THE EMERGENCE OF ANGEL INVESTMENT NETWORKS IN SOUTHEAST ASIA - AVPN

THE EMERGENCE OF ANGEL INVESTMENT NETWORKS IN SOUTHEAST ASIA

Report I A good practice guide to effective angel investing

Table of Contents

PART I | ANGEL INVESTMENT NETWORKS IN SOUTHEAST ASIA: A FIRST LOOK

List of Figures Foreword Acknowledgements Research Objectives Research Methodology Research Limitations

1 2 3 4 5

Table of Contents

A first look at Angel Investment Networks in Southeast Asia 1.1. The development of Angel Investing in the US and Europe 1.2. The emergence of Angel Investment Networks in Southeast Asia 1.3. Angel Investment Network dynamics in Southeast Asia 1.4. Measuring country market maturity in Southeast Asia

Key functions of Angel Investment Networks 2.1. Convenor and hub 2.2. Transaction support

2.2.1 Basic services 2.2.2 Value added services 2.3. Education & training 2.4. Advocacy and thought leadership

The Taxonomy of Angel Investment Networks in Southeast Asia 3.1. Degree of formality 3.2.Management 3.3. Group structure 3.4. Business model 3.5. Operating mediums 3.6. Investment structure

Founders of Angel Investment Networks in Southeast Asia 4.1. Internal and external drivers 4.2. Local and foreign founders

Investors Served by Angel Investment Networks in Southeast Asia 5.1. Features of Angel Investors in Southeast Asia

5.1.1 Investment stage 5.1.2 Investment capacity 5.1.3 Portfolio profile

04 05 06 07 08 09

11 12 12 13 14

15 16 16 17 17 17 17

18 19 19 20 21 22 22

23 24 25

26 27 27 28 28

02

Table of Contents

PART I | ANGEL INVESTMENT NETWORKS IN SOUTHEAST ASIA: A FIRST LOOK

5.1.4 Super Angels

28

5.2. Personas of Angel Investors

29

5.3. Motivations of Angel Investors in Southeast Asia

30

6

Who Angel Investors invest in: entrepreneurs and start-ups

31

6.1. Entrepreneurs engaging with Angel Investment Networks

32

6.2. Entrepreneurs seeking angel investment

33

6.3. Market positioning of Angel Investment Networks in Southeast Asia

34

7

Zooming out: the ecosystem surrounding Angel Investment Networks

35

7.1. Deal flow developers

36

7.1.1 Accelerator and incubators

36

7.1.2 Institutional investors

36

7.1.3 Knowledge institutions

37

7.1.4 Other Angel Investment Networks

37

7.1.5 Philanthropic capital

37

7.2. Policy and regulations

37

7.2.1 Policy makers

37

7.2.2Regulators

37

7.3. Network partners

37

7.3.1Network

37

7.3.2Media

37

7.4. Support services

38

7.4.1 Financial intermediaries

38

7.4.2 Legal firms

38

7.4.3 Software as a Service (SaaS)

38

8

Challenges faced by Angel Investment Networks

39

8.1. Internal challenges

40

8.1.1 Management and leadership

40

8.1.2 Member and user engagement

40

8.1.3Monetization

41

8.2. Market competition

41

9

Conclusions

43

10

Recommended further research

44

Glossary Appendix A: Active Angel Investment Networks in Southeast Asia Bibliography

Table of Contents

47 50 56

03

Table of Figures and Tables

Figure 1: Regional Presence of Angel Investment Networks

Figure 2:

Regional Angel Investment Networks classified according to degree of market maturity

Figure 3:

Key functions and associated value propositions of Angel Investment Networks

Figure 4: Transaction support offered by Angel Investment Networks

Figure 5: Classification of Key Attributes of Angel Investment Networks

Figure 6:

Overview of investing landscape and investor segmentation in Southeast Asia

Figure 7:

Investment capacity of investors in Southeast Asia at pre-seed, seed and later stages

Figure 8: Personas of Angel Investors in Southeast Asia

Figure 9: Financial and personal drivers of Angel Investors in Southeast Asia

Figure 10:

Reasons entrepreneurs seek investment from Angel Investment Networks

Figure 11:

Entrepreneurs seeking angel investment according to category of enterprise

Figure 12:

Market positioning of active Angel Investment Networks in Southeast Asia

Figure 13: The ecosystem surrounding Angel Investment Networks

Figure 14: Pressure points mapping of Angel Investment Networks

Figure 15: Overview of competing players in the early-stage capital market

Table of Figures and Tables

04

Foreword

Southeast Asia has become one of the fastest-growing markets over the last decade, attracting many talented entrepreneurs to start new businesses in the region. However, numerous studies indicate that social enterprises and women-centered businesses experience greater challenges to grow due to insufficient access to relevant financial and technical support. Angel investors play a critical role in expanding the pipeline of investible businesses by providing early-stage ventures with essential resources including capital to bridge the funding gap and by sharing their expertise and networks to unlock business opportunities that facilitate growth.

In conjunction with the steady rise in the number of angel investors in the region, the practice of angel investing has also been increasingly structured through the establishment of Angel Investment Networks. The proliferation of Angel Investment Networks has led to more coordinated efforts to streamline angel investments, often resulting in larger-scale deals into early-stage ventures. These networks have a considerable part to play in the investment spectrum by advancing co-investments, reducing the risk borne by individual investors, and coordinating support to help enterprises to scale to the level where they can access larger sources of growth capital provided by other private sector investors such as venture capitalists and impact investors. These recent developments across the region are a positive sign of the important catalytic role angel investments play in the early-stage investment landscape.

This report by the Angel Investment Network Indonesia (ANGIN) and the Sasakawa Peace Foundation (SPF) is the first of its kind to understand the landscape of Angel Investment Networks in Southeast Asia and explores the challenges and opportunities for angel investors in the region. The report also places a special focus on Gender Lens Investing and the drivers for angel investors to make gender-focused investments to contribute to the development of an inclusive entrepreneurial ecosystem in Asia.

Working with local partners, SPF has implemented a wide range of initiatives to support inclusive and womencentered businesses to grow, contributing to the development of sustainable market-based solutions that bring value to women across Asia. We hope that this report will highlight the opportunities for angel investors and net worth individuals to realize their potential as key contributors in supporting inclusive, impact-orientated businesses, and leverage their resources to efficiently create greater, long-term social impact in Asia.

Foreword

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