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Strictly confidential – for internal use only
William C. Fellows
ENTREPRENEURSHIP, ACCESS TO
CAPITAL & SMES IN MENA:
SUPPLY? DEMAND?
THE ISSUES:
OECD – MENA
5th SME Working Group
22 February 2011, Casablanca, Morocco
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
2 2
The Key Question
• Problem: funds not flowing as desired to Entrepreneurs,
& Small & Medium Sized firms.
• Frequent observation in region:
– Banks are not taking risk
– Venture investors are not taking risk.
• First reactions: find ways to move more funds to SMEs.
– But are we asking the right questions and enough questions?
– Re Risk & Funding: To the extent true (and not always), we
need to ask WHY? What drivers, fundamentals?
2 March 2011 William C. Fellows 2
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
3 3
The Supply & Demand Question & Policy.
• Access to Capital:
– Demand: Entrepreneurs / Enterprises
– Supply: Financial Institutions (credit/debt, equity)
• Challenge: sustainable access to funding for
investment for SMEs, and particularly
entrepreneurial SMEs in early stages.
• Known:
– Relative to apparent demand, appears to be problem of
access.
• Assumptions? Where is the problem?
2 March 2011 William C. Fellows 3
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
4 4
SME Typology: Who are we talking about?
• Gazelles: High-Potential SMEs / SME Champions
– Outstanding SME focused on growht, with high prospects, usually highly innovative (e.g. IKEA
in early days)
• Entrepreneurial SME
– An SME that generates good profits, but may not seek growth (e.g. small traditional packaging
firm).
• Lifestyle SME
– An SME that is more focused on the owner‘s lifestyle (e.g. small boutique hotel with no desire
to grow).
• Ordinary SME / Traditional SME
– A small enterprise with minimal profits to its owner, usually very traditional. (e.g. Traditional
textile exporters, individual artisans)
• “Hobby” or Casual Business (Very small enterprise)
– A very small business operated on the side; not as main activity, no serious intention to make the
business grow.
• Craft, Traditional Very small enterprise
4
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
5 5
Looking at Demand Side via Risk Capital
• Reflect on Access to Finance on Demand side via
the lens of Equity Financing (VC, etc).
– Why VC as lens?:
• Equity Funding (Risk Capital) neglected component in
Policy Discussions.
• Equity cares more about internal quality of SME / quality of
Entrepreneur(s).
• Focused on high-impact Entrepreneurs seeking to build firms
that will drive competitiveness, the key need in region.
– In Maghreb decent level of Venture Capital available.
2 March 2011 William C. Fellows 5
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
6 6
Developing MENA Funds (2008)
2
86
1 9 1 6
48
12 18 9 1
36
534
46
627
453
290
12
266
7
733
54
181
0
100
200
300
400
500
600
700
800
Capital Raised Fund Stages (Select Countries, NA & Comp)
Millions US$, 2008
R&D
Seed
VC
Growth
LBO
101 138
10 21
1378
299
46
375 427
23
251
77
178 185
18
0
200
400
600
800
1,000
1,200
1,400
1,600
Funds in North Africa
(Select Countries) Millions US$, 2008
Consumer Goods
Energy
ICT &
Innovation
Multi-Sector
Other Industries
Construction & Public
Works
Services
2 March 2011 William C. Fellows 6
Source: ANIMA April 2008 “Med Funds: Overview of Private Equity in the MEDA Region”
Most
“Maghreb”
Funds go to
Morocco,
~50%, then
Tunisia
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
7 7
Supply vs Demand Reflection
• Assumption: Provide the capital and Entrepreneur
Access to Capital/Finance problem solved.
– Good evidence that this is not true.
• Moroccan regional risk capital funds experience
• Negative returns in venture funds
– Arguments to lower standards
• Do we have the capital to waste?
• If Quality of SMEs is low, there will be high levels of losses.
– For Example: High level of Bad Credit in Banks
• How ―eligible‖ (i.e. sustainable) is the SME demand?
• All Evidence says SMEs need serious upgrading, especially
in Human Resources (Management).
2 March 2011 William C. Fellows 7
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
8 8
Entrepreneur / SME issues
– Limited social capital (TRUST &UNDERSTANDING of
PRACTICE)
– Limited Entrepreneur networks & skill sets in Mgmt,
and limited connections with financing
– Limited and outdated legal forms for structuring
investments to meet both Venture Investors (Angels,
VCs, etc) & Entrepreneur expectations
– Lack of RETURNS on Capital.
• Early stage losing substantial money.
• Why?
