Private investors take flight

The Arab Business Angels Network launched last week. The network hopes to put entrepreneurs in need of finance in front of private investors with time and money to get involved. ABAN will also use a fund of its own to get into promising start-ups.
The idea is wonderful – this type of private financing is commonplace in Europe and US (where $25bn is invested each year), but doesn’t exist in the Middle East. ABAN hopes to find, and nurture, small businesses with the potential to grow. Entrepreneurs create wealth, create jobs, and help diversify the economy. Just as important as the money will be the experience; it is hoped cashed-out entrepreneurs will get involved, passing on their knowledge.
It has some first rate backers (Dubai International Capital is driving it, Intel and Dubai Silicon Oasis have signed as corporate angels), but it will need them if it wants to change attitudes to investing. When real estate and equity markets are making easy money, why bother dabbling with slow, high-risk investments? There is also an attitude, equally damaging, that if someone shows entrepreneurial spirit, don’t back them, sign them up to work for your company.
One major thing in ABAN’s favor is that it is not politically driven. Angel investors don’t need to be Arabs, start-ups don’t need to be created by Nationals; the point is that the business (and investment) will benefit the Arab world. As governments discuss nationalization, visa caps and incentives for local business, it is refreshingly modern in its thinking.