Cradle and Angels Den launch the Ideas2Invest ‘hack-celerator’
By A. Asohan October 3, 2013
- i2i all about ideation, innovation, creation, validation and raising funds, all within nine days
- Early stage investment players have pledged more than US$300,000 in pre-seed funding
CRADLE Fund Sdn Bhd, in association with Angels Den Asia, has launched Ideas2Invest (i2i) which will bring together entrepreneurs, developers, investors, mentors and coaches over an intensive nine-day programme the two parties are describing as a ‘hack-celerator.’
An amalgamation of the words ‘hackathon’ and ‘accelerator,’ i2i combines hackathons, pitch sessions and commercialisation/ investor workshops under one venue, Cradle chief executive officer Nazrin Hassan (pic) told Digital News Asia (DNA) via email.
“Cradle, through its 10 years in the local startup scene, has built a network of technical and business mentors, coaches as well as commercialisation partners in the form of SMEs (small and medium enterprises), GLCs (government-linked companies) and MNCs (multinational corporations).
“This event will bring together major names in the Malaysian tech industry such as Telekom Malaysia, Axiata, IBM and Microsoft, along with investors such as The Star, which has kicked off The Star Accelerator Fund – as well as new and established angel investors, to witness first-hand the ideation and ‘productisation’ process which all tech startups go through,” he said.
i2i, which kicks off on Friday (Oct 4) and runs till Oct 12, is one of the satellite events of the Global Entrepreneurship Summit (GES), which will take place in Kuala Lumpur from Oct 11-12. US President Barack Obama was originally scheduled to deliver the keynote address at GES, but had to pull out because of pressing issues at home.
The focus of this inaugural edition of i2i is on cloud-based products and services. “Cloud or Internet-based products are ‘asset-light’ but with the potential to be promoted, market-validated and sometimes even sold to a larger audience, thanks to social media,” said Nazrin on the choice of theme.
The i2i hack-celerator also aims to give potential investors an inside look into the passion and hard work of the entrepreneurs and developers who participate.
“They usually miss out on this part of the story in any normal 10-minute pitching session,” said Nazrin.
“Through the planned fireside chats and regular contact during and after the hack weekend, Cradle hopes that the corporate partners will get a better idea about the products they are interested in funding, and be open to offer developers a solid path to market these ideas,” he added.
Raiyo Nariman, managing director of Angels Den Asia, a company that helps entrepreneurs, startups and SME owners raise the capital required to take their businesses into high growth, stressed that i2i is not about re-inventing hackathons or improving pitching programmes, nor is it a competition.
“I am at pains to ensure that we are not viewed as a competition. We have the support of a number of players in the early stage investment scene who have pledged over RM1 million (more than US$300,000) in pre-seed funding, to back new opportunities that spin out of i2i.
“i2i is therefore all about ideation, innovation, creation, validation and fund-raising, all within the space of about a week,” he said.
Nariman said that Angels Den Asia and Cradle Fund designed i2i to achieve a number of outcomes that both organisations felt were important to support the early stage community in Malaysia:
It is common for new founders to focus solely on developing their technology or product, which invariably means they develop a product that their mothers love, offering them a potential market size of one – their loving mother.
We are keen to have new and would-be founders direct as much of their focus on the development of the commercial potential of their new venture, as they do on the technical development.
i2i aims to achieve this shift in perspective via fireside chats around key commercial topics from experts and ‘grey hairs,’ one-to-one coaching sessions (with both seasoned entrepreneurs and current founders), and support and advice from some of Malaysia’s key companies.
2) Introduce newbie angels
The concept of angel investing is gaining more traction in Malaysia, with more people – both high net-worth individuals and professionals – looking to enter the space, but not knowing how to do so.
So, while we will have experienced investors looking to back new opportunities that spin out of i2i, we have a specific programme focused on knowledge-sharing to introduce key concepts of angel investing to these ‘newbies,’ with local and some international angels who are taking part.
3) Bring in the MNCs
‘Innovation by startup,’ whereby large MNCs focus on buying in innovation (product, technology, market access, etc.), is gaining a lot of traction in the United States, with a number of large technology firms creating their own venture funds, accelerators and incubators.
We are keen to share this view with the technology firms in Malaysia, and via i2i we have the commitment from a number of large companies, such as Telekom, Axiata and Microsoft, that are supporting, and participating in i2i, with a view to identifying potential opportunities that fit their platforms and strategic aims.
These companies are able to offer Malaysian startups something that money often cannot buy: Market access, locally, regionally, and in some cases, globally.
“Cradle has pledged three of its CIP150 grants of RM150000 each, the Star Accelerator Fund has pledged RM500,000, a number of prominent Malaysian angels have pledged RM20,000 to RM50,000 each,” said Nariman.
“Telekom Malaysia, Microsoft and Axiata have pledged to support opportunities that fit their needs. I am hoping, and working towards, having all these pledges committed – it’s a lofty goal, but I have seen some great innovation in Malaysian startups, and we have some amazing supporters taking part, so it’s quite feasible,” he added.
Nazrin concurred, “Investors will invest in an idea, while corporate partners will take the ideas up and give them an opportunity to market them. For example, Axiata may like your app and make it a standard offering in its service or promote it through its platforms.
“Validation from these tech giants will go a long way in alleviating some market risks,” he added.
Nazrin said that 40 entrepreneurs and about 15 angel investors have registered for the event as of Oct 1.
The peer coaches come from companies that have received Cradle Investment Programme (CIP 500) grants, with “two or three years’ experience in the local startup scene, operating in the software or services space.
“They will share their experience on running a startup business in Malaysia, provide technical and business input, as well as a few ‘dos’ and ‘don’ts’,” he said.
Upping the startup/ investment ante
The Malaysian startup scene has been buzzing over the last few years, but it was only in the last year or so that the startup investment space – long decried as insufficiently developed – started to catch up.
Last December, Cradle launched the Malaysian Business Angel Network (MBAN), which will educate, train and accredit angel investors. The accreditation would be compulsory to qualify for the Angel Tax Incentive that rolled out in April this year.
Angels Den Asia’s Nariman (pic) believes that while the angel investor scene here is still in its nascent stage, it is definitely picking up.
“I spend my time each month split between Malaysia, Hong Kong and Singapore, and have also been involved with the startup scenes in Australia, New Zealand and a couple of the Gulf states,” he said.
“What I see in Malaysia is often reflected in these other countries – the startup scene is growing and really starting to buzz, the concept of angel investing is gaining traction with more people wanting to get involved, and government agencies are focusing on providing supporting infrastructure and mechanisms,” he added.
He cited the Angel Tax Incentive, which eliminates part of the risks associated with angel investing, and MBAN, as great initiatives.
“MBAN … allows the different angel groups, supporting government agencies and other key stakeholders to work together to roll out new initiatives to support angel investing.
“There is a lot more in the pipeline, in terms of support for the angel space – for example, Angels Den Asia is working with MBAN and Cradle to develop and roll out a range of programmes over the next 12 to 18 months,” he added.
Nariman said these programmes would focus on educating and supporting new angels; supporting the creation and management of angel clubs; introducing international and regional best practices; and creating platforms to foster and grow the co-funding of deals.
Ultimately, for i2i itself, Cradle’s Nazrin wants to see more market-validated deals in the pipeline.
“We would also like to see more local angels, GLCs and MNCs co-invest and help startups commercialise their products and services,” he said.
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