In an era where disruption is the norm, Malaysia’s business and capital funding landscape is facing its fair share of resistance from local organizations that are comfortable with the status quo – why should they change the way they have always done business?

In a bid to propel the nation’s most promising mid-tier companies (MTCs) and high-performing SMEs to the next level of growth, Capital Markets Malaysia (CMM) conceived a four-month executive leadership program that aims to bridge the gap between ambitious companies and the capital they need to scale.

Navina Balasingam, Capital Markets Malaysia

Navina Balasingam, General Manager of Capital Markets Malaysia, said, “What we aim to do is to create awareness of the availability of capital market funding options.”

In doing so, the Elevate program is not just elevating individual companies – it has potential to elevate the entire Malaysian capital market.

The Challenge: articulation and adaptation

“There’s money in the market. What they (investors) just don’t have is places to put the money into,” explained Bikesh Lakhmichand, founder at 1337 Ventures, the program’s delivery partner. “We found it was mostly (due to lack of) communication.”

This lack of communication is contributing to a “mismatch” between entrepreneurs saying there is no money, and investors saying there are no good entrepreneurs worth investing. Bikesh emphasized the importance of being able to articulate growth plans and how the capital will be used, rather than just focusing on historical performance.

But, this is only part of the challenge.

There is a broader issue facing Malaysian businesses as many are struggling to adapt to a rapidly changing global landscape, where digital transformation, ESG considerations, and the need for technological innovation, are no longer nice-to-haves, but must-haves.

Bikesh Lakhmichand, 1337 Ventures

Bikesh highlighted the urgency by saying, “If SMEs don’t adapt to figure out how to go digital by default, then they’re going to lose their market share.”

Rethinking growth strategies

Bikesh noted that many companies have never had to present or pitch to investors before. Case in point is Kasut U, a family-friendly shoe store chain hailing from Terengganu, and one of the 12 program graduates from Cohort 1, who before the program had believed the only source of funds for business growth is commercial banks.

There’s money in the market. What they (investors) just don’t have is places to put the money into.

“The program showed us where we stand (in the market), and Bikesh showed us how to position ourselves in the market,” shared Raymond Gan, Kasut U’s managing director.

“Bikesh told me, ‘You should be proud that you are an East Coast company doing RM60 million sales annually!’ Finally, I knew that RM60 million is actually a lot,” Raymond confessed.

He added that the four-month program had highlighted the need for the over five-decades old family business to look into internal processes, the use of IT systems like ERP and EMS (enterprise resource planning and enterprise manufacturing software), the viability of a franchise program, and even technology like RFID (radio-frequency identification).

The program also emerged the question of how to partner strategically for support and knowledge.

“We learned these, and also the importance of setting a timeline (to an IPO) in an intensive way, and with group support. Now, there is a clearer direction about how to get there and why,” Raymond said.

The Elevate program paves the way for companies to think beyond mere survival or incremental growth. Bikesh emphasized the need for “portfolio-related moves” – bold strategies that can propel a company into new markets or product categories – and not only performance-related measurables, or historical performance.

One success story is that of an FMCG company that wanted to boost its retail revenues. Instead of merely dipping its toes into ecommerce, the company acquired an up-and-coming ecommerce firm, instantly gaining expertise and a new sales channel.

Building a bridge to capital and the importance of storytelling

The program doesn’t just focus on strategy – it’s actively connecting companies with potential investors, which saves time in terms of ‘shopping around’ and knowing who to speak to.”We have them meet venture capital firms, private equity firms, angels, investment bankers,” Bikesh explained.

‘You should be proud that you are an East Coast company doing RM60 million sales annually!’ Finally, I knew that RM60 million is actually a lot.

Here, there is a critical role for storytelling and digital presence, even for B2B companies. The program is teaching companies how to “put themselves out there,” a crucial skill in an age where digital visibility can make or break a company’s fundraising efforts.

The icing on the cake is the reflective approach the program takes to:

• Reinforce the basics via design thinking sessions,
• Emerge the strategic considerations like focus on branding, marketing, and ESG disclosures, as well as,
• Plan for capital fundraising via fine tuned business plans and implementations of internal controls.

The program’s holistic approach – addressing everything from strategy and innovation to governance and investor relations – is a much needed standard for how mid-tier companies and SMEs can prepare for the next stage of growth, whilst cultivating a more vibrant capital market ecosystem in Malaysia and the region.