– Weaknesses in firms, weakness in gmt w entrepreneurs
– Tough business climate, investment not enough.
2 March 2011 William C. Fellows 8
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
9 9
SME Quality, VC Impact, Morocco
91%
40%
58%
51%
56%
99%
80%
91% 91% 91%
0%
20%
40%
60%
80%
100%
120%
Audited by a CAC Exiistence of Oversight
Committees by Activity
Existence of Reporting Systems Existence of Performance
Indicators
Existence of Budgeting Policies
& Budget Oversight
At time of Investment To Date (mid 2010)
2 March 2011 William C. Fellows 9 Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
10 10
Key driver to lack of funding to Entrepreneurs
& SMEs
• ―A key reason that financing funds’ flows to emerging-market
SMEs are insufficient—especially for investments in the range
of $100,000 to $1.5 million—is that returns are not fully risk-
adjusted.‖
– Milken Institute, “Stimulating Investment in Emerging-Market SMEs,
Financial Innovations Lab Report” 2009
– Translated from Finance Speak:
Overall Profits / Returns to Investors in SMEs & Entrepreneurs from
venture investments are not covering the losses or are not attractive
enough to pull money away from “more certain bets” like Real Estate
(perception of RE as a safe & sure thing quite common, despite the 2008
crisis!).
WHY POOR PROFITS, POOR QUALITY.
– Without an ability to make good profits… capital simply will not be
sustainably invested in Entrepreneurs.
2 March 2011 William C. Fellows 10
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
11 11
Observation (Milken Inst. again)
― Entrepreneurs often need a great deal of
technical assistance in putting their companies’
financials in order, marketing, and other
initiatives that could make their businesses
successful.
This increases a fund‘s … expenses and lowers net
returns to investors.
Because they are not fully compensated for the risk,
investors have not embraced the opportunities.‖
2 March 2011 William C. Fellows 11
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
12 12
The Universal Story Capacity constraints &
Building SME Investment
The capacity constraints faced by risk funds in developing markets
across the globe are similar:
• Lack of good legal / investment structures to manage risk, find
common ground with Entrepreneurs
• Challenge to get good deal flow creation: eligible SMEs /
Entrepreneurs
– Too many 1 entrepreneur shows… not enough teams.
• Lack of good ―hands on‖ investor skills (VCs need to upgrade
too)
• Not enough resources in Funds to add value relative to needs of
SMEs
• Lack of profitable returns (exits) on SME investments .
2 March 2011 William C. Fellows 12
Adapted from : Capacity Constraints Facing Risk Fund Managers - Final report, Financing for Growth, 2008
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
13 13
VC Performance, Morocco
6% -6%
26% 27%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Seed Venture Growth Transmission
2 March 2011 William C. Fellows 13
• Reported IRRs to Mid 2010
Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
14 14
VC Performance, Exits (Morocco)
2 March 2011 William C. Fellows 14
Management
Buy Back, 41%
IPO, 31%
Trade Sale, 21%
Liquidation, 4%
Sale to
Financial Buyer,
3%
Exits by Type (No.)
IPO, 64%
Trade Sale,
23%
Managemet
n Buy Back,
10%
Financial
Buyer, 3%
Perc. Capital Returned
by Exit Type
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
15 15
Entrepreneur (Demand) Side Issues
• Less-than-ideal management practices prevalent in
region to overcome environment
• Acceptance of Role of Outside Investors:
– Sharing ownership, high level governance controls
• Acceptance of Applied Good Governance
– Old school family forms reality
– Modernized mgmt styles needed
2 March 2011 William C. Fellows 15
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
16 16
Resolving Investor & Entrepreneur Interests
VC/Equity Investor Objectives
Objectives of Equity Investors
• Maximum Return (IRR; X return)
• Large Equity participation
• Liquidity • IPO
• Merger or Trade Sale
• Put back to the Company
• Hedge Risk
Entrepreneur Objectives
• Keep as much equity as
possible
• Keep control of operations
• Incentives for founders (& key
employees)
– MENA very weak in providing
incentives, sharing control
internally with non-founders &
especially non-family
• Keep restrictions to a minimum
• Keep in the Family (MENA)
2 March 2011 William C. Fellows 16
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
17 17
SME Quality, VC Impact, Morocco
91%
40%
58%
51%
56%
99%
80%
91% 91% 91%
0%
20%
40%
60%
80%
100%
120%
Audited by a CAC Exiistence of Oversight
Committees by Activity
Existence of Reporting Systems Existence of Performance
Indicators
Existence of Budgeting Policies
& Budget Oversight
At time of Investment To Date (mid 2010)
2 March 2011 William C. Fellows 17 Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
18 18
Capital for Entrepreneurs, Sources
2 March 2011 William C. Fellows 18
Owner Capital
Family & Friends
Angels
Venture Capital/PE
Banks Buyout
IPO
Sale
Venture Financing Cycle
Breakeven
Angels,
Friends, Fools
& Family
Seed Capital
Early StageLater Stage
VC Acquisitions/Mergers &
Strategic Alliances
Exit (IPO,
Trade
Sale)
1st
2nd
3rd
Mezzanine
R
E
V
E
N
U
E
TIME
Valley of Death
Secondary
Offerings
Public
Market
The Enterprise & Funding Sources over Time
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
19 19
New Choices?
