Microsoft and Arab Business Angels launch local entrepreneur fund

Software giant Microsoft recently announced a partnership with seed capital fund Arab Business Angels Network to look for young entrepreneurs with an ambitious vision of the future.

Oklahoma Senator Owen Laughlin famously said: "Money never starts an idea - It is always the idea that starts the money." It's especially true in the Middle East, where, despite the rapid influx of wealth from record oil prices and a bullish real estate market, the market for ideas remains resolutely weak.

There are quite a few organisations in the region who would like to see this situation improve, and more individuals emerge from the region with true entrepreneurial zeal.

One of these groups is the Arab Business Angels Network (ABAN), which recently signed a Memorandum of Understanding (MoU) with Microsoft, in a partnership which will see both working towards identifying and funding innovative technology start-ups.

Walid Hanna, ABAN's CEO, says the organisation was started three years ago with the aim of promoting growth of entrepreneurship in the Middle East region. "The initiative came from the Young Arab Leaders - they went along with Dubai Holding to the Clinton Global Initiative in 2005 to create the concept. Then, as part of Dubai Holding, Dubai International Capital took the whole thing, funded it and created the company," he explains.

ABAN‘s first attempts to promote entrepreneurship was a pan-Arab business plan competition which drew 1000 entries from across the region. Two companies from Egypt and Jordan won the contest and US$2.5 million in investments.

Hanna's first job as CEO was to close the two initial deals and begin building the network of Angel investors. Currently, ABAN has closed a further four deals with start-up firms and now manages a $15 million fund, of which $5 million is earmarked solely for female-led ventures.

Rani Saad, regional manager for innovation development at Microsoft Middle East and Africa explains how the collaboration with ABAN began: "We were invited to attend one of their events and effectively followed up afterwards - we got together later and discussed potential for collaboration. That's how we started the conversation.

"We're both very interested in effectively going after innovative firms that are operating in the technology space - specifically the software space for us. Of course, ABAN's charter expands beyond the software space but we are going to collaborate with them only on that," he adds.

Saad explains that Microsoft has philanthropic aims with this partnership: "On a fundamental level, we want to help innovative startups succeed. What ABAN provides of course is the financial investment. What we provide is an infusion of intellectual capital.

What we can primarily provide is expertise and technology development and software business management, such as product and project management. We have market access, partner ecosystems and of course, a very strong brand. These are all things we could provide as needed."

He continues: "The other means of assistance include things like taking them through acceleration programs which cover software business management that would include product and project management. This will also include sales and marketing help. Potentially, they could also be helping them connect to other partners or getting to customers they want.

"In the Middle East and North Africa, we have a number of innovation centres where we provide those acceleration programmes - which are effectively training and skills development programmes that can take individuals, entrepreneurs and businesses through training, up to a whole year of curriculum. This can help understand the technology, build a software company and go for a specific market," says Saad.