Carl Härtlein is a venture capital advisor and cross-border investment strategist with over 30 years of entrepreneurial experience. His work focuses on emerging economies, startup ecosystems, and sustainable capital deployment.
─ Contributor to AsiaBerlin, connecting Asian startups with Berlin’s innovation ecosystem.
─ Advises global VC funds on structuring Asia-Europe investment vehicles.
─ Supports startups in emerging markets including India, Vietnam, and Indonesia.
─ Mentors founders through international programmes such as Seedstars and UNDP Impact.
─ Conducts academic research on “Soft Due Diligence” in venture capital, emphasising human factors in investment decisions.
Venture capital drives innovation, but to attract foreign investment, Sri Lanka must rethink its strategy and craft a narrative that resonates with global venture capitalists. While the country has no shortage of talent or ideas, regulatory constraints, limited local capital, and low international visibility have slowed its progress in building a vibrant startup ecosystem.
Carl Härtlein, Founder and Managing Partner of Saint Clair Advisory & Capital, has spent years connecting global capital with high-potential markets across Europe and Asia. In this conversation with Echelon, he offers a global investor’s perspective on where Sri Lanka is falling short, what shifts are needed to draw more cross-border funding, and how initiatives like AsiaBerlin can help connect Sri Lanka’s talent with global venture networks.
How Should Sri Lanka Pitch for the World’s Limited Capital?
Sri Lanka’s challenge in attracting venture capital is due to limited local risk capital and the difficulty of drawing foreign investors. Foreign investors prefer familiar markets, with known legal systems, languages, and cultures, as they simplify the process. This is why they are more comfortable in their own countries.
For Sri Lanka to compete, it needs a strong, unique narrative that highlights its distinct investment opportunities, differentiating it from other emerging markets like Indonesia or India. To convince investors it is worth navigating the complexities of investing in Sri Lanka, it has to showcase clear advantages that they can’t find at home.
What Factors Have Contributed to the Recent Decline in Venture Capital Availability?
Venture funding has been limited recently due to high interest rates, which reduced available capital. Though rates may be falling, their effect will take time, especially for slower-responding cross-border investments.
But high rates aren’t the only cause. Capital is also tied up elsewhere, with few exits and low liquidity in long-term investments further limiting funds. So, while lower rates might help, other factors must improve for venture funding to rise significantly, especially internationally.
The funding slowdown began in 2021– 2022 after COVID, as interest rate hikes accelerated an already tightening global capital market. Higher rates made safer investments like government bonds more appealing, making it harder for venture funds, particularly new managers, to raise money.
What Key Challenges Must Sri Lanka Overcome to Build Venture Capital Capacity Locally and Effectively?
Sri Lanka’s venture capital ecosystem faces major challenges from regulatory hurdles and market limitations. Venture funds aren’t tax transparent, causing double taxation that deters investment. Promising government signals about reforms to improve tax transparency and simplify cross-border structures are crucial for growth.
The small domestic market forces startups to scale internationally, but complex regulations around incorporating abroad create barriers for investors and founders.
Culturally, Sri Lankan entrepreneurs tend to be modest and don’t promote their strengths well. To attract global capital and partners, Sri Lanka must better communicate its identity and the quality of its startups.
How Do You Balance Transparency and Risk with LPs in Markets Like Sri Lanka, Where Governance and Reporting Need Improvement?
Venture capital relies heavily on personal trust and transparency, especially in markets like Sri Lanka where governance isn’t fully institutionalised. General Partners (GPs) must actively keep Limited Partners (LPs) informed and comfortable, building trust through regular reporting and clear communication to overcome investors’ unfamiliarity and perceived risks.
Is Creating an India-Sri Lanka Venture Capital Corridor Feasible, or Should Sri Lanka Target Global Funds?
Sri Lanka’s unique position as a bridge between India, Bangladesh, and Pakistan is a major strength, especially since these countries don’t always engage directly. Sri Lankan companies naturally expand into nearby markets like Bangladesh, aided by shared history and similar systems like banking and accounting.
However, Sri Lanka shouldn’t measure itself by India’s scale. While India has more resources and capital, Sri Lanka needs to focus on developing its own narrative and niches, rather than just chasing big numbers.
Does AsiaBerlin Intend to Help Build the Startup Ecosystem Here and Connect It to Global Capital?
We don’t build startup ecosystems directly; instead, we collaborate with them, focusing on investment and venture capital. Our role is to bridge investment and startup ecosystems because capital is as vital to innovation as customers, R&D, or universities. Without capital, ecosystems can’t thrive.
Global innovation depends on mobile capital reaching underfunded ecosystems. My mission is to channel funds into places like Sri Lanka, helping ideas grow where they otherwise couldn’t.
Sri Lanka has great potential but needs better marketing. Through AsiaBerlin, I connect capital-rich regions like Berlin with talent-rich Sri Lanka. Unlike broad comparisons to India, Sri Lankan startups focus on high-quality, niche services.
The government’s willingness to reform outdated policies is key to attracting investors. For AsiaBerlin, success means more Sri Lankan startups engaging European markets and increased European investment in Sri Lanka. At the upcoming AsiaBerlin Summit, 12 Sri Lankan startups will showcase their innovations, fostering cross-regional collaboration and stronger ties between Asian ecosystems.