KUALA LUMPUR: The Asian Business Angel Forum (ABAF), to be held in Malaysia next year, is expected to help revive the local angel-investor segment.
Nazrin Hassan, chief executive officer of funding agency Cradle Fund Sdn Bhd, said angel investments here ground to a halt in 2004 after many early angels got burned when they invested in the technology sector.
“The first generation of angels made their fortunes in traditional sectors, such as banking or real estate, and many of them did not really understand the nature of the (tech) business they were investing in,” he said.
Currently, Malaysia has two known angel networks — The Virtuous Investment Circle (ViC) and the Pikom Angels.
Nazrin said the today’s angels have better knowledge of the industry they are investing in because they come from that industry.
Instead of merely pumping money to the development of new and innovative products, he said, the new breed also have the potential to share their knowledge and experience with their mentees.
He said such valuable knowledge is an asset these days because it will aid in bringing technopreneurs to the next level.
“Getting them to the commercialisation stage used to be a challenge but not anymore. It’s now about helping them to sustain their business,” Nazrin said.
Nazrin said ABAF can serve as a platform where angel investors can share their experiences with tech companies.
With angels from all over the world convening under one roof, Nazrin said, their local counterparts can learn from the more experienced ones.
“The event can also increase awareness of the tremendous deal flows that can be found in Malaysia,” he said.
Nazrin said many investors are not aware of the potential of Malaysian innovators and the event will be able to correct this.
Cradle is also taking its own initiative to grow the local angel-investor scene. It has been lobbying for a tax break to encourage more successful businessmen to become angel investors.
Nazrin said similar incentives have worked in Britain. He said that in the 1990s, there were no proper incentives to invest in technology, which was considered a high-risk investment.
The British Government then introduced a tax break for angel investors, and did a nine-month nationwide roadshow to educate investors about angel investing.
“Gradually, over about five years, Britain’s angel network started growing and to date the country has about £2bil (RM10bil) in angel investments,” he said.
Cradle hopes that a similar incentive can be introduced in Malaysia.
“The British Government loses about £180mil (RM900mil) to angel tax-breaks but the returns are generally higher,” he said, adding that the tax break is a crucial component in spurring angel investment in the country.
ABAF is planned for May, next year and Cradle is expecting about 200 angel investors to attend the event. — JO TIMBUONG
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