Accelerating the Egyptian Venture Capital Ecosystem with Falak Startups
Egypt’s startup ecosystem has grown considerably over the past decade and the venture capital system backing it is fast evolving. The number of active venture capital firms in the country is also on the rise, both locally-born and international. The ecosystem experienced a 168% year-on-year increase in capital investment by the end of 2021, according to Magnitt’s 2022 Egypt Venture Investment Report.
While the numbers have faltered slightly due to the global economic slowdown in 2022, Egyptian venture capital is still going strong. They are however, experiencing some growing pains, with multiple local VC funds struggling to navigate the rough waters of generating successful exits and returns for their LPs in a turbulent economic climate.
Having experienced this first-hand, Falak Startups – an early-stage venture capital firm – is on the mission to empower both the startup ecosystem and the VC community within the country and the Middle East. They believe that tapping into the expertise of VCs with decades of experience will help boost the knowledge of the local community.
Boosting the Egyptian VC Ecosystem
In November 2022, Falak Startups, in collaboration with the European Bank for Reconstruction and Development, invited the Strategy Tools team to run a Fund Manager! Bootcamp in Cairo, Egypt.
Prior to the bootcamp, the Falak team also experienced a one-day intense training session on how to effectively facilitate the Fund Manager! Simulation.
Over the next two days, 50+ participants across the Egyptian venture capital ecosystem converged to develop a fund strategy, raise a fund and ultimate create successful exits and returns. The participants hail from Egypt, Saudi Arabia, UAE and the US representing different experience areas and levels from various VCs and Angel Investment Networks, as well as lawyers, entrepreneurs and students.
“The VC ecosystem in Egypt is still on the rise and relatively new. The focus has always been on raising for startups, but very little emphasis is put on what it means to generate returns for the LPs, how we can select the best startups and how to generate successful returns,” said Nihal El Chami, Head of Marketing and Program at Falak Startups.
“We wanted to bring in venture capital experts who have been doing this their entire career to guide the VCs here – but we wanted to do it in a fun way that’s based on real life practices. We don’t want to bring in experts for a theoretical masterclass – but rather one that practical and engaging,” she added.
By bringing the Fund Manager! Strategy Simulation to Egypt, and experiencing first-hand how powerful it is as a learning tool, Falak Startups has now positioned themselves as a major player in the VC and startup ecosystem in the country.
“Falak Startups wants to grow beyond being just an investor – we want to play a role in helping our startups succeed as well as educating the larger ecosystem in a way that no one has ever experienced before,” said Nihal.
“Learning what we have learned during the Fund Manager! Bootcamp has definitely made us shift our selection criteria on the startups we invest in, as well as our strategy towards running our funds,” she added.
Due to the successful of the event in Dec 2022, Falak Startups is now planning several more upcoming workshops across 2023.
The Strategy Tools Team in Egypt. From left: Rick Rasmussen, Christian Rangen, Adelina Manolache
Facilitator Reflections by Rick Rasmussen
We had an extremely interesting mix of top talent from across the Egyptian investment spectrum.
There were individuals who had run large international funds, corporate innovation specialists, angel investors, angel group managers, government officials and more. Differing backgrounds, differing goals and looking for individual outcomes.
When organizing such a large and diverse group, it’s important that everyone is able to have an understanding of the overall process of fund development including concepts, vocabulary and use cases.
We deliberately took the time to start both days with basic education on investment and investment strategies. We organized breakout sessions throughout the program to huddle and focus on specific goals and outcomes. But, the real learnings came from the participants themselves.
The teams were in competition with each other and it was important for each of them to have their newly formed funds have strong results. Grouped in teams, individuals within teams have defined roles such as Managing Partner, Fundraising Director, Investment Director and more.
The teams shared actively shared knowledge and best practices. Some ran numbers, some ran the board, some ran deals. A room full of 40 people going full blast for two full days with so much energy, creativity and competitive spirit was a sight to behold.
“The Fund Manager! Simulation marked a milestone in the world of venture capital for the region. We worked out strategies as part of an actual fund manager team that would get funding from like-minded people. It gave us a head start into knowing how to work as founders together with investors for boosting business performance.”
Ahmed Hazem Dakroury, Managing Director at Falak Startups
About the Fund Manager! Strategy Simulation
The Fund Manager! Fund Strategy Simulation is a highly immersive, interactive experience to puts you in the shoes of the founding team of a new investment company. Your goal is to raise a fund and invest in successful companies. You compete with other world-class funds on achieving the best fund performance.
The simulation will enhance and upgrade any educational program. Strategy Tools also delivers Bootcamps and Masterclasses for emerging fund managers and VC ecosystems around the world – both online and in-person. Interested to learn more?