Startup Financing? One Turk Gets Angel Heavy

Image Capital and entrepreneurs are a cliché. Who doesn’t know that a startup depends on cash infusion? And who hasn’t heard the stories of woe about pulling in a seed and series A round, especially in emerging markets where there is a dearth of venture risk? In 2003, businessman Mustafa Say tweaked that narrative.

Following on from the dot com bust, he put his own money into an Internet fund. “Venture investing was high on top of the agenda for a lot of investment firms,” he told me during eTohum’s Startup Turkey event in Antalya. “Even corporates were setting up venture capital focused on the Internet.” But instead of leveraging others people’s money, Say gambled his own. That, he said, gave him more freedom to risk and be creative.

He launched iLab Ventures. iLab Ventures is housed under the rubric of Access Capital, a full-services investing house. “The structure of iLab would be like a venture capital fund, except we would invest like an angel.” That he said, “wasn’t by design” but imagination. Turkey needed something that could work in the space between angel, private equity, and venture capital. “We had to make our own model.” It’s a model he says that looks at investing truly as an investment – going in for the long term with several rounds with no expectation of immediate returns. Over the past decade, iLab has made 13 investments. In 2011, eBay acquired auction site clone GittiGidiyor, handing the firm, and thereby Turkey, its first exit.

Investing in startups is all the rage. Funds abound, along with a parade of adjectives to describe them: impact investing, patient capital, and mezzanine finance. In speaking to Say, I realized that he too had created a new category of investment finance that I joked could be called “angel heavy.” “You got it exactly right,” he smiled.

Since iLab Ventures has been formed, a number of other Turkish investment funds were formed, including Golden Horn Ventures and most recently 212. Galata Business Angels has an active presence in Istanbul’s growing tech scene. Foreign investment firms Atomico, EarlyBird Ventures, Hummingbird Ventures, and Intel Capital have all rolled out a presence in Istanbul. (Elmira Bayrasli, Forbes, Contributor)
Last modified onSaturday, 06 May 2017 10:07