By John Lo, Partner, Corporate, King & Wood–Hong Kong

To a large extent, angel investment in Hong Kong has so far revolved around individual investors rather than institutions. It is useful to examine local angel financing activities by looking at the angel profiles.To date, no systematic research has been conducted regarding the number or makeup of business angels in Hong Kong. General observations indicate that the following groups, not in any order, have been spearheading the efforts: (a) former VC practitioners; (b) individuals who have made money from entrepreneurial activities or as angels; (c) second generation of the leading business families; (d) professionals such as lawyers, doctors and accountants; (e) tech executives and professionals; (f) well-to-do manufacturers who made their initial fortunes with investments in China; and (g) returnees or overseas Chinese with exposure to angel investment elsewhere.

Angel Profiles

A recent article on Hong Kong’s VC industry has an interesting analysis of angel investors in Hong Kong. It put them into five categories :

  • Sophisticated – the “true” and knowledgeable angel investment practitioners;
  • Businessmen – knowledgeable but less intense investors in start-ups doing deals as an alternative investment form;
  • Corporate – manufacturers seeking tech startups to extend their product lines or services;
  • Incidental – highly wealthy individuals investing to prove themselves or kill time; and
  • Traditional entrepreneurs – traditionally minded bosses who will invest only if they are in control, not the founders who came up with the original ideas.

Outside certain portions of the above circles, the concept of angel financing is only beginning to be understood or practiced widely.

Angel Networks

Angels acting in concert or in organized groups is a more effective way to invest. Accordingly, organized angel networks have begun to emerge in recent years. We cite a few better known examples below.

  • British Chamber of Commerce Business Angel Programme ( was initiated by the British Chamber’s IT and SME committees and sponsored by a local audit and business service advisory firm. This program has been running two or three meetings a year, where a number of shortlisted investee companies are given the opportunity to make presentations.
  • China Business Angel Network (CBAN) ( Hong Kong Chapter is the local chapter of CBAN, an established network of more than 140 angels with chapters in Shenzhen, Shanghai and Beijing. CBAN members enjoy reciprocal membership with Business Angel Network South East Asia (BANSEA) in Singapore.
  • Hong Kong Angel Capital Network ( is created as a joint venture among its members and Dr. Samson Tam, founder of Group Sense Limited and currently a legislator in Hong Kong. Member admission is by invitation or referral only, requiring declaration of not less than HK$20,000,000 of investable fund and investment in at least one project of the Network in a 12-month period.
  • Tolo Habour Business Angel Support Group ( is an initiative of the Chinese University of Hong Kong Centre for Entrepreneurship to match companies with good potential with prospective angel investors through the University’s alumni network.

Angel clubs, Angel funds or investment groups

Going beyond networks, angels might band together to invest collectively as angel clubs, angel funds or investment groups. So far, such efforts in Hong Kong seem far and few in between. A few of the budding ones may include:

  • Black Horse (, a small angel investment group that typically invests US$50,000 to US$1,000,000 in each company and looks to co-invests with other venture funds in Asian companies with capital requirement of US$1,000,000 to US$5,000,000 and a valuation of US$2,000,000 to US$10,000,000. Its industry focus is IT, telecom, education and environmental protection.
  • Catalyst Group (
  • Hong Kong Angel Investment Network ( is a London-based investment company. It provides a web-based matching service for angel investors seeking investment opportunities and entrepreneurs seeking capital. Entrepreneurs are charged upfront referral fees for the service

Amounts and Structure of Financing

Based on general observations, the deal size of angel investment in Hong Kong seem to largely fall under the norms elsewhere. Individual investors generally takes one or more units of roughly US$50,000 each, resulting in rounds of financing aggregating roughly between US$0.5 million to US$1.0 million per round.

The funding vehicle and the corporate structure in Hong Kong are often more complex and less uniform than those elsewhere, such as Silicon Valley. This is a reflection of the need to adapt to the varying requirements to operate multi-jurisdictionally. For instance, companies of Hong Kong based founders that operate in the mainland will need to set up a corporate structure not only in Hong Kong but also on the mainland. Typically, ordinary shares are used for the initial rounds. However, following the financing practice of the US, some investments are taking on more sophisticated structures, including the use of preferred shares and convertible notes.