• Angel Capital?
– Good concept, however, requires (to be real sustainable
solution):
• Good Social Capital:
– Understanding of the
• Acceptance of outside investors on standard terms
– And outside investors who are also playing the game
– Legit worries by Entrepreneurs re ‗Faux Angels‘ taking over the
enterprise
– But what is the core motivation for promoting?:
• Increase funding to high-value start-ups, small-firms? (or
small firms generally?)
2 March 2011 William C. Fellows 19
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
20 20
Recall the Issues
• Positive role to play, but issues undermining
venture capital funds also hit Angels:
– Limited and outdated legal forms for structuring
investments to meet both Venture Investors (Angels,
VCs, etc) & Entrepreneur expectations
– Limited social capital (TRUST &UNDERSTANDING of
PRACTICE)
– Limited Entrepreneur networks & skill sets in Mgmt,
and limited connections w venture financing
– Lack of RETURNS on Capital.
2 March 2011 William C. Fellows 20
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
21 21
Returns, Why do we care?
• After all, investors are rich, right?
– Many funds are investing your retirement money.
• Investment in Entrepreneurs, SMEs competing
against other capital uses.
– EG: Real Estate (particular challenge in MENA)
• As one Angel told me, he hears all the time ―Why fund a risk
enterprise when you can get 50% in RE speculation.‖
– Without good returns, SMEs will be starved of capital
– Good returns also indicative of competitivenes and
MENA region needs more competitive enterprises,
more higher value, non-traditional enterprises.
2 March 2011 William C. Fellows 21
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
22 22
2 March 2011 William C. Fellows 22
The Risk, Profitability / Return Trade Off &
Financing Entrepreneurs / SMEs
Investment Returns Needed
Early Stage Growth Stage
• Investors seeking:
• Strong Management Teams
• Good Market Potential
• Revenue Traction
• High Upside Potential
• Large and Growing Markets
Late Stage Seed Stage
Ret
urn
Targ
et
20 x
1 x
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
23 23
North American Venture Capital Standards
2 March 2011 William C. Fellows 23
Stage Of
SME
Expected Annual
Investment Return
Expected Increase
on Initial Investment
Start-up SME
(idea stage)
60% + 10–15 × investment
First-stage financing
(new SME (1-3 years))
40%–60% 6–12 × investment
Second-stage financing
(development stage (some
profit record))
30%–50% 4–8 × investment
Third-stage financing
(expansion stage)
25%–40% 3–6 × investment
Turnaround 50% + 8–15 × investment
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
24 24
Solutions, How to Address?
• We can‘t jump over these problems but how to
render them digestible:
• Enviro / Framework
– Need to look at breaking out into the key barriers to
Improve Returns to investing in SME from the Private
POV
• SME Quality
– How to help. Technical Assistance frequently wasted if
behind closed doors obs…
– And the volume of SMEs is huge!
2 March 2011 William C. Fellows 24
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
25 25
Environment: Where to go?
• Review Regulatory to remove barriers, follow best
practice:
– Enable investment & flexibility for CHANGE, do not
impose hard requirements
• Hard handcuff requirements are failures (See Lerner, Josh.
Boulevard of Broken Dreams (2010))
– Legal vehicles / Forms for Entrepreneurs & Investors:
• Reform and modernize to make EASY & Cost Effective to
use (e.g. Delaware LLC, France‘s reformed SAS);
– Restrictions on issues like Preferred Share structures, Quasi Equity
funding
2 March 2011 William C. Fellows 25
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
26 26
SME Quality & Returns
• Improve Returns to financing of Entrepreneurs /
SMEs? (That is make more attractive)
– Improve SME bottom-lines (profits) by improving
their competitiveness
• Targeted business development services to higher potential
SMEs (coming back to this)
• Improved overall business environment
• Improve investment tools
– Better corporate vehicles / forms for entrepreneurs & investors
– Improve liquidity tools (exits)
• Alt approaches
• Better public markets / alt markets
2 March 2011 William C. Fellows 26
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
27 27
Environment as Virtuous Cycles
• Bad Money drives out good
• Strong standards bring in better practice, money.
