Everywhere I look (and I look under every stone these days…), I see and read about the great entrepreneurial boom spreading across the MENA region. From Berytech Fund’s 50 million upcoming fund to Middle East Venture Partners’ 50 million USD fund to Fadi Ghandour’s upcoming 75 million USD fund to Haddad Advisory’s 100 million USD fund, there seems to be a huge amount of capital out there chasing what should ideally be an equal amount of great startups. But is that really the case? Having looked into the Lebanon and Levant private equity and venture capital scene, the UAE private equity and venture capital scene, the GCC private equity and venture Capital scene, the MENA seed funding, early stage financing and angel investors scene, etc… I get the same sense of uneasiness that something is not quite right. There seems to be way too much money chasing way too little quality startups. In other terms, demand vastly exceeds supply. And that spells out one thing and one alone: bubble! And that is not good for anyone in the MENA startup ecosystem! Because all bubbles have one thing in common: one day or another… they burst! And when they do, it’s ugly! Now don’t get me wrong. I have been supporting (and applauding) the great strides being made in the last years across the MENA startup ecosystem. As an entrepreneur and investor, I have witnessed both sides of the boom. And that is precisely why I would hate to see all this headed down the same path that the Dubai real estate scene took a few years back! But how can we prevent such a looming disaster from happening? First and foremost by giving more credit (and better terms) to the entrepreneurs (those who are the key to the entire ecosystem). In Silicon Valley, good startups are like prima donnas. Investors fight to get in at ground zero. In MENA, great startups are still treated as infants who are lucky enough to grab the attention of the regional investment community. As my friend Nima Adelkhani recently posted right here on MENA Opportunities: cut the entrepreneurs some slack. Because guess what: without them, there are no VCs, angel investors, early stage funds or startup ecosystem for that matter… It’s like petrol stations inflating the price of fuel and not understanding that they only exist in the first place because... people drive cars. The car drivers are those with the power, not the petrol stations. Over and out…
Charles Corm
