Counterpoint: ABAF adding value to the ecosystem
By Dr V. Sivapalan June 1, 2012
- Angels are a key part of the entrepreneur ecosystem
- If we don’t have such a community, we need to create it
“I LOVE talking to entrepreneurs and I am glad I managed to do this at ABAF,” said Anil Joshi of Mumbai Angels, an angel investment firm from India who participated at the recent Asian Business Angels Forum, hosted by Cradle Fund in Kuala Lumpur.
Joshi was one of nine angels who had face-to-face meetings with 33 entrepreneurs specially selected to attend the sessions by FoundersAsia, a site created to connect entrepreneurs with investors and mentors.
Many of the angels were impressed enough with these entrepreneurs to consider mentoring them with a view to possibly investing sometime in the future.
Therein lies the value of ABAF – a chance for networking, building relationships, discovering interesting companies, and when the “courtship” is positive, an investment.
The mantra for ABAF was the 3Ms – Mentors, Markets and Money [and the money was the least important element as we told the angels]. All successful startup ecosystems need angel investors, the early stage investors who take the biggest risks by investing at the earliest stages of the company’s formation.
Angels also offer far more than money. They offer their expertise, experience, knowledge, networks and motivation.
Facebook had Peter Thiel, a co-founder of PayPal as its angel investor, and Google had Ram Shriram (senior vice president at Amazon).
Apple’s first angel was Mike Markkula, the former marketing manager at Intel who provided the management and marketing skills that neither Steve Jobs nor Steve Wozniak had at that time. He also provided US$250,000 in funding to Apple and at the time of Apple’s IPO his investment was worth a reported US$154 million.
Silicon Valley is what it is today thanks to angels. That is the very reason why Malaysia has not been able to create more successful companies, because of a lack of angels.
So, if angels are a key part of the entrepreneur ecosystem and we don’t have a vibrant angel community, we need to create it. We need to nurture and incentivise angels and we must provide an avenue for angels to find entrepreneurs whom they can mentor and fund.
We need to inspire angels, we need them to come forward and create communities or networks of angels like the Business Angels Network of South East Asia (BANSEA), and we want them to meet entrepreneurs who ignite their passion for investing.
ABAF did all of these and more. By bringing together angels from abroad we provided sharing and space for them to network with local angels and entrepreneurs.
Local angels and prospective angels learnt about the successes of their foreign counterparts. They also had the opportunity to learn from other angels’ experiences on investing methods, what to look for and how to avoid the duds. I even met the CEO of a food and healthcare company who attended ABAF just to know more about angel investing and is now keen to be an angel.
Entrepreneurs also met many angels and had the chance to pitch their ideas to them at the FoundersAsia session and another pitch session organised by Cradle and the Multimedia Development Corporation.
ABAF is not the end product but an event to catalyse and start the ball rolling in creating an ecosystem for angels in Malaysia. Some of the foreign angels have indicated an interest in investing in Malaysia jointly with local angels but for that to happen, there must be a network of angels.
We have created entrepreneurs over the last 15 years but have neglected angels -- a missing cog in the wheel of entrepreneurship. I am hopeful that ABAF will be the catalyst for better things to come.
Dr Sivapalan is a passionate entrepreneur and mentor who loves working with startups. He is the Chief Evangelist of Proficeo, an entrepreneur coaching organisation and co-founder of AllStars, Malaysia’s first Silicon Valley type of accelerator