven at the early stages.
Thailand is dominated by corporate venture capital, with scattered angel networks and very little independent VC capital at the seed/early stages. The Philippines, in his words, behaves more like a family-office system than a classic CVC ecosystem; the same families that control the major corporates effectively shape the startup funding environment. Indonesia is still digesting a bubble hangover and high-profile fraud cases, with many investors nursing wounds and resetting their risk appetite.
Across all of these markets, the common pattern Kevin keeps coming back to is the “single‑source funding problem” ; ecosystems where one class of capital (government, CVC, or family groups) ends up dominating deployment decisions.
“It’s not that government money or CVCs are inherently bad. The problem is when they’re the primary or sole option, they gravitate to ‘sure things’ and later stages.”
That single-source bias is important context for power-law returns: if most of the capital wants to fund Series B and pre-IPO rounds, there simply isn’t enough early-stage experimentation to create a healthy distribution of outcomes.
3. Power law still holds but at 50–250M, not at unicorn scale
One of the most useful parts of our conversation was Kevin’s insistence on separating the concept of power law from the dollar values we associate with it in mature ecosystems.
He makes two simple points:
Power law is about distribution, not absolute numbers. A small subset of companies will drive the majority of returns in any startup ecosystem including Southeast Asia, even if the “winners” are 50–250M exits rather than multi‑billion outcomes.
Failure rates don’t magically disappear in emerging markets. You can reduce them through value-add, but you cannot wish them away, and any serious strategy has to respect that.
Kevin is very explicit with his own LPs:
“Our sweet spot is companies exiting in the 50 to 250 million dollar range. We’re not chasing unicorns. If we hit one, I won’t complain but given where Southeast Asia is, I’d rather build a fund that works at this scale.”
This is a power-law lens calibrated to reality:
In a young ecosystem with fewer large buyers, limited IPO pathways, and concentrated corporate or family capital, the modal “great outcome” is smaller in absolute terms – but still meaningful on a fund-returning basis.
A 100M exit in SEA, at the right entry valuation and check size, can be every bit as powerful in a portfolio as a 500M or 1B exit in the US. The ratios matter more than the headline number.
Kevin’s second point is the one many pitch decks conveniently gloss over: failure rates are structural. Restaurants fail at high rates for reasons that have nothing to do with technology; people get bored, tastes change, and fixed costs are unforgiving. Startups, especially in emerging markets, inherit all of that base risk plus regulatory, talent, and capital-stack complexity.
You can improve probabilities through hands-on support, better screening, and disciplined follow-on decisions. You cannot design a world where the failure rate is close to zero and any model that implicitly assumes that is not a serious one.
4. What this means for emerging managers in SEA and other EMs
If you’re an emerging manager building a first or second fund in Southeast Asia or a comparable emerging market, Kevin’s view suggests a different starting point for your deck and your own internal model.
Instead of:
“We’ll find 1–2 unicorns in a 20–30 company portfolio, and that’s what returns the fund.”
You might be better served with:
“We will deliberately design a portfolio where several 50–250M outcomes can return the fund, knowing that failure rates will remain non-trivial.”
Practically, that translates into a few design choices:
Check size and entry discipline. Your average check and entry valuation need to make 50–250M outcomes genuinely fund‑moving. That usually means earlier, smaller checks with enough ownership concentration, not a spray‑and‑pray model that quietly hopes for unicorns to patch weak underwriting.
Concentrated, niche thesis. Kevin is unapologetically focused on B2B in Southeast Asia, where he can build a repeatable pattern-recognition engine and value‑add playbook, rather than generalist geography‑only positioning. That focus is what makes a 50–250M exit in a specific B2B vertical legible and attractive in a portfolio model.
Boots on the ground as risk management. Indelible positions itself as a conduit for foreign capital into SEA, but with very local, “boots-on-the-ground” underwriting and support. That’s not branding it’s a risk control mechanism that acknowledges how hard it is for helicopter capital to reliably pick winners at the earliest stages in these markets.
