Since 2022, early stage investing in ASEAN has been going through a funding winter with ever declining funding numbers shown by annual ecosystem reports and surveys. AngelCentral’s members investments have also shown a similar pattern from 2022 to 2025H1 (AngelCentral Annual Review 2024) Despite this, our club continues to advocate for this asset class, as angels are an essential component of any thriving startup ecosystem.
Early-Stage Risk Capital
Angels are usually the first outsiders to invest in a startup after founders, their friends and family. Angels are the critical, very early stage support to founders as they grow their businesses to reach a stage where institutional investments will step in. At this earliest stage of company life, a typical amount of 300-500K is usually required by founders and this is too small for most VC funding. It’s also too risky for many institutional funds to fund when there is zero to minimal revenue. (Difference between VCs and Angels). As such, Super angels and/or angel syndicates play that critical role in the ecosystem to provide the much needed early financial support.
Smart Money & Experience
Many angels are often entrepreneurs themselves or senior industry veterans. They bring with them their domain expertise and experiences, professional network and insights, which are often invaluable to founders. If well paired, startup founders receive not just dollar investments, but also mentorship, industry introductions, and credibility from the angels’ involvement.
Ecosystem Recycling
While I think of it as paying it forward, it’s really the ecosystem recycling its resources and knowhow. After we exited from JobsCentral, Der Shing and I spent time mentoring founders before we decided to start up AngelCentral as a platform to better address early stage funding pains. And we are not alone!
On top of investing financially, #SteveMelhuish has combined his personal impact intent and founding experiences and worked along like minded VCs to support climate centric startups. #MarcusTan, while still actively managing Carousell, is now spending time with ACE to support the Singapore startup community; #LimQingRu, the super woman juggles home, venture funds, board seats and personal angel portfolio after her exit from Zopim/Zendesk.
VCs focusing on Later-stage companies
Another reason why angels are critical to keep our ecosystem going is due to the natural evolution of the VC industry. Singapore had 30+ seed stage VCs in early to mid 2010’s. As the VCs grow, they moved into their second and third funds which had much larger AUM and they rightly focused on larger cheques for series As and beyond. This practical move by many successful VCs directly reduces the funding availability for pre-seed and seed stage startups. Good angels are thus needed to step in to fill the void.
The demand for angels is strong, but the “supply” however has not been high. Despite the thriving startup scene since early 2010’s, our angel scene has not really followed the pace. The pool of active angels in SEA has remained limited compared to the US, China, or even India. Some key reasons:
Wealth & Liquidity Gaps
Many wealthy individuals in SEA are from family business backgrounds. Their capital is tied to traditional industries (real estate, trading, manufacturing) and they tend to invest rather conservatively.
According to wealth reports published, we guesstimate that there are about 100,000-150,000 people in ASEAN who are very high net worth individuals (VHNIs, of >5m USD net worth) in Southeast Asia. Given the high risk nature of angel investing and from interactions with our Masterclass attendees, we estimate ~5% would have the risk appetite for this asset class. That gives us no more than a few thousand potential angels in our entire region.
Equally important, unlike in the Silicon Valley and other markets, SEA hasn’t seen a long history of tech founder exits. This means the usual stereotype of exited founders and employees who can set aside a million or two to invest back into startups is sorely missing here.
Risk Appetite & Culture
Startups ARE a very high-risk asset class (illiquid, binary outcome, and long duration) compared to properties or stocks. Given the preferences towards wealth preservation of many Asian investors, early stage startup investing is too risky for most of our HNIs. Moreover, many in SG have had a good experience with property investments and so will always compare. Not many ASEAN HNWI will embrace an asset class where within 2-3 years, 50% or more of their investments could be worth zero or near zero.
A key concept that we emphasize in our angel investing master workshop is that investors need to diversify their portfolio both at asset allocation level and within each asset class.
Investors must conscientiously think through and strategize on the risk/reward of various assets, how much to allocate for each asset class and how one should further diversify within each asset class. 
When done properly and with discipline, diversification and proper allocation and bite sizing will allow angel investors to manage and mitigate their risk while maximizing their return.
Knowledge & Access
After numerous workshops and interactions, we find that many investors still find the idea of asset allocation and risk management new. Hence, most investors fall back to what they are familiar with, ie properties, stocks and shares. Private equities, let alone angel investing, is not something they are instinctively comfortable with.
To make matters worse, angel investing requires active learning and doing. The process can be opaque and deal flow can appear to only go to those in the know. While property plays or stock buys are familiar investment activities, many potential angels don’t know how to evaluate startups or even structure deals. (Angel Learning: Deep dive into deal terms. )
Fragmented Ecosystem
The SEA market is diverse – 5-6 key economies and each with its own language, unique culture, regulatory environment and markets. This not just poses a challenge to startup scaling, but also makes it hard for angels to access decent quality deal flows and successfully build a regional portfolio.
Finally, when it comes to government help, few SEA countries offer tax incentives for startup investments (unlike the UK’s EIS/SEIS schemes). Laws on syndication are also unclear so angels need to make sure they are not dealing in securities or fund managing when they join and create angel syndicates to co-invest in startups.
So where do we go from here
To recap: Angels matter greatly because we are the spark plugs of the startup ecosystem. We fill a much needed knowledge, network and funding gap for young startups. Many like minded people across ASEAN markets recognise this. Here are some angel clubs from the region and they have been doing their part and with good market support:
- Philippines: Manila Angel Investor Network
- Malaysia: Malaysia Business Angel Network
- Indonesia: Angel Investment Network Indonesia
Good startups are essential to push the market and economy forward. They need the support from angel investors. For all who are interested to find out more about angel investing and how to be a good solid angel investor, check out the AngelCentral Master Classes and our Deep Dive learning series. Afterall, it’s a risky asset and you have to manage the risk well to get a good outcome and experience. A good way will be to learn and leverage on other like minded angels. Check out our workshops coming up.
