Mr Leslie Loh, currently a partner with Extream Ventures Pte Ltd with direct investment portfolios including Nextview Pte Ltd and Lithan Genovate Pte Ltd, kick started the session as the first Speaker. He was the Founder, Chairman and CEO of System Access, which he grew from a one-man outfit to a public listed global banking software organisation with 10 offices and 500 staff in Europe, Asia and Middle East. The company was subsequently sold to a leading global financial services software provider SunGard Data Systems Inc. from the US. Fiancé

Mr Loh highlighted the following important attributes as an Angel Investor:

Risk, return and the investment horizon
Angel investing involves a long-term horizon which investors must have the patience to stomach. The risks are no doubt high and to mitigate the risks, an angel investor should venture into businesses that he is familiar with and able to contribute his expertise. It is also important that the investor is able to foresee an exit strategy within an estimated 6-8 years time after assessing the startup’s operations, products and markets. A minimum return of 5 times the investment should be generated to justify the level of risk in startups.

Risk profile
An angel investor takes on different risk profiles when investing at different stages of a start-up typically below 5 years old. For instance, although startups in their early stage may present potentially higher returns as compared to those already in the commercialising stage, investors could realise the return from a late-stage startup with more certainty. Thus, angel investors must select an optimal entry level that they are comfortable with.

Mr. Tan Kai Hoe, Deputy Chief Executive, SPRING Singapore
Mr Tan explained that the broad principle of developing the tax deduction scheme is to supplement the existing schemes in the market rather than create a crowding-out effect on VCs and private investors. The scheme was devised when a gap has been identified whereby startups lack early stage funding. The government will continue to assess the landscape and revise the level of grant where necessary. Mr Tan also said that entrepreneurs often encounter challenge in selling their technology as they fail to consider the market potential during development. It is better for the entrepreneur to obtain a sense of the market value of the technology as early as possible.

Mr. Leslie Loh, Partner, Extream Ventures Pte Ltd
Mr Loh highlighted past schemes with matching grants and buy-out options like SEEDS and the current tax deduction scheme which Angels could leverage on to reduce their risks and increase their returns for each dollar invested. Although there are a variety of government schemes providing incentives, each scheme caters to varying product stages; from development to commercialisation, the entrepreneur should select the scheme based on the kind of support he/she needs.

When enquired on the evaluation methodology to calculate returns on an exit strategy, Mr. Loh indicated that the evaluation parameters are limited for early-stage startups. Instead, he recommends benchmarking the exit value with the Initial Public Offering (IPO) of a similar investment. This is possible if the Angel is familiar with industry. Mr. Wong added that Angels are not necessarily driven by only financial gains, but also other non-financial aspects such as passion in the business and playing the role of mentors.

Mr. Matthew Tan, CEO, SIF Technologies Pte Ltd
Mr. Tan shared that it is important for the entrepreneur to maintain at least 51% of shareholding during the start-up phase of the business, to ensure that he/she is in control to steer the business. He concluded that as startups becomes savvier; they look beyond investors who provide only funding and seek those who have the necessary knowledge and networks to help them grow. He cites his own experience when his angel investor was a CFO in training and helped his company establish sound corporate governance and cash-flow management system, both of which benefitted his company greatly.