Our Angel Investing Masterclass – Photo credits to AngelCentral

Recently I was taking a course on Angel Investing conducted by Der Shing, Shao-Ning and Teck Moh at AngelCentral (who I sort of consider as my mentors in this area). I finally understand what makes angels tick and more importantly it reinforces something for me as well, “Don’t offer messed-up deals, you will screw your own name over.”

Unlike in the USA, where 1 out of 1100 persons are accredited investors (i.e. angels), in the ASEAN region, there is only 1 out of 10000 persons who are. The angel investor community is very small, and you don’t want to spoil your name in this community. Everyone knows what’s going on.

There was a particular case that was brought up during a startup pitch competition, and one of the panelist who’s an angel investor or venture capitalist (I can’t remember which is it) made an offer of $15k for 30% of the company. I find that really distasteful, and I’m really open about it (no qualms). When I heard that, I was like, “seriously?!”. As much as we as investors want to minimize downside and maximize upside, let’s not screw the entrepreneur over. After all, it is his/her blood, sweat and tears we’re talking about. Realistically speaking, I asked myself, “Is $15k gonna be enough? I don’t think so. So how is the entrepreneur going to raise the next round of funding? He/She will get screwed over by this type of investors!” This is what I call devil investor/vulture capitalist (pun implied). What if the entrepreneur took the deal because he/she really needed the money for the company’s cash flow. These are people’s lives we’re talking about here. Let’s give them the respect that they deserve, thank you.

Let us work together and create a vibrant startup ecosystem in the ASEAN region so that everyone can grow.

Peace.

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