Forum focuses on benefits of angel investing
Business leaders gathered for the first-ever Egypt Angel Investors Forum, hosted by the AmCham Entrepreneurship & Innovation Committee on February 27 at the Four Seasons Nile Plaza. The half-day workshop featured keynote speaker Jim Daniell, chief operating officer of Oxfam America and co-founder of CommonAngels, and a panel of Angel Investors, including special guest Abdul Malek Al Jaber, founder and chairman of MENA Apps, as well local angel investors Hossam Allam, director of infrastructure development at Misr Sons Development – Hassan Allam Sons, and Loay El Shawarby of Zaki Hashim & Partners law firm.
The event was the culmination of extensive work by the committee as well as a commitment to the principles shared with the US State Department’s Global Entrepreneurship Program (GEP), which is implemented by the Egyptian Competitiveness Program, a USAID project. AmCham and the GEP began their partnership January 14, 2011, when the Chamber hosted the closing ceremony of the GEP delegation’s visit. In addition to a business plan competition judged by members of the GEP delegation, the American University in Cairo and Sawari Ventures signed a memorandum of understanding to create Flat6 Labs, an incubator that has produced its first group of graduates.
Entrepreneurship & Innovation Committee Chair Ahmed El Daly began by explaining that the day was all about catalyzing angel investing in Egypt. Steve Morin, policy and private sector office director, and Mike Ducker, entrepreneur in residence, spoke representing the GEP. Ducker shared stories of entrepreneurs he has worked with across Egypt. “There are so many entrepreneurs with great businesses in Egypt, but they do not have the financing to take their companies to the next level,” he said.
In his keynote address, Daniell detailed how his Boston-based angel investing group, CommonAngels, started. Daniell, an engineer, has worked for six startups and started several venture capital funds. He became involved in angel investing because of the difficulties he had finding capital for startups. In 2000, two years after CommonAngels began, the group had 50 angels and $3.7 billion in 17 investments. The 2001 stock market crash stalled much of the work, but Daniell explained that smart money invests at the bottom. By 2010, CommonAngels had over eight exits and 50 million USD invested.
The key to a successful angel investor group is to have members aligned on the goals, active members willing to do their share of research and work and a dedicated staff to keep everything organized, he said, adding that strong angel investor groups share the commitment, build an ecosystem and focus on exits. “Every deal that I’ve ever been successful in has had passion and ears,” he said, meaning that investors should look for entrepreneurs who will not give up until a deal is done, but are also willing to take advice.
Panelists related personal experiences with angel investing, echoing much of what Daniell had articulated. They noted that an investor should start talking to entrepreneurs early to cultivate a relationship and not be overly focused on the big return on investment. Al-Jaber’s MENA Apps was the first company in the MENA region to focus on customer relations management and social media applications for business, as well as to introduce Arabic API (English to Arabic translation). He characterized angel investing as a legitimate alternative to property and stock market investing, especially given that these traditional markets have been less stable in recent months. Al-Jaber emphasized that the greatest benefit to angel investors, both at the start of an investment as well as throughout the entire process, is the direct contact with management and understanding of day-to-day operations in the companies they finance. Al-Jaber concluded with a tip for participants: Now is the best time to invest in startups and small businesses.