In recent months there has been a lot of interest and discussion regarding the development of Entrepreneurial skills to enable the necessary development of a locally grown SME market. The role of angel investors in aiding the development of business success has been proven in different parts of the world to be integral to the overall success.
So what is an ‘Angel?’
Business angels tend to be wealthy individuals who have already been successful in business. Some are entrepreneurs who have sold their businesses, while the remainder are often former senior executives of major organisations, or business professionals such as accountants, lawyers, or management consultants.
Business angels invest with the primary motive of making a financial return, but non-financial motives also play an important part. Research suggests, for example, that business angels often enjoy being involved in growing a business and may also harbour altruistic motives, such as wishing to help budding entrepreneurs or wanting to make a contribution to the local economy. (Macht S, The Post-Investment Period of Business Angels: Impact and Involvement, pp 14-15 – www.eban.org – July 2007
Can this model work in this region?
Within the GCC region there is the practice of local sponsorship of Nationals to business owners, enabling businesses of different sizes from outside of the home country to do business. The partnership is based on the 51:49 % ownership principle, but separate contracts exist to cover profit share. As the basic premise of the ‘Angel Investor’ model is that the Angel takes a percentage of the equity of the business, the business owner may feel reluctant to dilute their 49%. However, many of these companies are underfunded and therefore not resulting in much of a profit share for either party. Some flexibility and creativity in drawing up acceptable contracts with all parties is possible and worth pursuing. When individuals agree on the bigger purpose they all have in common, then agreement is easier.
Grow local talent
The biggest opportunities exist in the encouragement and development of locally grown business ideas from all nationalities. Rather than import an existing franchise or brand, there is plenty of talent around us in Qatar and increasingly more organisations available to support this talent.
Why be an ‘Angel’?
Qatar has an ambitious vision and even in the past 12 months, the excitement and possibilities for new businesses have accelerated. Many individuals want to be part of the process of building a sustainable economy which is no longer dependent on the hydrocarbon sector but develop new sectors in ICT, the Arts, Health and Education – all extremely exciting and rapidly changing sectors.
The benefits cited by both men and women angels include the desire:
- for an above average rate of return on investment
- to engage in the high-passion, high-energy world of entrepreneurship
- to not only invest in but mentor emerging companies
- to seek a “second career” that is challenging, but allows them to participate in other interests
There are opportunities in the region for both business owners and ‘Angels’ -for further information on the subject, check out www.silanetwork.com