The Malaysian Business Angel Network and Angel Investing in Malaysia

The idea of an official body to represent private investors was first mooted by the Government in 2010 to complement its efforts to address the gap in early-stage funding for start-ups by mobilising private funds. The rationale was for private funds to augment the Government’s own efforts in early stage funding. The initiative was placed under the care of Cradle Fund Sdn Bhd (Cradle), a Ministry of Finance owned agency and leading early stage ecosystem influencer in Malaysia. Cradle was to help jumpstart angel investing in Malaysia and develop the ecosystem around it.

Early successes were the establishment of Virtuous Investment Circle (ViC) an angel network formed with Cradle’s support. This was followed by the formation of other clubs such as the Angels Chapter at the National ICT Association or Pikom.

Cradle first announced the establishment of the Malaysian Business Angel Network (MBAN) at the Asian Business Angel Forum 2012 (ABAF 2012) in Kuala Lumpur in May 2012 before officially launching it on 18 December of the same year, officiated by Dato’ Seri Ahmad Husni Mohamad Hanadzlah, Minister of Finance II. MBAN saw 7 individual angel investors accredited in its maiden launch year while Vistage Angels became the first angel club recognized.

Significantly, ABAF 2012 saw discussions around the provision of tax incentives to incentivize angel investors to jump in and start investing in early stage entrepreneurs. Among others, Professor Richard Harrison, immediate past Dean of Queen’s University Management School and presently the Chair in Entrepreneurship & Innovation University of Edinburgh Business School spoke about such incentives being available in the United Kingdom for the past 30 years and how they have contributed greatly to the growth of the angel investing community there.

The Malaysian Government announced its own angel tax incentive in the National Budget for 2013. Effective from 1 Jan 2013 the tax incentive provides for a tax relief of up to RM500,000 per annum, in the third year of shareholding, for equity investments made in a qualified technology company or a series of companies. To qualify for this incentive, the angel investor must be accredited with MBAN.

By late February 2013, Cradle officially handed over the running of MBAN to the private sector. The inaugural ‘private sector’ MBAN Council came under the leadership of Mr Richard Wong, founder and ‘chief listener’ of Vistage Malaysia while the founding Council Members were:

1.     Richard Wong, President;

2.     Puan Nor Azlina Binti Datuk Ishak;

3.     Mr Lok Choon Hong;

4.     En Azrai’ Shuib;

5.     Mr Lim Ee Weng; and

6.     Ms. Sherine Cheng

Following fund infusions from the Government and a revitalized Council led by Dr. Sivapalan Vivekarajah of Proficeo Ventures in 2015, MBAN became more active in the market and quickly established itself as the ‘go to’ organization for all things angel investing in Malaysia.

Meanwhile, despite handing over the reins to the private sector, Cradle remains involved in the development of the angel investing in Malaysia as it provides MBAN with Secretariat support and, more importantly, retains responsibility over matters relating to the administration of the angel tax incentive (accreditation of angel investors etc) via its Angel Tax Incentive Office (ATIO), a unit within Cradle.

To this day, Cradle remains MBANs primary partner and collaborator working together hand-in-hand in advocating angel investing in Malaysia reflecting the excellent synergies offered by their respective roles within the ecosystem – the former focusing on early stage entrepreneurship, while the latter on early stage private funding.

About the Malaysian Business Angel Network

The Malaysian Business Angel Network (MBAN) is the official trade association and governing body for angel investors and angel clubs in Malaysia. It is registered with the Registrar of Societies in accordance with Section 7 of the Societies Act 1966 with the Reg. No. PPM-016-14-03122014 on 03 December 2014.

It is a private sector led, not-for-profit organisation that focuses on accrediting individual angel investors and angel clubs promoting and creating awareness for angel investing, building capacity amongst its members as well as sourcing and managing ‘deal flow’ for the same. MBAN is presently privately funded via sponsors e.g. Hong Leong Bank Berhad (Exclusive Bank Sponsors).

MBAN’s vision is to become the official voice of the Malaysian angel investor community as well as a platform for engagement and knowledge sharing for domestic, regional and international angel investors. It advocates an angel investing agenda that is all-inclusive in manner for the benefit of its members, the angel ecosystem as a whole as well as entrepreneurs and start-ups.

MBAN is a member organization of the Global Business Angels Network (GBAN) and a founding member of the ASEAN Angels Alliance, a collaborative platform of angel groups operating within the ASEAN region (see www.aseanangel.com).

For any inquiry regarding MBAN, the angel tax incentive or angel investing in Malaysia, drop us a line at [email protected].