Public Policy For Venture Capital: A Comparative Study Of Emirates, Saudi Arabia And Egypt

This study presents an integrated public policy framework for supporting the emergence of a venture capital industry, from both supply and demand perspectives. The framework is applied to the case of venture capital evolution in three Arab countries, namely United Arab Emirates, Saudi Arabia and Egypt. In each country case study, five public policy mechanisms are analyzed using both primary and secondary information. Comparative analysis of the country case studies shows that the three countries have made varying levels of progress on company registration procedures and development of an entrepreneurial ecosystem. More work is needed to simplify bankruptcy and other regulatory obstacles to venture capital funds, such as the limited partnership structure and the use of convertible stock. The three countries have limited venture capital supply from a few government and private venture capital funds, primarily due to demand side weaknesses and a meager flow of investible enterprises. Strengthening the demand side should form the primary focus of government reforms in the near future, in addition to demonstrating successful and profitable venture capital investment. The latter is a key step in putting together the pre-conditions for the emergence of active venture capital industries in the three countries