Malaysia and its surrounding region offer abundance of
investment opportunities for angel investors looking for the next innovative
startups with global capabilities.
There are already some success stories, but there is still much
untapped potential.
"Angel investments are thriving, as the startup ecosystem is
more vibrant than it was 10 years ago,”
"There are many investing opportunities and plenty high net
worth individuals in Malaysia and Asean, but there is still a lack of
understanding of what angel investing is all about,"
One of the challenges in the angel investing scene is rising and
ungrounded valuations due to the euphoria surrounding the startup ecosystem.
Entrepreneurs have high expectations of their companies, which
explains the tendency to push valuations higher.
Indications from the turnout during MBAN's pitch events suggest
that interest for angel investments is still strong, though investors are
waiting and searching for a high quality deal flow with reasonable valuations.
"Hopefully, as private investments get stronger, it does not
just plug the gap, but overtake public funding.
"When that happens, it would be the most appropriate thing,
simply because private funds want to invest to make profits, and the cycle will
continue on.
"The government, other than catalysing growth, has no business
in this space because it is not scaleable or sustainable,” said Razif.
Private investments like angel investment, equity crowdfunding
(ECF) and peer-to-peer lending are means for startups to plug the gap of
limited government support and insufficient capital from the founders.
An advantage that angel investors benefit from is tax incentive
for investments in high growth technology industries with innovation.
This is because there is a higher need for funding in tech
companies, but this can be expanded to other industries.
Razif said measures such as making changes to tax incentives and
simpler regulations would certainly spur angel investments.
In fact, MBAN is lobbying for tax incentives for non-technology
related investments.
Besides that, Razif noted that the Securities Commission is
working on developing an unlisted market for startups, unlisted companies as
well as small and medium enterprises (SMEs) to provide liquidity for private
investors.
For angel investment to gain more traction going forward, Razif
opined that there has to be more success stories and exits.
"The interest to be angel investors will be generated when
people see success stories or results, as the preconceived notions are that
start ups have high failure rates.
"However, they need to understand that successful exits take
time,"
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