– Moroccan banking case as an example
2 March 2011 William C. Fellows 27
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
28 28
Bank Funding to SMEs (WB & Union of Arab
Banks)
SME Loans as percent of total lending.
Funding availability to smaller firms in the Maghreb has significantly improved, making raising debt for smaller-sized
investments more attractive, although regulators are watching leverage ratios.
2 March 2011 William C. Fellows 28
0.50% 1% 2% 2% 2% 2%
4% 4% 5% 6%
13%
15% 15%
16%
20%
34%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Source: "The Status of Bank Lending to SMEs in the Middle and North Africa Region‖ The World Bank Washington DC, June 2010.
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
29 29
Moroccan Lending Growth, post Reform
327
372
437
516
573
602
200
225
275
359
447
500
2004 2005 2006 2007 2008 PCEC 2009 PCEC
Deposits vs Lending Growth
Morocco All Banks
Total Deposits for All Banks Total Lending for All Banks
61%
60%
63%
69%
78%
Dirhams,
Lending As Percent of Deposits
83%
145
163
201
251
295
329
85 91
114
146
180
202
2004 2005 2006 2007 2008 2009
Dir
ha
ms,
Bil
lio
ns
Moroccan Bank Lending Significant Increase in Corporate
(2004-2008) (sources: Bank Annual Reports, BAM Supervision Annual
Report)
Corporate Lending, All Banks Corporate Lending, Big 3
2 March 2011 William C. Fellows 29 Source: Central Bank Supervision Reports 2004-2009 and bank annual reports.
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
30 30
Moroccan Bank Lending Profile
2 March 2011 William C. Fellows 30
Households
28%
Financial
Activities
14%
Trade
7%
Trans. &
Comm.
4%
Hotels
3%
Construction
14%
Processing
Industry
18%
Primary Sector
3% Other Services
10%
Morocco Bank Lending
By Sector (2009)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2003 2004 2005 2006 2007 2008 2009
12.3% 12.4%
9.6%
7.4%
5.3% 4.3%
4.2%
18.7% 19.4%
15.7%
10.9%
7.9%
6.0%
5.5%
Morocco Bank Non Performing
Loans
Improving Credit Management
%NPLs, Private Banks % NPLs, All Banks
All Bank
NPL% down
70.5% 03-09
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
31 31
Marry TA to SME w investment funds.
―Technical assistance—consulting an individual or group that has business or
finance experience on how to improve various aspects of a business—is critical to
emerging-market SMEs and can help enhance a company‘s value. Although the cost
of technical assistance can be substantial, it is one of the best ways to mitigate
investment risk. To prevent technical assistance from draining a commercial SME
fund of its revenue, investors can work with development institutions, governments,
foundations, and NGOs to create grant-based pools of funding to pay for technical
assistance to portfolio investees.
The net return on the investment in such a fund should be higher because of the
associated cost reductions for the fund itself and the improved performance of
portfolio businesses. As a result, more commercial investors would be attracted to
these funds while helping philanthropic organizations meet their objectives. Public
institutions can use their capabilities to leverage greater private capital for SME
investment funds.‖
2 March 2011 William C. Fellows 31
Source: Milken Institute: Stimulating Stimulating Investment in Emerging-Market SMEs Financial Innovations Lab Report, 2009
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
32 32
Focus in on Matching Mechanisms btw Investors &
Entrepreneurs (in their hands)
• ―Mechanisms are needed to match investors with projects that need
funding. …
• …such mechanisms would move beyond ad hoc, project-by-project
investments to create a more efficient marketplace. This need is
especially great given the information asymmetries in developing
countries.
• Investors find it difficult to identify appropriate investments, and
entrepreneurs have trouble locating sources of capital. Making
opportunities more visible would reduce investors‘ transaction costs
and increase the availability of capital for SMEs.‖
2 March 2011 William C. Fellows 32
Source: Stimulating Stimulating Investment in Emerging-Market SMEs, Financial Innovations Lab Report, 2009
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
33 33
TIME FOR DISCUSSION
End of Presentation.
