Malaysian Business Angel Network launches, accredits angel investors for tax breaks

The early stage funding gap is a common problem across Southeast Asia and various methods have been applied by the stewards of the local economies and public monies in an attempt to plug this gap. In Singapore and Malaysia, we’ve had both governments dish out generous grants to startups, sometimes on its own, sometimes in partnership with private investors who are given a lot of leverage.

(Read this overview of angel investing in Singapore by the Chairman of the Business Angel Network Southeast Asia (BANSEA) and this map of startup money in the country.)

We’ve also seen tax breaks given to angel investors in Singapore and to come in Malaysia.

Another way to shore up early stage investment is to facilitate the flow of information: dealflow, on-the-ground market information and due diligence-level of information. How this has been done is to create formal and semi-formal networks of angel investors just like the Business Angel Network Southeast Asia (BANSEA) – which was formed 11 years ago and has informal ties with many other angel groups around the region and globally.

This time, Malaysia will see its own angel network as Cradle, an agency under the Ministry of Finance that manages the RM 100 million (USD 32.7 million) Cradle Investment Programme officially launches the Malaysian Business Angel Network (MBAN).

According to DigitalNewsAsia,

“MBAN is an umbrella body that would function like a trade organization, driving regional and international linkages between angel investors. It would formalize and coalesce angel investment in Malaysia – currently informal and somewhat unstandardized.”

The report continues with a quote from Nazrin Hassan, CEO of Cradle,

“MBAN would lead the voice of private sector angels for Malaysia and become their platform for engagement and action, both for the domestic and international community and to help develop the angel capital market within the country.”

MBAN, is however, not the first angel-focused group in Malaysia. Cradle has previously also helped in the creation of the Virtuous Investment Circle (ViC). (Find out how ViC sees itself as fitting into the Malaysian scene amidst government funding bodies like Cradle and MDeC.)

What is different is that MBAN will offer formal accreditation of angel investors which will then allow them to make use of the aforementioned upcoming tax break scheme. Unsurprisingly, to attain accreditation as an angel investor, the individual has to have a certain lower limit of net worth but also with relevant experience so that investees can look to them not just for funding but for strategic advice and help too.