We need a kick up the you-know-what, says angel investor

  • VC admits it has been lagging in sharing info on initiatives
  • Targets to strengthen the ecosystem

Bob Chua, founder of Virtuous Investment CircleBEFORE meeting Bob Chua (pic), a founder of Virtuous Investment Circle (VIC) this morning, I sounded out a few entrepreneurs to get the buzz on what people thought of the angel group which describes itself as a non-profit organisation passionate about creating a vibrant ecosystem for angel investing in Malaysia.
 
It was mostly not good. The few entrepreneurs I spoke to said it did not seem like VIC had made any investments at all since it was announced with much fanfare in 2010.
 
“Absolutely not true!” said Chua, who is also chairman of the group. “I myself have made three investments and between the rest of the members, we have made between five to 10 investments already.”
 
Not all the investments are in tech related areas though. Chua said that his mantra is to “invest in anything that can make money.”
 
However he admitted that the group, which is supported by Cradle Fund Sdn Bhd and Malaysian Venture Capital Development Council, “needs a kick up its arse” in the sense that it should do a better job in sharing what it is doing to live up to its promise of “passionately creating a vibrant ecosystem for angel investing.”
 
In this sense he hopes that the Asian Business Angels Forum (ABAF) that will be held in KL in May 23rd to 25th will be the kick-start to reinvigorate VIC.
 
VIC has been working behind the scenes to make some significant changes to the ecosystem in Malaysia, he claimed, adding, “We are doing a lot of ‘bigger picture’ things and these take time.”
 
VIC is trying to do to strengthen the ecosystem via three avenues.
 
First, it has been thinking about how to incentivise high net worth individuals, especially those who are not in the tech space, to become angels and start investing in entrepreneurs and their ideas.
 
“Is this through tax breaks and other incentives?” he suggested. When pointed out that there are such incentives already, Chua said he feels that these have not been well communicated or need to be further enhanced.
 
Chua was also excited about VIC's efforts to “spark a new way of thinking” about angel investing – crowd-sourcing for funds.
 
“This is a model that has worked well in the United Kingdom and the United States, and we have been engaged with our Securities Commission (SC) in discussions and they are quite keen to make it happen in Malaysia,” he said.
 
However, with so few benchmarks, he acknowledged that this process would take time, especially as the SC needs to make sure investors are well protected and know the risks going in before it issues a licence for this category of fund.
 
A third initiative VIC is working on is to get a matching scheme going for angel investments with the government coming in to match an amount that an angel makes in a start-up.
 
“I am hopeful that at ABAF, we can make an interesting announcement around this initiative,” he said.
 
Chua feels the upcoming ABAF will be a great platform for Malaysian start-ups to meet with angel investors from around the region.
 
“We keep hearing about venture capitalists struggling to make investment while entrepreneurs say they are struggling to get funding. Perhaps the entrepreneurs are talking to the wrong group of investors and are getting whacked in valuations,” he said.
 
Whatever the situation, he feels strongly that this is the best time to invest in start-ups.
 
“We need to make it happen. Investing in innovation and interesting ideas is the way to create lasting value and for Malaysia to move away from its natural resource dependence,” he said, adding that he hoped VIC would play a leading role in this.
 

 
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