If you have an interesting idea but you do not have enough financial capacity to develop it or put it into practice, angel investors will be in charge. This is creating such a great opportunity for young entrepreneur in Turkey, one of the youngest population in Europe.
But,what exactly is an angel investor and what do they do? Angel Investors will provide capital for business growth or development, investing in start-up business opportunity. In other words, they are private investors who invest in firms with high risk and high growth potential in a very early period of their establishment. They usually provide individual support and counseling together with the share of the enterprise in proportion to the amount of investment they make. In addition to financial factors; economic, social and personal reasons also effect investment decisions. Angel investors who are uncomfortable in adding internal insights into the decision-making process prefer to be part of the venture until they exit this investment.
As of the second quarter of 2017, the number of BKS (individual participation capital) licensed investors is 424. Regarding the Angel investors density of areas in Turkey, Istanbul is the city where they are based mostly. The angel investors in Istanbul are 79% of the country’s general investors. The second place is Ankara with an 8% share. The vast majority of licenses have a bachelor’s degree or a master’s degree. The reasons for being a startup angel are divided into 4 reasons:
- Growth potential and high return (%43)
- Financial and moral support (%25)
- Innovative business opportunity (%19)
- Evaluating alternative investment opportunities (%13)
In addition, 103 investors think that the effect of tax support is great. Number of successful investment applications as of June 2017 is 22. Investment in successful applicants exceeded 6 million TL while the investment amount of applications for which the transaction is ongoing is 1,839 million TL.
In the first half of 2017, while investments of licensed angel investors were 280.000 TL, unlicensed angel investors almost doubled this figure and exceeded 1,3 million TL. For young population dynamics and the creation of the future, startup angel project is of great importance. In Turkey there are already many angel investors companies like ILab, Lab-x, Galata Business Angels, Endeavor or Linksangel. Turkey, especially in technology and internet sectors, stands out as a rough mineral. When we look at the US there are over 300.000 internet angel investors and $23 billion TL in investments. Every day in the US 180 entrepreneurs get money from angel investors. There are also 70.000 angel investors in Europe and about $5 billion is invested each year.
On 13- 14th February 2018 the World Business Angels Investment Forum will be held in Istanbul. This year’s forum will be organised with the theme of ‘Partnering with Corporate Ventures from Start-up to Scale-up to Exit’, will focus on how corporate businesses can foster open innovation and deliver more business value through partnerships with angel investors, start-ups and SMEs.
For more information you can visit the website of the Association of Angel Investors in Turkey;
Conexio is a consulting firm in Turkey based in Istanbul that provides services to local and foreign companies with commercial or investment interests in the region.