The Mekong Angel Investment Network (MAIN), launched in June, aims to bring as many as 1,000 angel investors to the lower Mekong countries (Vietnam, Laos, Cambodia and Myanmar) every year to tap into the region’s small yet vibrant entrepreneurship ecosystem.
The network’s goal is to start the angels program within the next five years, said David Beatty, an Irish-born American entrepreneur and investor and head of Gaingels LLC and Digital Irish Angels. Beatty, an angel investor under MAIN network, is also a member of US-based early stage investment firm Golden Seeds.
“We don’t have time to waste. There are huge opportunities here and a lot of people that need help,” he told DEALSTREETASIA. “In order to influence the ecosystem and make a change, if we could bring a thousand successful business people into the region every year, each of whom has a commitment to invest, it will be money well spent.”
Beatty said that many entrepreneurs in the lower Mekong area need to know the art of doing business. To be specific, they are desperate for access to people who play at a higher level.
“That’s the only way that will drive the new entrepreneurial ecosystem here, as well as support people to create wealth and ultimately find themselves re-investing in the ecosystem,” Beatty said.
By doing so, MAIN – a programme started by the Asian Development Bank’s Mekong Business Initiative (MBI) and Vietnam-based Lotus Impact Fund, with financing from the Australian government – is securing sustainable operations in the long term.
“The team at MBI is one of the most innovative in the development space. They are open and willing to try risky ideas,” said Steven Landman, CEO of Lotus Impact Fund.
Around 200 angel investors from the US, Australia, New Zealand and Eastern Europe, in addition to local investors in the region, have joined MAIN. Twelve of them are ready to make investments, according to Landman.
Since the launch of MAIN three months ago, a couple of Cambodian and Vietnamese startups have bagged funding from the participating investors. One company in Cambodia is doing due diligence for up to $100,000 from five investors, while Phnom Penh-based online bus ticket platform Bookmebus has received investment from 12 investors, Landman said.
“One of the ways we can drive economic prosperity is working with early stage companies to build their enterprises. […] When you make an investment, you make a commitment bringing not just money but also your knowledge and network, to increase the likelihood of success for the companies. Hopefully the entrepreneurs we invest in today will be able to provide mentorship to future entrepreneurs,” Beatty echoed the goal of the angel network.
That will not happen overnight. But the investors are bullish about this region, thanks to its rapid growth and early stage activities taking place. “There are tremendous opportunities in this region for making a higher return on investment than anywhere else in the world,” Beatty told DEALSTREETASIA.
Kurt Brungardt, a former executive at Michael Dell-led MSD Capital and founder of US-focused private equity firm Swifte, who has joined MAIN, added: “I am here because of Steven’s and David’s vision. […] It will take some investment until we get to a place where it’s self-sustaining. And the region has that potential.”
Not an easy road to walk
Angel investing has never been a bed of roses. “I see a lot of enthusiasm and passion but I haven’t seen too many great ideas and experience within startups. We are struggling to find investable companies,” Landman said.
“Startups are particularly weak. But the expertise of the seasoned angel investors can be helpful with financial planning, operational planning and business strategy if the companies want to scale up,” Thomas Moyes, project director of the MBI, told DEALSTREETASIA in a recent interaction.
With the foundation of MAIN as a region-wide network, investors are hoping there will be more worthy investments stemming from the four countries, they said during a recent meeting in Hanoi, Vietnam.
Dubbed “Angel investing without border”, the discussions during the event acknowledged the importance of the synergy of collaboration, for which international business people are invited to work with local investors.
The issue of trust is at the same time fueled by underdeveloped legislation system for angel investing in the region.
“In these (lower Mekong) countries, those corporate governance issues remain fairly weak, and there are also differences on papers as to what actually happens in reality,” said Dominic Mellor, regional head of the MBI.