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Casual Articles - Middle Eastern and Islamic Venture Capital Market
Gift baskets are available in a wide variety of products to match the tastes of different personalities. Most gift baskets are intended to be a complete package and hence, a number of recipients like to keep the baskets long after the eatables have been consumed. Corporate gift baskets may be addressed to one person or could be sent to a group or department.Corporate gift snack baskets can include collections of cheese, wine, chocolates, candies, poultry, lamb, pork, veal, smoked meats and appetizers, traditional and exotic seasonal fruits, or seafood. These gifts not only celebrate special occasions but also express a company?s care and concern for all its employees, stockholders and clients.Corporate snack gift baskets are usually options that people all over the world love to r
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic finan
Last week I had the opportunity to attend a trade show. Unfortunately, at many booths, particularly those of startup companies, I left without a full understanding of what the exhibiting company really did.The experience reminded me of the challenges of putting together a good elevator pitch. An elevator pitch is a brief description of a business idea. It is termed as such since it usually must be delivered within the time that you spend with an investor in an elevator, or just a few minutes. Much like an entrepreneur seeking capital, the exhibitors at the trade show were challenged with giving an elevator pitch that would get their target audience to write them a check.Most of the new ventures that exhibited did not have concise pitches. They used lots of words, but never clearly
The core to any proposed Islamic financing transaction is that Shariah (Islamic law) prohibits interest-based lending. Moreover, Shariah further prohibits investments in certain activities which are seen as being in violation of Islam, such as gambling.
However, in essence, the mechanisms of venture capital do not provide for interest-bearing lending. Rather, at the core of any venture capital funding is an agreement to share in the risks of the business venture in return for the profits derived from such business venture.
As such, rather than being contrary to Islamic law, many scholars hold that venture capital funding complies with one of the cornerstone principles of Islam: it provides much needed investment to start-up companies in return for potential rewards, while accepting the risks that may be involved in such a deal. This type of structure in Islamic Finance is called mudaraba financing that is used over many centuries in the Islamic world.
Structuring an Islamic venture capital deal
The most accurate translation of a mudaraba financing is a contract under which one person, the investor (known as the rabal-maal), brings financing and the other person, the entrepreneur (known as the mudarib), brings expertise and effort. Collectively they share the proportionate profit as per their pre-arranged agreement.
Fundamental to the mudaraba financing structure, however, is the fact that the entrepreneur cannot be placed at risk of losing any monetary investment/value. If the business venture were to fail, then the maximum the entrepreneur could lose is the investment they make in the business enterprise themselves (i.e., their own money); plus any time and effort they put into the venture. The reason why this is the case is because under Islam, you cannot loose what you do not contribute.
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic financ
Are you one of the few job-hunters who takes the time and trouble to mail a thank you letter after an interview -- or do you regard sending a note of thanks as just an old-fashioned habit from another era? If, like many people, you fall into the second category, you might just be missing out on a golden opportunity to impress an interviewer even more!Here are seven top reasons why making the effort to send a thank you letter isn't just good manners -- it's good business sense:It helps the interviewer to remember you. In the course of a busy day, an employer may be interviewing several applicants for a position. Don't let a more proactive candidate get all the attention. A thank you note is an elegant way of reminding your interviewer of your talents.
The core to any proposed Islamic financing transaction is that Shariah (Islamic law) prohibits interest-based lending. Moreover, Shariah further prohibits investments in certain activities which are seen as being in violation of Islam, such as gambling.
However, in essence, the mechanisms of venture capital do not provide for interest-bearing lending. Rather, at the core of any venture capital funding is an agreement to share in the risks of the business venture in return for the profits derived from such business venture.
As such, rather than being contrary to Islamic law, many scholars hold that venture capital funding complies with one of the cornerstone principles of Islam: it provides much needed investment to start-up companies in return for potential rewards, while accepting the risks that may be involved in such a deal. This type of structure in Islamic Finance is called mudaraba financing that is used over many centuries in the Islamic world.
Structuring an Islamic venture capital deal
The most accurate translation of a mudaraba financing is a contract under which one person, the investor (known as the rabal-maal), brings financing and the other person, the entrepreneur (known as the mudarib), brings expertise and effort. Collectively they share the proportionate profit as per their pre-arranged agreement.
Fundamental to the mudaraba financing structure, however, is the fact that the entrepreneur cannot be placed at risk of losing any monetary investment/value. If the business venture were to fail, then the maximum the entrepreneur could lose is the investment they make in the business enterprise themselves (i.e., their own money); plus any time and effort they put into the venture. The reason why this is the case is because under Islam, you cannot loose what you do not contribute.
