Angel Investors and Angel Investors Networks
The term “angel investors” refers to individuals who invest their own money and sometimes their time, unlike venture capitalists whose investments are mostly relying on externally raised funds, into very early-stage startups and accept to take high risk with the expectation of getting high reward. The existence of angel investors helps early-stage startups solve the problem of getting capital when no other option is available (e.g. loans from banks or venture capital).
However, findings from a study conducted by Yoosef Ghahreman and Barton Hamilton have shown that the more organized angel investors are, the better the investment decisions are in terms of the return on capital. Therefore, over the recent years, we witnessed more and more angel investors band together to form investment groups or participate in investment networks in which they can share experience, pool and contribute more to startups for their portfolio companies by mentoring/coaching them and not just giving financial support needed to grow their businesses.
Different types of angel investment networks
An angel investment network can differ from others based on the environment those angel investors are in and their preferences but in general, angel investment networks exist under 4 types of organization:
- Public Angel Networks: Any angel investors can join the network without having to pay any subscription fee to be a part of it. This formation requires the least commitment and has the lowest level of liability for the angel investors within the network. As a result of that, investors within it can decide to invest if they see potential in a particular startup without being committed to meet any requirement for number of investment or minimum investment amount per year.
- Private Angel Networks / Angel Clubs: Opposite to Public Angel Network, Private Angel Network / Angel Clubs can be seen as “exclusive” clubs of which members must satisfy certain requirements before they can be a part of it. These requirements can be under form of subscription fees (to cover the operation costs of the club) or the number of investment participated annually/minimum amount of investment annually. This kind of clubs will have a team working for them to organize pitching events, to source qualified deals and to execute basic screenings on the sourced deals.
- Angel Funds: This type of organization differs from the others mainly because of its investment process. An investment decision on any startup will have to go through a voting process by the members of the group and the investment will be done by the whole angel fund. However, members of the group are not only limited to the group investment but can also make additional personal investments on top of the fund investments.
- Online Angel Networks: Unlike the typical three networks above that have mostly a local/regional investment radius, the purpose of these online networks is to provide a platform to connect entrepreneurs with angel investors all over the world. Some popular online angel investors networks are: Angel Investment Network, Gust and AngelList.
The rise of angel networks in Southeast Asia (SEA)
Although angel investment networks have been a hot trend in the US for dozens of years now, in Southeast Asia, where many startup ecosystems are at an emerging stage, it just started to catch up with the trend in the last decade. The timing couldn’t be better for angel investors to look for investments in SEA startups, since the startup ecosystem in the region has grown to be more and more robust, but most of the fundings still went to startups in later stages (with 80% of SEA fundings in 2016 going to only 8 startups: Grab, Go Jek, Sea Group, and Carousell to name but a few), which leaves a huge gap in more early stage investments open.
Here are a few angel networks in the region that are very active and contribute a lot to the development of the regional startup ecosystem:
Investment size: SGD 100K — SGD 1M (willing to team up for bigger investments)
Investment stage: Seed, Pre-series A and Series A
Investment focus: Companies with physical presence in SG and SEA countries or companies with strategy to enter SEA markets. BANSEA has no industry focus for its investments.
Notable members: Mark Hon, Mike Holt, Douglas Abrams
Notable investments: Carousell, Carro, CXA Group, 99.c0
BANSEA is an angel investment network established in 2011 with the investment focus on Singapore and SEA or any companies that have a strategy to enter SEA markets. Investors can only join this network by invitation from existing members. There are 10–12 events hosted annually for members of the network to listen to company pitches, which were pre-screened by their committee, and they can decide to make investments as individuals or as group investments.
Investment size: USD 10K — USD 100K (individual investment), USD 500k (pooled investment)
Investment stage: Indonesia-based, preferably pre-seed or seed
Investment focus: Companies in different sectors and industries (from IT/technology startups to more traditional social enterprise models)
Notable members: Aryo Ariotedjo, Andy Zain, David Soukhasing
Notable investments: Worktrees, Gandengtangan, Landmapp
ANGIN is the first and largest angel investment network in Indonesia. With a dedicated team and 47 business leaders within its network, ANGIN has got 23 companies in its portfolio. Besides providing funding to startups, investees within ANGIN’s portfolio will also benefit from the angel investors’ industry expertise and business know-how with ongoing 1-on-1 support and introductions to customers, suppliers, and partners in Indonesia and the region.
