The Islamic & Middle Eastern VC Market Despite the fact that there are literally millions of Muslim entrepreneurs in both developed and developing nations looking for investment capital for their new start-up ventures, the realm of the Islamic venture capitalist remains in an evolutionary state. Nonetheless, the untapped potential for Islamic venture capital remains huge. Moreover, the Islamic world has more than its fair share of investors with high-end net worth looking to invest in potentially lucrative deals. Thus, the convergence of both a ‘need’ and a ’supply’ invariably lead to the creation of a new product, and this is equally so in the case of purely Islamic venture capital.
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.
To read the full, original article click on this link: Middle Eastern and Islamic Venture Capital Market
Author: Venture Capital (Blog)
