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Getting inspiration from Silicon Valley to found Taiwan's first Angel Club: an interview with Angel to Venture Accelerator founder JJ Fang
Experienced venture capitalist JJ Fang went to San Francisco to attend Venture University and fell in love with the concept of angel clubs, so he decided to bring the idea back to Taiwan and establish the first angel accelerator here.
According to Crunchbase data, global venture dollar volume from 2011 to 2020 has increased except in 2019 due to the COVID-19 pandemic. As the Federal Reserve and developed countries keep releasing money to the market to stimulate the economy and the US and Europe prepare to reopen the economy, global venture investment subject to growth with a stellar figure.
During this period, there is a trend for the so-call "Democratization of Investing," which means everyone who has any discretionary capital should invest in a private company. It is popular in the US that several people interested in investing in startups form an angel club. According to Angel Capital Association and Business Angel Institute, approximately 300,000 people invested in US startups as angel investors in the last two years, and the size of the angel investment market is more than EUR 10 billion in Europe and more than USD$ 26 billion in the US and Canada.
Angle to Venture Accelerator let individual angel investor as powerful as VC
Angel to Venture Accelerator(AVA), founded by experienced venture capitalist JJ Fang in 2020, is Taiwan's first "Angel accelerator" focused on practical investment. They believe unity is strong and aim at gathering individual angel investors together to form an angel club, in which the investment process is similar to professional VC firms.
Although individual angel investing is flexible, there are some disadvantages to being an angel investor alone. For example, the investing volume is not big enough. It is hard to negotiate beneficial term sheets, so it is hard to obtain complete information about the startup, and it is hard to do post-investment management.
An angel club can solve these obstacles. "AVA is operating as a venture capital firm. First, we would do deal sourcing and conduct internal meetings to evaluate which startups to bring to AVA angels; then, we would invite the startups to come to our office for pitching. If the angels have any questions, they can ask face-to-face to the startups. If we decided to invest, we would do the due diligence and prepare the term sheet and legal document. Our investing workflow is identical to a venture capital firm," said JJ Fang.
Furthermore, the brand name, Angel to Venture Accelerator, can also enable angel investors to contact more startups and obtain more data and information on behalf of an investing institute. "In the US, there are lots of equity crowdfunding platforms like Angellist, which allow angel investors to browse through the platform and invest in startups they like. But the investors may not have the chance to meet the startups and can only rely on public information to invest," said JJ Fang.
AVA now has 15 angel investors with backgrounds from various industries, including finance, ICT, e-commerce, semiconductor, software, and medical. It's also an unfair advantage for AVA. With different experts, they can review every investment deal more thoroughly. "15 people teaming up together to review one deal is way more powerful than one person. I want to describe AVA as a sharing economy for angel investors," said JJ Fang.
Venture University inspire JJ Fang to bring the concept of Angel Club to Taiwan
JJ Fang started his venture capitalist career at Top Taiwan Venture Capital, a leading venture capital firm in Taiwan with USD$ 4 billion funds under management, 7 years ago. Before being a venture capitalist, JJ Fang had worked for a leading TFT-LCD manufacturing company and Quanta Computer as an engineer. This practical experience enabled JJ Fang to invest wisely in the tech industry. He has invested over USD$ 20 million, and two companies he invested in are now already listed on the Emerging Stock Market.
After gaining a stellar record on venture investment, pilgrimage-to-startup heaven Silicon Valley occurred to JJ Fang's mind. "The US has the most unicorns, but I never have a chance to experience the VC atmosphere there," said JJ Fang.
Two years ago, JJ Fang applied for Venture University(UV) in San Francisco. UV advocates "learn by doing" and can be seen as an investor accelerator. UV would amass students' tuitions as a fund, and all the students would act as limited micro partners to decide which startups they wanted to invest in.
"Being a student there is like working as a venture capitalist," said JJ Fang. During the 3 months session, the students need to report which startups they are investigating every week and engage with networking events to explore more sources and information. Once the portfolio makes money, the students can also get profit sharing.
After finishing his education at Venture University, JJ Fang felt excited about this angel club-like mechanism and decided to bring it to Taiwan.
AVA is targeting Seed to A round stage startups. With angels from different backgrounds, AVA can invest in various areas, including AI, IoT, Big data, Internet, software, e-commerce, and education. Now AVA has invested in five startups: Fst Network, Vocus, Rosetta.ai, Moovo, and MR.LIVING. "We are always welcoming angels to join us. With more investors, we can unleash the power of AVA," said JJ Fang.
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