Venture capital (VC) does not rely solely on intuition when assessing the business prospects of a startup. They combine experience, data, and simulation models to assess and predict the chances of a startup’s success.
“I’m not a fortune teller, so I can’t predict whether this startup will succeed or fail based solely on intuition,” said G.N. Sandhy Widyasthana, CEO of MDI Venture Capital Singapore. He made this statement while opening a lecture session titled “Application of Agent-Based Modeling (ABM) in Venture Capital” at the Master of Science in Management Program at SBM ITB, on April 22, 2025.
In his lecture, Sandhy shared numerous experiences from the startup world, a realm characterized by uncertainty yet rich with potential. He identified three fundamental questions that often arise when making investment decisions: How can I evaluate the likelihood of a startup’s success? When is the optimal time to invest? Is it possible to develop a model that minimizes the risks associated with investment decisions?
To address these questions, Sandhy employs an action research framework, which is a cyclical method that promotes structured and reflective decision-making in an uncertain world. This framework consists of four main stages that guide decision-making for the startups being evaluated: diagnosing, planning action, taking action, and evaluating action.
The process is iterative and continuously improved, ensuring it is not a one-time effort. Evaluation occurs regularly, allowing decisions to adapt to changing market dynamics.
Sandhy also emphasizes that investment from venture capital, particularly from corporate venture capital (VC), extends beyond just financial support. More importantly, it involves creating strategic synergies between startups and their parent companies.
“If our focus is simply providing funding, banks can also do that. However, we are not a bank. We must consider what strategic advantages startups can offer our parent company.”
In this case, venture capital is not only about providing funds to startups, but also how these funds can bring greater benefits, such as strengthening the innovation brought by startups to the parent company.
For example, Sandhy explained how the Djarum Group, through PT Global Digital Niaga, invested in Gojek. This investment created a strategic synergy, where Gojek received financial support and access to a large network. At the same time, the Djarum Group strengthened its position through innovations brought by Gojek, such as integrating the payment system with BCA. This synergy provides two-way benefits, accelerating Gojek’s development while strengthening the Djarum Group’s business.
Sandhy then introduced the Agent-Based Model (ABM) to map the dynamics in the startup ecosystem. Using tools such as SOARS, he can visualize the interactions between founders, investors, regulators, and customers.
ABM allows simulation of future scenarios that help MDI Ventures make data-based decisions and predict future dynamics that may occur in startups. Through this approach, he can see whether their assumptions about the startup’s future align with the reality that occurs. If it turns out to be different, they can further analyze why this happened and learn from the situation.
This lecture offers valuable insights for students: investing in the startup world is not merely a matter of speculation or relying on feelings. Successful investment requires careful decision-making, supported by data and a systematic approach. According to Sandhy, success in startup investment should be viewed not only from a financial standpoint but also in terms of contributions to innovation, the development of the digital economy, and the creation of mutually beneficial relationships between investors and startups.
“Venture capital must actively participate in managing the startup ecosystem to ensure it develops in desired ways. If not, startups may evolve in unintended directions,” concluded Sandhy.
