Malaysia has raised the profile of Islamic finance, Takaful and Halal industry, and, now, she must do the same to venture capital (VC). VC is an important emerging asset class that should contribute to government’s objective of building a knowledge based economy by 2020.
There were several important takeaways from the recently concluded International Venture Capital Symposium 2011. One of the most important sparks to establish a VC infrastructure in debt based and biased Muslim countries is the role of angel investors.
The angels are between ‘friends, family and fool’ (FFF) seed money and established VC money. Although its expensive money, due to high failure rate and 5-7 year lock up period, these stage two companies will not receive financing/funds from banks, Islamic or conventional, which typically lend to old economy companies whose business they understand.
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