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic finan
Most entrepreneurs from J. Paul Getty to the local cybernet caf? owner carry business loans. Not only are they usually necessary to start up and to grow a venture, they are often the best way to establish a sound credit rating. The best way to get a stellar credit rating is to take out a loan and to pay it off at slightly higher than the required amount with fastidiously punctual payments. But the combination of existing financial obligations taken together with the business debt that results from day to day activity can result in a problem that can spiral out of proportion in times of economic slowdown, or if the community finances take a turn for the worst. When these payments become a burden and more of your time is spent making smaller payments and bigger excuses to impatient creditors
Structuring an Islamic venture capital deal
The most accurate translation of a mudaraba financing is a contract under which one person, the investor (known as the rabal-maal), brings financing and the other person, the entrepreneur (known as the mudarib), brings expertise and effort. Collectively they share the proportionate profit as per their pre-arranged agreement.
Fundamental to the mudaraba financing structure, however, is the fact that the entrepreneur cannot be placed at risk of losing any monetary investment/value. If the business venture were to fail, then the maximum the entrepreneur could lose is the investment they make in the business enterprise themselves (i.e., their own money); plus any time and effort they put into the venture. The reason why this is the case is because under Islam, you cannot loose what you do not contribute.
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic finan
What do you mean by a 'brand'? It's no secret that most fine chess sets are made by artisans in India. They are nicely weighted, beautifully designed and look/feel great. Some manufacturers are better than others, and quality is an ever present issue to grapple with on an ongoing basis. But good quality can be had - and there are a number of stores, physical and online, that market excellent quality chess sets for good prices that yield a little profit for the operator. How can we make ours distinct? How can we make our version the next Jaques, that will someday be heard on a future incarnation of Antiques Roadshow, where the owner will show that warm glow of satisfaction when the expert tells them that she has a genuine 'Baron' as sold by the early 2000 chess retailer ChessBaron? Hmmm, ye
Fundamental to the mudaraba financing structure, however, is the fact that the entrepreneur cannot be placed at risk of losing any monetary investment/value. If the business venture were to fail, then the maximum the entrepreneur could lose is the investment they make in the business enterprise themselves (i.e., their own money); plus any time and effort they put into the venture. The reason why this is the case is because under Islam, you cannot loose what you do not contribute.
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic finan
Are you staring at an empty page, trying to write the next cover letter? Or postponing the grip and grin meeting you’ve scheduled? Have lethargy and laziness set in? Has your get up and go taken a permanent vacation?Well, my friend, you are not alone.Staying motivated during a prolonged job search is more challenging than actually going on an interview.Here are some tips to keep you motivated:Keep busy by lending a hand - do volunteer work or help a neighbor in need. It will raise your self-esteem and the feel good quotient that can be sorely depleted during a job search.Get temp or contract work – this will give you a few bucks and provide structure to your week.Shake your booty –
In addition, under a mudaraba financing structure, strictly speaking, the investor is not allowed to partake in the management affairs of the business venture in which they have invested, they’re simply an investor – period. Day-to-day and overall management of the business must be left to the entrepreneur.
Differences between Islamic and Western VC funding
While the mudaraba Islamic financing structure does provide for a form of venture capitalism, it also raises certain issues that Western venture capital funds may find un-easing.
One core difference between venture capital investments that comply with Shariah law and those more commonly seen in the West is the allocation of loss risk.
Traditionally, venture capital funds invest in high-risk businesses in which there is an above average chance that the business will not be a viable enterprise, but where the profit upside is huge. In most cases, this has concentrated around the area of technology companies, but today it could equally apply to other industry sectors; such as media and medicine. A recurring theme, however, is “high risk”. For example, each of Yahoo!, Google, Apple, YouTube and MySpace have, at some time or other, received venture capital funding. And for each of these successes, there have been a hundred failures!
Given that venture capital funds historically invest in high risk industry sector businesses, over time, venture capital firms have put in place a structure that allows them to exit from the investment: (a) with maximum profits; and (b) with minimum losses. As we shall see, under Islamic Shariah law, both of these create a problem. One of the first discussions that takes place for any venture capital fund looking to invest in a business is how they plan to exit from the business. All things being well, the chosen form of exit by the venture capital fund will be by way of an initial public offering (IPO) of the shares in the business to the general public. However, electing to have an IPO as an exit strategy in an Islamic venture capital investment financing structure is not permissible. Thus, an alternative mechanism needs to be considered.
On the flip-side, as previously mentioned, in a worst case scenario, if the business venture fails, the entrepreneur (mudarib) cannot lose more than the time and effort they have invested in the business. As such, in effect, the investor bears the brunt of the financial risk that the business will fail. Thus, traditional mechanism that would otherwise limit the venture capital fund’s losses, or would otherwise give the venture capital firm a preference over the other investors in the business in a bankruptcy scenario, such as with the use of a preference share structure, are prohibited under Islamic law.
The second core difference between a Western structure venture capital financing deal and an Islamic venture capital financing deal rel
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