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What is Venture Capital?

Venture capital is a type of private equity; it is a form of financing for early-stage companies who are deemed to have high growth and innovative potential by firms or funds. These investments tend to be very risky but can result in high return from exits. It doesn't always take a financial form - it can be provided through the lending of human or technical capital via mentorship and partnerships. 

The length of the investment varies but generally it is between four to seven years. This means there is a commitment to building lasting and sustainable value in the companies they invest in. Creating value in a business is key to the venture capital model. 

How does Venture Capital work?

  1. Entrepreneur gets introduction to multiple VC firms

  2. Entrepreneur pitches business to VC firms

  3. Term sheet written if VCs want to invest

  4. Build business further

  5. VCs repaid through: acquisition, IPO, or bankruptcy

Why does the Middle Eastern VC community need an industry body?

Responsible investment is instrumental to value creation. We offer support to the growing community and act as the hub for venture capital and private equity firms, international investors and other offices by providing a mechanism to measure, manage and mitigate risks. With the establishment and education of best practices within the region, we aim accelerate the region's growth, presence and reputation to become a platform of innovation.

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