Peter Alagos/Business Reporter
The Digital Incubation Centre (DIC) said it is encouraging Qatar investors to embrace Information and Communication Technology (ICT) strides considering the robust “investment appetite” of venture capital firms for ICT-related industries.
DIC manager Ahmed Laiali said recent global studies have revealed that investment appetite from a venture capital (VC) perspective showed that “what is appealing to most industries are the related to ICT.”
Laiali noted that mobile cloud computing, enterprise software, healthcare IT services, consumer software, and new media-associated networking are the first five areas that have a high overall confidence from global venture capital firms.
“The Qatar 2030 vision is about moving the economy towards the knowledge-based side rather the oil and gas sector. So, one of the pillars of a knowledge-based economy is entrepreneurship and building new startups, especially technology and ICT-based startups. This is the main role that the DIC is carrying on its shoulder,” Laiali told Gulf Times on the sidelines of the recently-held “First Angel Investment Boot Camp.”
Laiali was quick to explain that the angel investor concept is new to Qatari entrepreneurs, but noted that the programme, once adapted by local companies, would help “shape up and mature the entrepreneurship ecosystem.”
“Around the world, there are government grant schemes, seed funds, angel funds, and venture capital funds,” Laiali said. But he also noted that in Qatar there is a “scarcity” of financial resources that are geared towards entrepreneurs aside from banks.
He also emphasised that “for the financial pipeline there are still no grant schemes to support startups,” hence the introduction of the angel investor network concept. It aims to provide financial support and encourage growth for startups.
“Angel investments do not usually exceed $1mn, while venture capitals go up to $100mn in investments. Venture capital is different in terms of value and size and investments,” Laiali explained.
According to Laiali, the main driver for an angel investor is not revenue generation, but rather supporting startups.
“An angel investor doesn’t intervene in the management of the company, which is the opposite of venture capitals. VCs, on the other hand, intervene in the management capital of the company,” he explained.
“An angel investor is not providing the initial capital for the startup, but rather a ‘growth capital’ – something to take your company to the next level,” Laiali said.
Laiali said one of the issues entrepreneurs were facing now is trying to understand what incubation is and who could help them take the company to the next level from a financial perspective?
“We are trying to secure a safe exit for the incubator startups from our incubation centres and for all startups to secure another source of finance for their projects rather than bank loans,” Laiali said.
Once the angel investor concept has gained momentum among Qatari entrepreneurs, “the next step is to form another network for venture capital firms,” he said.