What did the SMEs and startups of Turkeyneed?

96% of the world economy is driven by entrepreneurs, start-ups and SMEs. These small- and medium-sized enterprises are the main drivers of economic stability. They recruit morethan 60% of the entire working population of the world. In order for them to contribute more to the economies of their countries, they need to meet with new and financialinstruments quickly. Unfortunately, after the global economic crisis, SMEs, entrepreneurs, and start-ups were unable to access finance as easily as before.

The development of new financial instruments such as crowd-funding, angel investment, acceleration programmes and co-investment funds, and the easing of access to finance forSMEs, entrepreneurs and start-ups therefore play a vital role in economic development.

On the other hand, SMEs, entrepreneurs and start-ups should also be supported by smart public money, so the development of new policies to covert public money to smart moneyplays an important role in creating an entrepreneur-friendly environment. Developing tax incentives, co-investing with angel investors, regulating crowd-funding, providing incentivesfor companies based in technoparks, recognising qualified investors, introducing new, innovative financial instruments, providing capacity building programmes, recognising andawarding success, connecting SMEs, entrepreneurs and start-ups with global investment markets and developing new incubation and acceleration programmes are all vitallyimportant factors in the development of an efficient early-stage investment market in Qatar.

• developing tax incentives

• co-investing with angel investors

• regulating crowd-funding

• providing incentives for companies based in technoparks

• recognising qualified investors

• introducing new, innovative financial instruments

• providing capacity building programmes,

• recognising and awarding the success

• connecting SMEs, entrepreneurs and start-ups with the global investment markets

Two things:

More finance for startups and SMEs

More angel investors

Who could be a fast game-changer?

Policy makers

How did we convince policy makers?

We raised 2 questions:

Policy makers should choose one of them:

Supporting Entrepreneurs and SMEs directly

OR

Supporting the supporters of Entrepreneurs and SMEs

What is the practical way to convert public money to smart money?

What could be the innovative non-bank financialinstruments for the early stage investment market

in Turkey?

Business AngelsAccelerators

Crowdfunding platforms

Which one is the best source of finance forstartups and SMEs?

a) Bootstrapping

b) Crowdfunders

c) VCs

d) Banks

e) Incubators

f) Accelerators

g) Stock exchanges

h) Business Angels

i) Public grants

j) Business Plan Competitions

k) Co-investment funds

Business Angels are main drivers of converting public money to smart money

Government understood clearly that supporting supporters ofentrepreneurs and SMEs will ease the way to convert public money tosmart money. And Business angels are the main financial sources tosecure this process.

So, Turkey released Angel Investment Law in 2013http://www.treasury.gov.tr/en-US/Pages/Business-Angel-Scheme?nm=1041

REGULATION ON BUSINESS ANGELS

PART ONE

Purpose, Scope, Legal Basis and Definitions

Purpose and scope

Article 1–(1) The purpose of this regulation is to determine procedures and principles regarding the support for Business Angel Capital, a financial instrument for start-ups and early stage enterprises experiencing difficulties in access to finance due to the high risk they have; monitoring, supervision and termination of activities of Business Angels and individuals, institutions and organizations subjected to the Law on the Structures and Duties of the Undersecretariat of Treasury no. 4059 additional Clause 5, dated December 9, 1994.

Legal Basis

Article 2–(1) This regulation is prepared on the basis of Additional Clause 5 of the

Law on Structure and Duties of the Undersecretariat of Treasury.

Definitions and abbreviations

Article 3–(1) In this Regulation, the following expressions have the below meanings:

We wanted to include global angel investorstoo

• Because accredited Business angels need networking, mentorship and know-how for succesful exits

• So, Istanbul Stock Exchange created a private market to accelerate theinvolvement of foreign angel investors

• Co-investment Law

STEP 1

Defining and connecting the main players

of the early-stage entrepreneurship and SME ecosystem in the country and setting up anexecutive board with the participation of all stakeholders to implement the programme asa whole. Discussing and giving a final shape to the country programme to be implemented.

• Chamber of Commerce

• Stock Exchange

• Development Bank

• Science & Technology Park

• Technoparks

• Business Angel Network(s) – if there is

• Treasurey Department of the Government

STEP 2

Introducing innovative financial instruments of the global early-stage

investment markets

A workshop for the leaders or representatives of the Early Stage Investment Market Players.

This introductory meeting aims to identify volunteers for participating as a founding

member of the Business Angels Network (BAN) in the country.

STEP 3

Meeting with Potential Business Angels

Each stakeholder will identify potential angel investors from their own network.

The proposed potential angel investors will be invited to the next conference. In

this meeting, participants will gain an understanding of the main principles of

angel investment, what is happening in Europe and the world, and the

advantages of becoming a member of a business angel network.

STEP 4

Creating an online platform to accept business plans of startup and

SMEs who need finance to startup or scale up their businesses.

After reviewing applications, they will be invited to make pitching to business

angel network members.

STEP 5

Making recognise BAN officially and connecting it with the global early-stage investment market

BAN will complete an application for EBAN, and EBAN will recognise BAN as theglobal voice of the early-stage investment market of the country in the firstboard meeting after recognition. Then EBAN will propose BAN to GBAN as thecountry leader. GBAN will officially recognise QBAN. GBAN, based inWashington, DC, is the umbrella structure of the world angel investmentecosystem. GBAN recognises only one entity from each country as therepresentative of the early-stage investment ecosystem of the country.

