Funding, Angel Investor Approaches and Perspectives on Startups in Indonesia

Angel investors is currently one of the types of investors that helps digital startups in Indonesia to develop, especially in the initial phase. In terms of quantity, the interest of investors with a style that seems more "personal" is also observed to continue to grow. It is not surprising, because the digital sector is now visible sexy to get the attention of business people. Reviewing the extent to which a person's view angel investors on startups in Indonesia, DailySocial tries to discuss it together Michael Tampi.

In addition to investing personally, Michael is currently also a member of Kinara Indonesia, an investment institution that focuses on financing the MSME sector.

Starting the conversation we tried to dig up his personal opinion as angel investors related to the current development of the country's digital startup landscape.

"Looking at the developments over the past 5 years, the acceleration of the development of digital startups in Indonesia has occurred so significantly in the last 3 years. Success story Kaskus, Tokopedia, and Go-Jek in my opinion become trigger biggest. Potency market which is always echoed because of the large population of Indonesia, it is also an attraction for local and foreign startups to enter Indonesia," said Michael.

Michael also commented on the growth of local startups in terms of quality. Although in terms of numbers growing very rapidly, according to him, it must be admitted that in terms of quality it is still very lacking. There are still many startup ideas that adopt creativity from abroad, even though not all of these concepts are ready to be applied in Indonesia. Focus on creating a truly digital startup problem solver of the problems that exist in Indonesia need to be emphasized again.

Investment approach and funding mechanism by angel investors

Slightly different from venture capital or other types of investors in the form of institutions, angel investors generally have more personal mechanisms, less structural or bureaucratic. For Michael the trust factor in founder be the key to investment decisions. Some of the things seen by angel investors in assessing the founding team include (1) whether it has passion and experience in related fields, (2) whether they have the right composition in forming a team, and (3) what is their vision of the business created.

Another point that is also a concern is how scalable the developed business is. And no less important is the assessment of the business plan, whether it makes sense or not. These various concepts become important considerations, because most of the angel investors support startup at stage early stage. Big names like Facebook or Tokopedia in the early stages of establishing their business are also supported by funding angel investors for business acceleration.

"Both in the world and in Indonesia, the role of angel investors is very important in the digital startup ecosystem. Especially in Indonesia, I think it's needed too upgrade for angel investors who have been formed as conventional investors in the real sector, to be able to get share knowledge about risk, the digital ecosystem, as well as the experience of investing in early stage digital startups," said Michael.

In the early stages, startups often focus too much on ideas

From Michael's journey in collaborating with startups on various occasions, including pitching, he often encounters enthusiasm for product ideas. According to him, this is good, but it is often too much, so it is not validated by the target consumer. In fact, business people in early stage need to be able to focus on customer behavior.

"We can learn from Alibaba beating eBay in China, where Jack Ma is very focused on local customer insights, and believes that eBay's Silicon Valley concept doesn't necessarily match behavior and wishes customer local in China. For Indonesia, which has huge potential, we can see local heroes like Go-Jek which is even its closest competitor from outside ie Grab," Michael said.

In addition to being related to validation and customer behavior, there is another thing that according to Michael needs to be improved, which is related to data. Startup in early stage most have not used big data to conduct their consumer analysis. This analysis is needed to get insight for products that are fit for market share. For Michael, utilization big data at startup will really help move business and investment in the right direction.

The digital startup industry now looks more promising. Its potential in growing the national economy is undoubted. In line with that, many things must be continued, improved and harmonized. As Michael hopes for the startup ecosystem in Indonesia today.

"I hope the whole collaboration stakeholder to build a digital world ecosystem, focusing on quality improvement engineer, mentoring, and produce products that answer local problems which can then be duplicated and even penetrated regionally and globally," concluded Michael.