There’s also a more personal layer Kevin talks about: conditioning as an emerging manager.
He notes that you can’t just be “a finance person with a CFA” and assume that qualifies you to run an early-stage fund in a complex, emerging ecosystem. In his case, he had to actively unlearn some of the habits traditional finance training creates, especially the desire for perfected analysis in situations where imperfect, probabilistic judgment is the only reality on offer.
Here, programs like VC Lab come into the story not as a sponsor, but as one of the places where people like Kevin compress the learning curve. We talk about VC Lab and the wider “emerging manager stack” in the episode, but the real message is broader: structured support can help, but it does not replace the need for deep local context and genuine ecosystem participation.
5. What this means for founders
For founders in Malaysia, Thailand, Indonesia, the Philippines, Vietnam, and other emerging markets, this power-law lens at SEA scale should change how you listen to investor narratives.
First, sanity-check expectations.
If the investors around you are still speaking in unicorn language while operating in a market where most of the plausible strategic or financial buyers will top out in the tens or low hundreds of millions, something is off. Either their model is mis‑calibrated, or you are being quietly set up for misaligned expectations when it comes to exit timing and valuation.
Founders don’t have to become fund modelers, but it is useful to understand whether your investor believes that a 50–100M exit can be a win, or whether anything south of a unicorn is considered a “disappointment”. That belief will show up in how they support you, what risks they encourage, and how they react to credible acquisition interest along the way.
Second, pay attention to early-stage vacuum dynamics.
Kevin’s description of SEA’s single-source funding problems is especially important for founders at the earliest stages:
In Malaysia, a landscape dominated by government grants and a small number of actual VCs means you may have to design your fundraising to respect grant cycles, matching requirements, and political risk, not just product-market fit.
In Thailand or the Philippines, understanding how CVCs or family groups evaluate risk and strategic fit may be more important than optimizing for a future Silicon Valley growth round which may never arrive.
In all cases, the scarcity of independent early-stage capital means your first institutional partner will have an outsized impact on what becomes feasible later.
Founders building for 50–250M, ecosystem-consistent outcomes can still create life-changing businesses, strong returns for their cap table, and meaningful impact on their local economies. In many ways, those companies are the ones that actually reshape markets, even if they never become unicorns.
6. Why power-law realism matters for cross-border capital
Emerging Forward exists because I keep seeing the same pattern: capital flowing between Europe and APAC/emerging markets through channels most people don’t track, angels, syndicates, first‑time GPs, and new programs that help them stand up funds.
Kevin sits in the middle of one such corridor: foreign LPs who want Southeast Asia exposure but know they can’t simply drop into Jakarta or Kuala Lumpur for a week and expect to build a reliable pipeline.
A realistic, SEA‑calibrated power-law thesis is one of the best signals we can send across that corridor:
To LPs/investors in Europe and elsewhere, it says: We understand the actual size of this market, the exits that are feasible today, and the failure rates we’re likely to face, and we’re designing our fund around that, not importing a fantasy model.
To founders across the region, it says: We are not here to force you into a unicorn narrative that doesn’t fit your context.
And to emerging managers everywhere, it’s a reminder that power law is not optional but the way it shows up in your fund is something you can design for thoughtfully.
7. Listen to the full conversation
We go much deeper in the episode, including:
The “single-source funding” problem across Malaysia, Thailand, the Philippines, and Indonesia; and what might unlock the early‑stage vacuum.
How Kevin thinks about conviction, failure rates, and value-add as parts of the same equation.
Lessons from his own journey transitioning from traditional finance into running a SEA B2B seed fund.
A grounded look at programs like VC Lab, where they help, and where local context still has to do the heavy lifting.
If you’re a founder or emerging manager operating between Europe, Southeast Asia, and other emerging markets and this resonates, I’d love to hear how power-law thinking shows up (or misfires) in your own context.