STEP 6

TBAA Capacity Building Trainings and Master-classes:

• Main Programme 1: For Potential Business Angels / 2 Days

• Main Programme 2: How to Set-Up and Run a Business Angel Network – BAN/ 2 Days

• Main Programme 3: Investment Readiness for Entrepreneurs, Start-ups and SMEs / 2 Days

TBAA Master-class for Policymakers:

Policy building to ease access to smart finance

Case Study: An applied study with Turkey as a sample country, with the participation of guest speakers from the Treasury Departmentof the Government of Turkey who developed the regulations in Turkey. This masterclass will give participants an opportunity to learnfirst-hand about the barriers and obstacles in the implementation of laws.

Participants will hear first-hand more about innovative policies for governments from Baybars Altuntas. US President Obama grantedhim a personal audience at the White House to hear his game-changer ideas for governments. He will tell you the main idea behindthe governmental policies he proposed, emphasising the importance of converting public money to smart money. He will explain whysupporting entrepreneurs and SMEs directly (or supporting the supporters of start-ups and SMES) should be a main priority and whygovernments should foster the concept of ‘investing in the right team’.

• Angel investment law, Economy Ministry of Turkey

• Crowd-funding law, Economy Ministry of Turkey

• Co-investment law, Economy Ministry of Turkey

• Technoparks law, Science & Technology Ministry of Turkey

• Supporting entrepreneurs and SMEs directly or supporting the supporters of start-ups and SMES

• Converting public money to smart money

• Investing in the right team

TBAA Master-class:

Creating the best co-investment structure for the country

Case Study: An applied study on different structures applied in different countries. Pros andcons of the early-stage investment co-investment fund structures in different scenariossuch as business angel–public fund, public fund–EIF, angel syndication, VC–angels, VC–public fund–angels.

• Technical definitions of different types of co-investment funds

• Reasons to create a business angel involved in co-investment funds

• Added values for public entities

• How public entities differentiate the co-investment initiatives

• Main business angel co-investment funds in Europe

• Structures of these co-investment funds

• Public due diligence – investment decision – term sheets

• How public money comes to the game

TBAA Master-class for Bank Executives:

Creating an angel investors club within the bank for private banking customersCase Study: An angel investment scheme is an innovative financial instrument forbanks. The only bank in the world to have created an angel investors platform forits private banking clients is BNP Paribas – TEB (Turkish Economy Bank). In thismasterclass, the head of the TEB Angel Investor Platform will give participants aroadmap to create such an innovative product in a bank. You will hear about theexpectations of the bank administration for this product and how the bank benefitsfrom the initiative.

• Setting up incubation centres as a bank

• Setting up an angel investors club

• Matching club members with incubated start-ups

• Setting up a side-car fund

• Managing the side-car fund

TBAA Master-class for Stock Exchange Executives:

Creating a private market for business angels, start-ups and SMEs under the stock exchangeThis masterclass will involve a case study from the Istanbul Stock Exchange. The director of the Istanbul Stock Exchange will shareimportant insights from the Turkish capital markets for initiating and running such a market in your country. You will find interestingstrategies for using the stock exchange as a leveraging body to increase the market size of Qatar’s early-stage investment byconverting the stock exchange into a platform where foreign investors can find a secure environment to invest in start-ups,entrepreneurs, and SMEs in your country.

• Why stock exchanges today give importance to SMEs and entrepreneurs more than ever

• How the Nasdaq Private Market works for SMEs and entrepreneurs

• How the ELITE Programme of the London Stock Exchange Group serves the needs of SMEs and entrepreneurs

• How the Istanbul Stock Exchange Private Market works for business angels and start-ups

• Whether there is a need for the SEC of a country to secure the private market

• Obstacles in developing such a market

• How this market can be used to list global angel investors and leverage the size of the early-stage investment market by attracting foreign investors

• Benefits of creating a private market or start-up market under the stock exchange for:

• o the stock exchange itself

• o the country’s overall economy

• o the early-stage investment market of the country

STEP 7

EBAN – ICC International Excellence Awards for your country

Gala Dinner

EBAN and ICC International will seek to promote and nurture start-ups, angels, and a dynamic business community in Qatar. Frombusiness angels to policymakers to academics, the awards will salute those who stand out in imagining, discussing, and shaping thefuture of an entrepreneurial Qatar. Given the diverse challenges the world is facing in the twenty-first century, it is important torecognise that entrepreneurship can have a major impact on our future, offering new ways to increase economic opportunities and tofoster social justice.

EBAN and ICC International aim to contribute to that impact by driving positive changes that will facilitate entrepreneurship. Fosteringentrepreneurship whose effects can be felt in both economic and social arenas is a hallmark of EBAN and ICC.Excellence Awardsrecognise notable activities in these fields and salute outstanding contributors to entrepreneurship and to the angel investmentecosystems in the region.

• Call for nominations

• Setting up a international jury

• Assessing applications

• Presentation of awards

THANK YOUBaybars Altuntas

Chair, TBAA - Turkish TradeAssociation for Business Angels and Early StageInvestment Market

baltuntas@deulcom.com.tr

+90 532 236 66 82

www.melekyatirimcilardernegi.org