Posted on February 6, 2019
More than USD 300 million were invested over the past ten years in funding in excess of 400 startups and SMEs in Lebanon in an effort to strengthen the entrepreneurial ecosystem in the country, resulting in the launch of hundreds of companies, the creations of thousands of jobs, the development of innovative products and solutions and the retention of top talents in the region.
Berytech, the first and largest player in this sector, has funded over the past 8 years more than one hundred companies through its funding arms (Berytech Fund I, Berytech Fund II, IM Capital), accelerators (Agrytech and Speed) and business angel funds (Seeders and LWAF).
The ultimate measure of success for the entire entrepreneurial ecosystem and all its players is not only in the number of companies and jobs created but in the entrepreneurial and financial value created by these companies throughout their tenure, varying between 5 to 10 years, with their related investors.
The best way to measure the financial value created by the hundreds of startups and SMEs funded over the past ten years is through the following two steps :
In summary, the ultimate measure of success for the many investors active in the Lebanese ecosystem depends on the following essential dimensions :
We sat down with veteran Sami Beydoun for a quick Q&A about exiting. Beydoun is currently the Vice Chairman of Berytech Fund II and Managing Partner of Berytech Fund I. He spent most of his career with major US investment banks, namely Merrill Lynch, EF Hutton, Shearson American Express and Lehman Brothers, in Beirut, New York, and London.
Berytech: Why is exiting important for BFI?
Samy Beydoun: As Berytech Fund I, we have an obligation to our investors to return back to them their investments plus profit within a 7-year period. This can only be done by exiting from our portfolio companies.
B: What are the challenges of exiting today in Lebanon?
SB: Lebanon does not have a developed secondary market through which to exit.
B: What are the different ways you employ to exit a company you have invested in?
SB: Four different ways of exiting: 1. Selling to a strategic investor who is interested in the technology and venture. 2. Selling to financial investors. 3. Selling to another fund who is looking to acquire companies matching the profile of our portfolio companies. 4. A management buyout i.e. selling back to the founder.
B: How long is the exiting process taking?
SB: Currently it takes up to two years to exit a company. The big challenge is finding an interested party willing to acquire a Lebanese company in the secondary market.
B: What are the pre-requisites for a good exit?
SB: Most important is for the portfolio company to show growth.
Constantin Salameh is a Senior Coach and Investment Advisor at Berytech. He has coached and mentored dozens of entrepreneurs and executives in Europe, the Middle East, and Africa over the past 35 years.