Vc Fund Formation In The Uae - 10 Leaves

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VC Fund Formation in the UAE - A guide on terms and structures:

Venture Capital is a relatively new term in the GCC region. While the past five years have seen accelerated progress, generally speaking, access to alternate sources of capital – be it angel, seed, VC or Private Equity, has proved to be more difficult than in more robust ecosystems such as Silicon Valley or Bengaluru.

Nevertheless, the region has seen an uptick in the number of deals that are being closed across the spectrum, and many players are now entering the smaller end of the market – the sub-US$ 5 million deals.

Taking note of this increased activity, the two financial free zones of the United Arab Emirates – the DIFC and the ADGM, have made carve-outs in their existing regulations to accommodate smaller VC players and give them access to a well-regulated ecosystem, at a lower entry price point.
We at 10 Leaves have been excited about these initiatives and have offered competitive advice and legal assistance to startup fund managers who wish to establish a presence in these financial centers.
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And we have been at the forefront. The DIFC announced their VC Fund Manager regime in December, and we ended up assisting the first, second and third successful applicants, who went on to make their funds and are now in the process of raising capital.
We are currently advising many more, and we noticed a common thread. While our clients were well-versed at what they do, which is sourcing deals, operating in a well-regulated environment was a new feature. In fact, some of them had decades of experience working in large investment banks, however, they had never got down to managing a startup of their own.

Keeping the above in mind, we saw the need of coming out with a series of informative articles on the VC space in the region – how VC funds are structured, the economics of such funds, marketing and distribution, and the principal documents involved. The annexure also lists our podcast specials like “Terms every Venture Capital Fund Manager should know” and “A Guide to Venture Capital Financings”, besides links to detailed articles, podcasts and videos on setting up in the DIFC, ADGM and Luxembourg.
We believe that this is work in progress, and hence invite contributors to the initiative. The VC landscape is changing rapidly, and there are many technology-based products that are also getting added to the mix. They present an interesting proposition – leveraging the power of tech to assist VCs make more informed decisions, streamline their operational processes and bring more overall efficiency to exits.

If you come across such initiatives, or if you have a startup that spearheads such initiatives, then do write in, and let us know. We are at connect@ability.legal.
And if you want to know how to start…well, you know just whom to call!

Rohit Ghai - Founder - 10 Leaves (+971557088777)
Bishr Shiblaq - Partner - 10 Leaves (+971501002988)
connect@10leaves.ae
PS: This report and it’s contents are not meant to be construed as legal advice. What we have attempted here, is to provide information, and while we have tried our best to add details that we believe are correct, we encourage you to get in touch with us for more updated, and relevant information.

The Venture Capital Series:
1. VC Funds – An Introduction.
2. What are Private Funds?
3. VC Fund structures in the UAE.
4. Lifecycle of a VC Fund.
5. The Economics of a VC Fund.
6. VC Fund marketing and distribution in UAE.
7. VC Fund setup - Documents required.
8. Launch your VC Fund with 10 Leaves.

Bonus material:
Terms every Venture Capital Fund Manager should know (Podcast)
A Guide to Venture Capital Financings (Podcast)
Pitchbook Blog – the data warehouse
Techmeme Blog – your source for what’s happening in tech
Techcrunch – another tech blog
Damodaran Online – a blog from the guru of valuation
The Termsheet
Data-Driven VCs – How 83 VCs use Data, AI and Proprietary Software to drive Alpha returns

Get in touch:
Authorisation enquiries – connect@10leaves.ae
Legal documentation – connect@ability.legal
Visit us at www.10leaves.ae , www.ability.legal