Members of the Malaysian Business Angel Network share on investing and the roles their respective organisations play

For the uninitiated, angel investing as well as equity crowdfunding is when individuals or an entity offers promising startups (that aren’t public listed) funding in exchange for a piece of the business—usually in the form of equity or royalties.

While venture capitalists need to see solid plans and paperwork before agreeing to fund a business, there’s a bit more freedom with angel investors who buy in on ideas. This is a great way to increase capital for startups, and can definitely benefit investors too.

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Nowadays, investing is made more accessible, through crowdfunding platforms, for example. However, it can be difficult to ascertain where to invest, with a plethora of options available, on top of concerns on returns.

Angel investors typically reach out to developing companies via referrals and agree to pre-set terms before putting down their money; but how do you ensure you’re making a safe bet?

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Photo: Unsplash
Above Photo: Unsplash

Enter bodies like the Malaysian Business Angel Network (MBAN) which acts as the official trade association and governing body for angel investors locally, responsible for the accreditation of individual angel investors and angel investors clubs, creating awareness and training as well as monitoring angel investment statistics in Malaysia, with the aim to benefit all involved.

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We speak to four women from MBAN on how investments aid the local business ecosystem.

Xelia Tong, managing partner, ScaleUP Malaysia

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Functioning as the treasurer within the MBAN council, Xelia Tong is one of the longest serving members as well as the managing director of ScaleUp Malaysia—a hybrid growth stage accelerator cum venture capital overseeing investor relations and partnerships.

Her main function in ScaleUp is to oversee investor relations as well as partnerships, which is equally crucial to MBAN—after all the ecosystem isn’t that big, so there are bound to be overlaps.

“When MBAN first started, the goal was to slowly reduce the government’s investment burden into startups, and basically expose private individual investors. And we got closer to our goal, thanks to the approval of the angel tax incentive (which reduces the risk associated with early stage investments by giving back in the form of tax exemption to the investors). Then came equity crowdfunding which further spurred investments, and right now for MBAN, we want to tap into investments from the corporate sector as well,” she shares.

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According to investor data, since the pandemic, there have been a number of corporates that have been keen on investing into early stage companies, yet some do not have enough expertise to do so. Thus, MBAN would be the perfect avenue to help mediate deals between startups and corporate bodies.

“For MBAN right now, besides just educating individuals on equity crowdfunding, we also want to help corporates that want to set up their own venture capital arm,” explains Tong on what’s next.

For corporates that are looking to begin investing, or even individuals, the MBAN Summit 2022 is definitely an event to look out for, which happens on the 23rd and 24th of this month.

Karen Puah, country manager, Fundnel

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Having been inducted into Tatler’s Asia’s Most Influential list last year, Karen Puah is now also the country manager of Fundnel, on top of her other roles, which include being an MBAN council member too.

Fundnel is among one of 10 equity crowdfunding platforms that is regulated by the Securities Commission Malaysia, and boasts one of the largest private capital markets in Southeast Asia, having raised over RM30 million to assist startup companies in various industries.

One agenda that’s close to Puah is the empowerment of female investors. “It’s important for more women to cut small cheques to help other female-led startups as well,” she shares.

Among the reasons women invest less are perhaps their risk-averse nature, compounded by the fact that there probably isn’t as much support or info readily available to women—without them having to endure some mansplaining.

“We need to have more people, especially women, to help startups even start, and a boost in startups would translate to a boom in economic activity, which could then lead to attracting foreign direct investments,” expounds Puah.

See also: Karen Puah Shares This Advice for Women in Fintech

Dr Melissa Foo, head of iLabs Ventures

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Sunway iLabs is a not-for-profit setup that helps foster entrepreneurship and stimulate market-driven innovations.

Essentially what iLabs does is to work with the different business units, with six key focus areas (smart cities, edutech, digital health tech, agri-food tech, e-commerce and fintech) to ensure structure while being aware and working with the latest startups, technology and innovation to provide better products and services.

Dr Melissa Foo, who’s also the vice president of MBAN, plays an integral role in nurturing both early-stage startups as well as later-stage scaleups to become globally successful companies through venture building with a structured startup accelerator programme.

“Most of our partners are institutional venture capitalists, and we extend our services to basically any startup that is able to provide positive impact towards the community.

“But first, the startups need to go through an accelerator programme that matches them to the right business units,” Foo explains.

Although investing in businesses is great, investing in people can be better. Thus, in partnership with Penjana Kapital, Sunway iLabs recently began KapitalX—Malaysia’s first venture capital talent development programme.

The two-month course aims to nurture future venture capital talents with the necessary skills and know-how from the best venture capitalists around the globe.

Open to final year university students and those with less than three years of work experience, or entrepreneurs and early-stage startup employees, KapitalX will have you dealing with both theoretical as well as practical knowledge that ends with a venture fellowship. 

Elain Lockman, co-founder, Ata Plus

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The co-founder of Ata Plus and MBAN council member, Elain Lockman talks us through some of the benefits of equity crowdfunding.

Channelling insights from Ata Plus itself, which was one of the first equity crowdfunding platforms (having begun operations back in June 2015) to allow SMEs to raise funds from the public, with a focus on halal businesses, investors can breathe a sigh of relief as Ata Plus only includes businesses that have already gone through stringent compliance checks, including the backgrounds of the directors on top of the company itself.

Among the benefits of crowdfunding is that the general public now have access to startups that have big potential. She shares that if one had invested 10,000 in Uber 10 years before the company got listed, one would have had a return of somewhere around 110 million from the e-hailing company.

In the past, these type of opportunities were only visible within the angel investor community, VC firms or sophisticated investors who have a lot more funds to spare. Now though, even sums as small as RM10 have been accepted via equity crowdfunding.

However, Lockman does advise investors to be patient and spread their risk. “These are typically more riskier types of investments, as a majority of startups don’t generally survive; you have to be your own fund manager, and do your homework on the businesses and terms.

“As I mentioned though, you can invest as much or little as you want, and generally when you hit it big, you more than cover your losses,” she shared.

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