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Virtuous Investment Circle - Malaysia's Angel Investor Group
- 2. The Problem – Early Stage Funding
- 3. Funding Gap – Early Stage Funding
- 4. Boston Consulting Group Report No former structure for investor to invest in start-ups Invest in random deals that come their way Angel investors seldom invest due to lack of: Exposure of quality deals Time commitment
- 5. Virtuous Investment Circle (ViC)
- 6. Matching Investors And Entrepreneurs
- 8. About Us An angel investment group that is: Exclusive Not-for-Profit organization For high net worth private investors For investors that can add meaningful value to their investment The group is manager-led and investment is made by individual angel investors Membership by invitation only
- 9. Objectives A platform for innovative start-ups to raise funds and for investors to invest in potential start-ups To encourage and strengthen the local angel investment community. Generate quality deal flows through rigorous screening process. Provide guidance and mentoring for new business angel investors and entrepreneurs.
- 10. Area of Investments ViC focuses on Early stage companies looking for seed funding - usually less than 3 years old. SMEs looking for growth/expansion funding ViC is NOT industry/sector bias and will consider investments in both technology and non-technology areas.
- 11. Deal Size Investment amount ranges from RM50,000 to RM250,000 per angel investor. Investment proposals can range from RM250,000 to RM2.5mil.
- 13. Chairman – Bob Chuah Executive Director /Secretary - TBA Advisor – Johnathan Lee Treasurer – Chris Leong Committee Member – Matt Chandran Committee Member – Tan Swee Yong Committee Member – Evan Loo ViC Committee Members
- 14. Members (Angel Investors) 8-15 angel investors from various sectors Young, affluent, business savvy and appreciates technology Willing to invest and provide meaningful value No membership fee Vetted by ViC Committee members
- 15. Advisors 5-7 advisors from various backgrounds With extensive technical knowledge and business knowledge Domain experts with investment knowledge Offer advise on a pro bono basis
- 17. Panel of advisors to provide feedback if necessary
- 18. Recommend to appropriate angel investors
- 20. Angel investor(s) investDue diligence & Investment
- 21. Potential Exits Put option Call option IPO
- 22. Sustainability Fees (From entrepreneur) Nominal RM500 fee for business plan review 3% - 5% fee for projects that have successfully invested by Angel investors Events Sponsorship
- 23. Contact Formore information please contact Chris Leong chris@vic.org.my
Editor's Notes
- In the BCG report it has indicated that there enough high net worth individuals and angel investors in MalaysiaThey invest without a formal structure.Invest randomly on deals that come their way. Quality of deals are questionableSome factors also hinder investor from investing. They are: Exposure of quality deals. Angel investors might have limited exposure to start-ups and high growth companies Tremendous effort is needed to vet through deals is tremendous and can
- We feel that addressing these investment hindrance is key to motivate and attract angel investors to the group. Therefore, ViC was formed and structured to address the issues.
- ViC is solely a platform to match make investors with entrepreneurs. ViC is NOT as Investment Fund and does not invest directly into start-ups but act as a facilitator for investments. The investors which are the members, has the sole discretion to decide whether to invest or not.
- ViC aims to bridge the funding gap between grants (such as MDec and Cradle) and Venture Capital players in Malaysia’s funding eco-system.
- ViC is an Exclusive Not-for-Profit Organization that comprises a group of Angel Investors (angels). Angels are usually private investors who will invest and add meaningful value to attractive businessesTo protect the exclusivity, membership are upon invitation only. A individual can only be accepted to ViC with the approval of the other membersInvestment are not syndicated. Angel investor is to make the investment decision individually and have sole discretion in making the decision. Angel group is led by a manager that will: Promote the group Source for deals vet through deals prepare investment brief and recommendation do a basic due diligence for the investor.The manager will take away a big part of the effort needed by the investors to filter out deals to invest.
- 1) Serve as a platform for innovative start-ups to raise funds and for savvy investors to invest in attractive deals.2) To encourage and strengthen the local angel community in Malaysia.3) Generate quality deal flows for our members through a rigorous screening process.4) Assist our members in deal syndication and limited due diligence work.5) Provide guidance and mentoring for new business angels and entrepreneurs.
- Major focus on start-ups and small enterprises that needs funding to kick start their business or grow their business to the next level.ViC consider all investments in all industry and sectors which includes technology businesses and traditional businesses. ThereforeViC welcome all start-ups that have high growth potential and can deliver attractive returns to our investors.
- To invest meaningfully, we have advised our members to look at a minimum of RM50k per investment. However, there is no actual maximum limit on the amount they are willing/able to invest. Judging from the areas of investment by ViC, we estimate that this amount will not be more than RM2.5m.
- Following the Manager-Led Model, there will be an Executive Director to helm VIC. He/She will be reporting to ViC Committee and will co-ordinate and support the Angel Members. There will also be a panel of advisors to assist the members and the executive director in evaluating the deals.This is especially important as ViC welcomes any deals including deals that relates to biotechnology, E&E and other industry that is highly technical in nature. The advisors then will play an important role in assisting the members and the ED in its evaluation.
- Committed members are all volunteers and selected based on their experience and contribution.
- At the moment, ViC has vetted over 15 angels from various sectors and industries with global network access. This number is continually growing. ViC hopes to add on 10 new members annually. Our target is to have at least 30 angel investors by 2012. We feel that this is an achievable target, when compared to Shanghai Angels which was started in 2007, has between 40 to 50 angel investors. ViC Angels are usually between the mid-30s to mid-50s with extensive business experience. Most are also investment savvy. At the end of the day, our angels must have the means to invest and be willing to mentor/coach/guide the companies that they are investing in. This is what we termed as meaningful value-add. There is no membership fee in ViC and new members are invited to join by existing members. All potential angels will be vetted by the ViC Committee Members responsible for membership.
- To assist in making investment decision, ViC has a panel of advisors from various backgrounds. Most are domain experts in the respective areas and have extensive business experience.They are people who keen to contribute and is offering their time on a voluntary basis.
- Since, the investors invests at the very early stages of a company, we advise for short term (1 to 3 years), the best exit would be to exercise the put/call options. For investors that are more willing to commit to the long term, IPO could be an option.
- There will be a nominal fee of RM500 for investment proposal to be submitted to ViC. We estimate to vet through an average of 10 proposals a month. There will also be a 5% commission for projects that have successfully by invested by ViC angels. Initial target will be 2 investment per year (given our initial membership numbers), each investment valued at least RM250,000. Although ViC will focus predominantly on securing investments, we are also considering organizing investment related events where proceeds could become one of the revenue source.ViC is also actively looking for sponsors. Currently, Cradle Fund SdnBhd has been confirmed as a sponsor for the group.
- As promised, this is a short presentation and if there is any question. Do send me an email or just talk to me during the lunch break.Before I hand over the microphone, I will like to thank you all for your support and time. Thank You!