Investment size: N/A
Criteria: Must be a Sdn Bhd tech-related company and incorporated in Malaysia with a minimum 51% Malaysian ownership. Another criteria is that they only invest in startups which have a cumulative revenue below RM 5M (~ USD 1.16M) with less than 3 years of operation.
Notable members: Sivapalan Vivekarajah, Choon Hong Lok
Notable investments: N/A
Unlike other angel investors networks in the region, MBAN acts as the official trade association and governing body for angel investors and angel clubs in Malaysia. The aim of this network is to create awareness and train angels as well as sourcing and managing deal flow for the same. Investors and startups can register to MBAN as Accredited Angel Investor and Certified Investee Company respectively, to benefit from the Angel Tax Incentive Programme. The Angel Tax Incentive Programme will reduce the risk of angel investing by giving back in the form of tax exemption amounting to RM 500k (approximately USD 120k) to the investors for their investments.
Investment size: USD 10K — USD 1M
Investment stage: seedand early-growth stage
Investment focus: Nexea Angles’s investment categories include: E-commerce, F&B, Agro Tech, EdTech to name a few.
Notable members: Ben Lim
Notable investments: Running Man
Being one of the most active angel investment networks in Malaysia, Nexea Angels has received 800+ startups’ pitches in the recent years, 500+ of them was able to go through the screening process in which only 20+ of them received investments from them. They’ve deployed USD 5M in funding with normal investments range from USD 10k to USD 1M.
- Bangkok Venture Club (Bangkok VC)
Investment size: Depending on countries (e.g: USD 500k — USD 1M for startups in Singapore and Thailand, USD 50k to USD 300k for those in Malaysia)
Investment stage: seed and early stage
Investment focus: Bangkok VC is looking to invest into startups operating businesses in existing industries rather than only focusing on hi-tech sectors.
Notable members: Mark Wolf, Surawat Promyotin, Chavapas Ongmahutmongkol
Notable investments: Undisclosed
Founded in 2014 with a group of executives, investors, and entrepreneurs in Thailand and across SEA with deep expertise in different industries, Bangkok VC is Thailand’s largest Angel Investment Group. There are 11 screening meetings (internal meetings) and 5 general meetings hosted annually with startups invited to their bimonthly dinner. In 2016, it has announced a $20-million fund to be invested in startups and it’s expected to exceed that amount with a handshake between Bangkok VC and a network which is deemed to be “the largest investment network in the world”.
Here are some other angel investors networks in the region that you can also refer to:
- 1000xClub (Thailand) — The Bangkok-based angel investors network consists of 30 members with the commitment of at least USD 1M for investment from each member. Its investment focus includes startups in the retail, F&B, property, healthcare, fintech, travel, and education sector.
- AsiaStartups (Thailand) — Newly launched in the beginning of April 2017, AsiaStartups joins 1000xClub and Bangkok Venture Club to contribute to the growth of VC activities in Thailand’s tech ecosystem, which have been skyrocketing in the past recent years but still fairly nascent.
- Manila Angel Investors Network (Philippines) — Once every 3 months, investors and members within the network participate in a meeting to review all deals that were sent to them and also the deals that have advanced to their respective offices. MAIN’s investment interests include drones, Fintech and Food.
- Asia Fintech Angels (AFTA) — This is the first angels network in Asia which is fully dedicated to and specialized in Fintech and financial innovations. With the investment size ranging from USD 100k to USD 500k, AFTA is looking to support Asian-based entrepreneurs preferably in Hong Kong or Singapore but also in other territories with the intention to grow their businesses in Asia.
- VIC Partners (Vietnam) — A private investment group of 20 credited, high-net-worth entrepreneurs with the same interest in angel investing in the young and emerging startup ecosystem of Vietnam. With the aim to become the official voice of the Vietnam angel investor community, VIC wants to help connecting and matching not only local angel investors but also regional and global investors with high potential Vietnamese startups.
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About Fast Forward Advisors (FFA):
We are a boutique consulting firm based in Germany, Italy, Poland, Singapore and Vietnam with global reach focused on Innovation Strategy, Startup Development, Emerging Market Entry Strategies and Equity Fundraising.
At FFA, we define ourselves as Entrepreneurial Consultants; we are lean, tech-savvy and progressive thinking, with a strong hands-on approach to consulting and to value creation for our clients.
With a great combination of our expertise and diverse networks by working with startups and startup-related organizations around the world, FFA can support angels, angel networks and investors in generating quality deal flow generation, deploying in-depth due diligence on target companies and helping them make the right investment decisions.