Tarek Ahmad is an optimist, which is just as well.
As an angel investor who lost US$80,000 on his first two investments, he is undeterred.
“You live with it,” says the 30-year-old Egyptian entrepreneur and investor, who was born and raised in the UAE.
Angels such as Mr Ahmad invest in very early stage start-ups, playing a critical role in the region’s entrepreneurial ecosystem.
“One way to look at them is that they offer significant assistance in helping the start-ups cross the valley of debt,” says Ramesh Jagannathan, the managing director of the innovation and entrepreneurship platform StartAD. “That’s a gap that they fill.”
Mr Jagannathan was speaking at a recent event at New York University Abu Dhabi called Angel Rising organised by StartAD, which he is the managing director, and the early stage funding platform VentureSouq. The annual event aims to educate prospective angel investors.
According to a report released earlier this month by Arabnet which surveyed 150 investors, approximately half of the investor community across the Middle East and North Africa are early stage investors.
But unfortunately for the UAE and wider region, there are still not enough angels. “If you look at the US there are 400 of these angel groups and there are 300,000 angel investors. Over here there is of course VentureSouq, Wain, Womena – there are a few groups doing a really good job, but we need more of them,” says Najla Al Midfa, the general manager of Sheraa, the Sharjah Entrepreneurship Centre.
So why are more investors here not getting involved at the angel stage?
“In general, perhaps we don’t have enough investor education, so not many high net worth individuals are very familiar with this asset class,” says Ms Al Midfa.
Others think people are put off by the risk involved.
“You could lose 100 per cent of your capital. So if you are not prepared to take that, don’t do it,” says Saud Al Nowais, an angel investor who is the commercial counsellor for the UAE to the United States.
In fact, according to Jeff Lynn, the cofounder and chief executive of Seedrs, an equity crowdfunding platform based in the United Kingdom, this is a space where most businesses you invest in will probably fail, no matter how good you are.
Typically, the first funding a start-up receives is from their friends and family, say experts. Angels come in after that, providing anything from $25,000 up to $250,000, in return for a stake in a business. The next investment stage is seed funding, which takes into account certain criteria, such as traction in revenue or user growth. It is typically this stage where a company aims to scale.
Therefore, without angels filling the gap between friends and family and seed investment, there would be no ecosystem, the experts agree.
But despite the risks, many investors still want to get involved because the returns they receive if the business they back does succeed can be tremendous. Many angels hope to hit the next unicorn, which is a start-up with a valuation of more than $1 billion.
“The winners can win so big,” says Mr Lynn. The prospect of making money is partly what keeps Mr Ahmad, an engineer-turned-entrepreneur, interested in the space.
“I usually invest around $30,000 to $100,000. I love to give very small tickets,” says Mr Ahmad, who plans to launch his company Wakil, which offers people the chance to complete government services without visiting typing centres, in July.
“I have realised through time that the more money a company has at the beginning, the more foolish they will become. It doesn’t really drive you to become leaner. You start thinking about all the luxury you might not necessarily need. I have made that mistake before.”
The first two angel investments he made, which were for $50,000 and $30,000 respectively, did not fare well. He lost it all when the businesses folded.
“You enter it with [the prospect] of losing the money in mind. You know you have a good team and a great idea and you look at the macroeconomics of things; will they have leeway and can they operate in the country?” he says.
“But then sometimes either the competition is too fierce or they couldn’t get funding at the right moment. It’s a combination of a lot of issues. If you lose the money, at least you are ready for that.”
However, Mr Ahmad could be in line to score his first big win. He has invested another $30,000 in a company that is preparing for a seed round and expects a good return when he receives the possibility to exit in about three years’ time.
Although money is a key motivation, it is not the only one for Mr Ahmad. Being lucky enough to receive investment from his parents at the earliest stage, he knows many are not so fortunate.
“From a UAE perspective, there aren’t yet a lot of angels in the market,” he says. “That’s why a lot of early stage start-ups don’t find it easy to access funds. And not everyone has family or friends we can rely on.
“For me there are a lot of ideas and founders you can trust. And they just need an opportunity. They just need their own opportunity to shine.”
Others are in it for the thrill. Some angels, many of whom are, or have been entrepreneurs themselves, act as mentors to the start-ups and get a kick out of seeing them succeed. This is the case for Vikas Shah.
“I find it intellectually stimulating and it really makes me want to get out of bed in the morning. That’s why I do it,” says the visiting professor of Entrepreneurship at MIT’s Sloan School of Management.
Sonia Weymuller, 33, from France, became interested in angel investing at the same time as her friends, Tammer Qaddumi, Sonia Gokhale and Suneel Gokhale, back in 2013. Like them, she had some money to invest and was looking to do something interesting with it, but it quickly developed into something far more significant.
“Basically, our friends started feeling a bit envious, saying ‘that’s cool, you should have told me’,” she says.
“We started holding these informal pitch events, which would feature a company we found interesting and had them pitch to a group of us, 10 or 15 of us. And then our friends started inviting their friends, and their friends started inviting their friends. And literally it just grew very organically.”
Today it is a business, called VentureSouq, which has five partners, the original four plus another based in Saudi Arabia. It promises to make an angel out of anyone – provided that they can afford the investment. Ms Weymuller describes it as an early stage equity funding platform with an investment and edu- cation pillar.
