With better economic growth forecasts from the World pegged at 7.2 percent at the end of the year, investors may well ride the waves of a recovering tide of investment and consumption.
As startups pop up in different industries, one after the other, so do angel investors. An angel investor is a high net-worth individual who provides capital for startups, usually in exchange for equity in the company.
“Seeing the business take shape and grow into a real revenue contributor, was an exhilarating experience,” Alfonso “Chito” Zulueta, angel investor and chief executive officer of CZ Ventures, a venture capital firm, relates his first attempt in angel investing.
Certainly, angel investing is no easy feat. It is a combination of business acumen, willingness to take risks, and networking.
Fret not, however, because here are four tips to help you start your angel investing journey from certified angel investors:
A seven-time serial entrepreneur, engineer, architect, and philanthropist, Claus Karthe, chief executive officer and founder of German Entrepreneurship Asia, says “A startup is more likely to achieve success if he/she is willing to listen, learn, adapt, and act on advice from those who have either succeeded or failed in the market they are venturing in.
Rapid changes in business and technology means that angel investors have to be adaptable and not so ossified with rigid ways of doing business.
Apart from providing funding for startups, angel investors share their business expertise to contribute to startups’ growth. While new ideas are great, an angel investor has to understand them for them to work.
The business model is but a machine run by motivated individuals with success as a goal in mind. It is people, in the end, that maintain the business.
Adjacent to the founders’ drive for success, Lara Lorenzana with a 20-year experience in investment banking and structured finance in Manila and New York says that “The startup must demonstrate to the investor that the money entrusted to the founder is used wisely and as promised.”
Having a keen eye for people, successful angel investors do not simply look for profitable business models, but people who they can trust with their money.
To mitigate the risks, investors can join an investment network that pools capital together, screens startup applications, and provides investment training and support. Among notable networks in the Philippines is the Manila Angel Investors Network (MAIN) a, group of private investors that is actively supporting several startups.
“Angel investing is less daunting when you do it with a group that shares the same due diligence as you,” Karthesaid.
Seeking to bank on the Philippines’ expected growth, Lorenzana said that she and her husband, a seasoned investor from New York, returned home from the United States to invest in what she describes as “Our generation’s land of opportunity. With MAIN as our guide, we hope to apply what we learned and observed in the U.S. to the Philippines.”
“I joined MAIN because of a desire to be close to the startup scene, to listen to new ideas, be around optimists who dream of a better world and are actually doing something about it, and to contribute in whatever way to help them achieve those goals,” Bautista said.
If you want to get to know more about MAIN, Gundry has some advice for you: “Attend MAIN’s pitch night where you can listen to a few startup pitches. Get a sense of what is on offer because startup investing is different from investing in traditional, mature businesses.”
MAIN conducts various activities geared towards promoting knowledge and expertise sharing among angel investors, new and old, and even for startups. For updates on their activities and if you are interested in angel investing, reach out to [email protected] and become part of the Philippines’ largest and most active angel network.