CAIRO: To promote entrepreneurial activity, Egypt needs to work on developing a risk-taking culture as well as access to capital, said an expert at a venture capital conference Wednesday.
Victor Hwang, co-founder and managing director of T2 Venture Capital, also stressed the importance of building ideas, interaction with world markets as well as investing in top talent.
Endeavor Egypt hosted an event titled “Building a Thriving Venture Ecosystem: A Round Table for Entrepreneurs, Venture Capitalists and Angel Investors, bringing together leaders in Egyptian business to build a network of support and mentorship for the country’s most promising entrepreneurs.
Ahmed Ezzat, managing director of Endeavor Egypt, moderated the discussion, which featured Hwang, who is also a Kaufman Fellow.
Those in attendance represented the “top talent and expertise component, bringing together a diverse range of potential mentors, from investment bank EFG-Hermes to the Institute for International Education.
Ideavelopers, the dedicated venture capital subsidiary of EFG-Hermes Private Equity and one of the region’s first companies dedicated to venture development services, was represented by CEO Ahmed Gomaa, Hany Al-Sonbaty and Tarek Assaad, all of whom expressed interest in Endeavor’s goal of “transforming emerging countries by establishing high-impact entrepreneurship as the leading force for sustainable development.
All those in attendance appeared enthusiastic. Many criticized the notion that Egypt is an environment that does not produce entrepreneurs, clarifying that other factors produce an environment that often “kills off potential innovators.
“If a potential entrepreneur manages to overcome the hurdle of the Egyptian education system, he might be killed off by bureaucracy. If he survives bureaucracy, he might be killed off by lack of funds, explained Hussein El-Sheikh from Proseed Venture Capital.
He asked Hwang to provide an idea of how much Egyptians ought to be able to expect from the government in terms of support, based on other countries’ experiences.
Ezzat cautioned that companies mired in bureaucratic constraints would achieve more success by presenting their prepared plans to government agencies and thus pressuring them to change outdated policies, rather than waiting for the policies to change on their own.
Mohamed El-Hawary from Andalucia Financial Consultancy asked Hwang to compare the state of the Egyptian legal framework, in terms of its conduciveness to business, to the United States. Jokes rang out around the table that compared to the level of development in the US, (which Hwang pointed out is by no means 100 percent business-friendly), Egypt’s legal framework is maybe 15 percent developed.
Yet the attitude remained optimistic as participants voiced their support, although Sameh Makram Ebeid warned against trying to construct a formula for creativity.
Hwang emphasized the importance of diaspora businesses, such as those begun by Egyptians abroad, in spotting regional niches and capitalizing on them.
“There is money to be made in fixing regional disparities. I would invest in training young people to go after opportunities for pan Arab businesses, Hwang stated, citing the example of a young entrepreneur in Palestine who developed software to convert legal texts in Arabic, including Sharia, to electronic format.
Ezzat pointed out that “in other contexts around the globe, we have seen time and again that once development begins to occur, it occurs fast regardless of previous generalizations about the culture’s conduciveness, or lack thereof, to innovation. Hwang agreed, pointing out the importance of an environment in which failure is acceptable.
“American venture capitalist John Dor says that he only ever invests in entrepreneurs that have already failed. They are the most motivated to succeed, Hwang laughed.
Ahmad Gomaa from Ideavelopers and Amr Rezk from EFG-Hermes each asked Ezzat for marching orders, wanting to know what those assembled could do to assist Endeavor’s mission. Rezk asked particularly for a consolidated statement with which to approach other potential mentors, investors and supporters, as the necessity of entrepreneurship to economic development is not always universally acknowledged.
As Endeavor Egypt says in its statement, “there is no word for ‘entrepreneurship’ in Arabic.
As Egypt’s first non-profit dedicated exclusively to the business sector, Endeavor has already received support from many of Egypt’s top businesspeople, its board includes Hassan Al-Sayed Abdalla (vice chairman of Arab African Bank), Elijah Bassily (CEO of Virgitech), Khaled Bichara (Group COO, Orascom Telecom Holding), Tarek Mansour (country senior partner, PricewaterhouseCoopers), Hythem El-Nazer (TA Associates), and is headed by chairman Naguib Sawiris (CEO Orascom Telecom Holding).
Endeavor launched as a global initiative in 1997, founded by Linda Rottenberg and operates in developing economies around the world. Founded in 2007, Endeavor Egypt already partners with entrepreneurs Nadia and Hind Wassef from Diwan, Fatma Ghaly from Azza Fahmy Jewelry and Khaled Ismail from SySDSoft.
Endeavor Egypt will host its inaugural International Selection Panel in March 2010.
