Preliminary observations on socio-economic development – A comparative study of economies

Last month, I was invited to conduct a two-day session on New Product Development by the Institute of Innovation and Entrepreneurship for start-ups in Singapore. I was amazed at the socioeconomic progress made by Singapore since her independence in 1959. A few years back, I read the book, My Life, of Cuban Leader, Mr.Fidel Castro. ...

Using Tawarruq, an Islamic contract, to build high-tech “local” manufacturing industries

Tawarruq is a debt instrument offered in Islamic finance in which a financial institution sells a commodity to a consumer on a deferred payment at cost plus profit, and the customer then sells the commodity on a spot basis to a third party for cash. Tawarruq was often linked to cases of individuals with dire ...

Exploring implementation of Islamic equity contracts in India

Two-Tier Mudarabah model is the basic theoretical model used by Islamic banks to structure Venture Capital (Iqbal and Molyneux; 2005). It is an equity-based structure used to create asset and liabilities where the Islamic bank is placed between investors and depositors who provide money and borrowers and beneficiaries who require money. On the liability side, ...

Challenges faced by first gen entrepreneurs in raising seed capital

We did In-Depth Interviews (IDIs) with select first generation entrepreneurs (in India). Some of them were successful in raising capital for their pre-revenue companies outside of FFF (Friends and Family Funds). We used an open questionnaire to help in the IDIs. Below is the summary of challenges expressed by these entrepreneurs: Investors are buying more ...

Fundamentals of Islamic Finance explained through Islamic Contracts

How the principles of Islamic finance could possibly help in building an egalitarian society from the perspective of creating wealth either through the entrepreneurial spirit of individuals in a start-up or by driving new product development in an established organization, while “box-ing” the unbridled self-interest during the process of wealth creation? Through a series of ...

Can ECV method be used to value pre-revenue companies?

Typically, a pre-revenue company is valued using a combination of financial and non-financial methods viz.: Venture Capital (financial) Dave Berkus (non-financial) Scorecard (non-financial) Risk Factor Summation (non-financial) etc… From the above methods, it seems that the valuation process is more about rationalizing subjective decisions to be taken due to unavailability of financial data. While we ...