TL;DR: Startups are the key to innovation, but traditional venture capital funding is largely based on pedigree and connections, making it difficult for newcomers to break in. To democratize the creation of wealth, we need more people to become angel investors, supporting promising startups at the early stages. By becoming an angel investor, anyone can contribute to the creation of a more equitable and innovative future, and potentially earn a return on investment as well.

Why I Became an Angel Investor

As a startup founder, I have experienced firsthand the difficulties of securing funding, especially from traditional venture capitalists. I have never been able to secure VC funding. However, I was able to start Forbole with the help of a US$25,000 angel investment from three family and friends who believed in my potential. That's why we named the company "for bo-le" (伯樂) - a term used in Chinese literature to describe individuals with a keen sense of judgement on the potential of talents and resourcefulness in helping them thrive and shine.

Their support has inspired me to become an angel investor myself, supporting other promising founders in the web3 space.

Democratizing the Creation of Wealth

However, the current startup fundraising ecosystem is still largely based on pedigree and connections, favoring established players or those who have won ovarian lottery and making it difficult for newcomers to break in. This system perpetuates existing wealth inequalities and makes it harder for innovative ideas to flourish.

To address this issue, we need to democratize the creation of wealth by encouraging more people to become angel investors. By investing in promising startups at the early stages, individuals can optimize their investment portfolios while also supporting quality founders who may have been overlooked by traditional venture capitalists.

Self-Fulfilling Nature of Early-Stage Investment

If there are more people participate in early-stage investment, the upside potential in the stock market will become smaller as more people have already invested before those companies go public. This movement is self-fulfilling in nature. When the pie in the secondary market becomes smaller, people will start looking for the reason and discover that more investments have been made in the early-stage. This will lead to more people joining the early-stage investment game due to FOMO. Series A is the new seed and seed is the new pre-seed.

Positive-Sum Game

But I believe this is a positive-sum game rather than a zero-sum game. More investors supporting more founders will lead to more innovations and success stories. We do not need others to fail in order to succeed.

Becoming an angel investor doesn't require immense wealth or connections, but rather a keen sense of judgement and a willingness to take calculated risks. With the right resources and support, anyone can become an angel investor and contribute to the creation of a more equitable and innovative future.

Hong Kong: a wealthy city full of potential angels

I am fortunate to have been born in Hong Kong, a wealthy international financial center. Hong Kong is home to a large number of HNWIs (high-net-worth individuals, normally defined as those with at least US$1 million in net assets excluding primary residence). I strongly believe that many people in Hong Kong have the potential to become successful angel investors. By doing so, they create new growth potential for their investment portfolios while also helping quality founders bring their innovative ideas to life. I hope to encourage more individuals in Hong Kong to explore this exciting opportunity. Therefore, I have become an Angel Squad Member at Hustle Fund founded by Elizabeth Yin and Eric Bahn to learn how to become a better angel investor.

Conclusion In the end, being an angel investor is not just about earning a return on investment, but also about making a positive impact on the world by supporting innovative ideas that have the potential to change our lives for the better. So let's be kind, build something, earn some money, invest in some founders, and repeat.