2 March 2011 William C. Fellows 33
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
34 34
ENTREPRENEURS & RISK
FINANCING: VENTURE FINANCING
LANDSCAPE IN NORTH AFRICA, THE CONTEXT FOR ACCESS TO CAPITAL
Maghreb & North Africa VC & PE
(excluding Real Estate & Infrastructure) Reference Slides
2 March 2011 William C. Fellows 34
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
35 35
Morocco Funds Structure
2 March 2011 William C. Fellows 35 Source: FSVC research and adapted fromANIMA Study – April 2008 “Med Funds: Overview of Private Equity in the MEDA Region
Moroccan PE/VC Funds by Size
62%
10%
23%
0% 5%
<$50m $50 to 100m $100 to 500m >$500m Announced funds
86 48
534
266
R&D Seed VC Growth LBO
86 48
534
266
Consumer
goods
Energy ICT &
Innovation
Multi-sector Other
industries
Funds announced by Investment Stage (in $USm)
86 48
534
266
R&D Seed VC Growth LBO
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
36 36
Maghreb Investment Style: Diversified & Small
2 March 2011 William C. Fellows 36
1
18 19
31
15
5
3
8
1 0
5
10
15
20
25
30
35
0 to
1
1 to
5
5 to
10
10
to 2
0
20
to 3
0
30
to 4
0
40
to 5
0
> 5
0
NC
Number of Deals by Capital Invested
(2010)
Millions Moroccan Dirhams
Small Investments
50%
18%
13%
12%
7%
Invested Companies by %
Capital Acquired (2010)
5 - 34% 34 - 50% > 67% < >50 - 67% < 5%
Source: Adapted from Moroccan VC Association (Association Marocain des Investisseurs en Capital,) July 2010 to mid year
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
37 37
VC Performance, Morocco
Revenue Growth, Invested
Cos, by Invest Stage
97%
21% 17% 19% 0%
20%
40%
60%
80%
100%
120%
Investment Stage Shares of total
portfolio.
Growth, 61% Venture, 15%
Transmission
13%
Turnaround,
6%
Seed,
5%
2 March 2011 William C. Fellows 37 Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
38 38
VC Performance, Morocco
6% -6%
26% 27%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Seed Venture Growth Transmission
2 March 2011 William C. Fellows 38
• Reported IRRs to Mid 2010
Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
39 39
SME Quality, VC Impact, Morocco
91%
40%
58%
51%
56%
99%
80%
91% 91% 91%
0%
20%
40%
60%
80%
100%
120%
Audited by a CAC Exiistence of Oversight
Committees by Activity
Existence of Reporting Systems Existence of Performance
Indicators
Existence of Budgeting Policies
& Budget Oversight
At time of Investment To Date (mid 2010)
2 March 2011 William C. Fellows 39 Source: Adapted from Association Marocain des Investisseurs en Capital, pre release data July 2010
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
40 40
VC Performance, Exits (Morocco)
2 March 2011 William C. Fellows 40
Management
Buy Back, 41%
IPO, 31%
Trade Sale, 21%
Liquidation, 4%
Sale to
Financial Buyer,
3%
Exits by Type (No.)
IPO, 64%
Trade Sale,
23%
Managemet
n Buy Back,
10%
Financial
Buyer, 3%
Perc. Capital Returned
by Exit Type
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
41 41
Guaranty for VC
• ―As downward protection acts against the investor‘s targeting the maximum
yield, it tends to promote the survival of venture capital investors instead of
enhancing the success of their investments. Hence the clearly observable
tendency that the more advanced the venture capital industry of a given country,
the more unlikely that downward protection play a major part in encouraging
venture capital. In the USA and in the United Kingdom, venture capital
programmes supported by the state tend to focus on raising the returns to private
sector investors. On the other hand, in Continental Europe, every one of the more
significant countries (France, Germany, Sweden, the Netherlands, Denmark) has
public programmes including the direct guarantee component.‖ Karsai, Judit.
―Can The State Replace Private Capital Investors? Public Financing of Venture
Capital In Hungary.‖ Discussion Papers MT–DP. 2004/9, Institute of Economics
Hungarian Academy of Sciences Budapest June 2004, p. 7
• Mason, Colin. ―Public Policy Support For The Informal Venture Capital Market In Europe: A
Critical Review‖ Working Paper 08-07 Hunter Centre for Entrepreneurship, University of Strathclyde
Business School, December 2008, p. 10
2 March 2011 William C. Fellows 41
Conseil de la Fondation
16 Octobre 2009
Hicham Y. Alaoui
Directeur Exécutif
42 42
FSVC MAGHREB
William C. Fellows
Directeur Régional (Regional Director, North Africa / Maghreb)
FSVC
26 Boul. Massira El Khadra, 3e étage
Casablanca, le Maroc 20100
wfellows@fsvc.org
www.fsvc.org
2 March 2011 William C. Fellows 42