It has done 20 funding rounds into 14 companies, including Knot Standard, an online custom-made suits company, and financial comparison website Souqalmal, since 2013.
It has a reach of 750 investors across the GCC, but most of them are from UAE. All do not necessarily invest though. Majority On average about 100 investors attend the investor round-ups, which are held on a quarterly basis.
Teasers are sent out on the three companies that will feature to ensure people are not wasting their time. And the number of people who do part with their cash is rising.
“It is a conversion process. So we have increasingly seen our investors feeling comfortable. Now that we have been around for four years, that conversion rate is increasing because people have been following us. They are starting to trust us. It is now that we are starting to realise the benefits,” says Ms Weymuller.
She credits the company’s education programme, which tells people what angel investing is and how they can get involved, for that success.
“I joke around with people and say with our education pillar we are kind of becoming an investor accelerator because that is what we are trying to do, to encourage that,” she says.
The minimum investment depends on the deal but is typically about $15,000.
“Everyone thinks of this region and thinks of family offices with deep pockets of money, but there is a whole untapped pool of capital lying with ‘normal people’, like you and I. Young professionals in their 30s and 40s. We don’t have $500,000 to put in a company. We might have $15,000 or $20,000,” she says.
Investors get involved for many reasons, says Ms Weymuller. Some of them invest for the reasons already mentioned. Others want to be part of something which could become big without risking it all themselves, she says. “Even if you yourself haven’t quit your day job to do this, you are still part of the story nonetheless.”
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ADCC AFC Women’s Champions League Group A fixtures
October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
October 9: v Sabah FA
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ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
England v West Indies
England squad for the first Test Cook, Stoneman, Westley, Root (captain), Malan, Stokes, Bairstow, Moeen, Roland-Jones, Broad, Anderson, Woakes, Crane
Fixtures
1st Test Aug 17-21, Edgbaston
2nd Test Aug 25-29, Headingley
3rd Test Sep 7-11, Lord's
Education reform in Abu Dhabi
The emirate’s public education system has been in a constant state of change since the New School Model was launched in 2010 by the Abu Dhabi Education Council. The NSM, which is also known as the Abu Dhabi School Model, transformed the public school curriculum by introducing bilingual education starting with students from grades one to five. Under this new curriculum, the children spend half the day learning in Arabic and half in English – being taught maths, science and English language by mostly Western educated, native English speakers. The NSM curriculum also moved away from rote learning and required teachers to develop a “child-centered learning environment” that promoted critical thinking and independent learning. The NSM expanded by one grade each year and by the 2017-2018 academic year, it will have reached the high school level. Major reforms to the high school curriculum were announced in 2015. The two-stream curriculum, which allowed pupils to elect to follow a science or humanities course of study, was eliminated. In its place was a singular curriculum in which stem -- science, technology, engineering and maths – accounted for at least 50 per cent of all subjects. In 2016, Adec announced additional changes, including the introduction of two levels of maths and physics – advanced or general – to pupils in Grade 10, and a new core subject, career guidance, for grades 10 to 12; and a digital technology and innovation course for Grade 9. Next year, the focus will be on launching a new moral education subject to teach pupils from grades 1 to 9 character and morality, civic studies, cultural studies and the individual and the community.
Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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The full list of 2020 Brit Award nominees (winners in bold):
British group
Coldplay
Foals
Bring me the Horizon
D-Block Europe
Bastille
British Female
Mabel
Freya Ridings
FKA Twigs
Charli xcx
Mahalia
British male
Harry Styles
Lewis Capaldi
Dave
Michael Kiwanuka
Stormzy
Best new artist
Aitch
Lewis Capaldi
Dave
Mabel
Sam Fender
Best song
Ed Sheeran and Justin Bieber - I Don’t Care
Mabel - Don’t Call Me Up
Calvin Harrison and Rag’n’Bone Man - Giant
Dave - Location
Mark Ronson feat. Miley Cyrus - Nothing Breaks Like A Heart
AJ Tracey - Ladbroke Grove
Lewis Capaldi - Someone you Loved
Tom Walker - Just You and I
Sam Smith and Normani - Dancing with a Stranger
Stormzy - Vossi Bop
International female
Ariana Grande
Billie Eilish
Camila Cabello
Lana Del Rey
Lizzo
International male
Bruce Springsteen
Burna Boy
Tyler, The Creator
Dermot Kennedy
Post Malone
Best album
Stormzy - Heavy is the Head
Michael Kiwanuka - Kiwanuka
Lewis Capaldi - Divinely Uninspired to a Hellish Extent
Dave - Psychodrama
Harry Styles - Fine Line
Rising star
Celeste
Joy Crookes
beabadoobee
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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
'My Son'
Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
Three ways to get a gratitude glow
By committing to at least one of these daily, you can bring more gratitude into your life, says Ong.
- During your morning skincare routine, name five things you are thankful for about yourself.
- As you finish your skincare routine, look yourself in the eye and speak an affirmation, such as: “I am grateful for every part of me, including my ability to take care of my skin.”
- In the evening, take some deep breaths, notice how your skin feels, and listen for what your skin is grateful for.