An entrepreneur-turned-Egyptian Exchange (EGX) chairman, Mohamed Farid knows the ins and outs of the entrepreneurial life. During RiseUp Summit 2018, Farid revealed that he had to bid his entrepreneurial life adieu in order to lead the EGX as of August 2017.
The EGX chairman revealed that – as an entrepreneur – he had founded three to four companies, most of which failed. However, the most important lesson he learned was that the secret ingredient for a startup’s success is the team.
Having moved away from entrepreneurship, Farid was back at RiseUp to share the role of the EGX in supporting small- and medium-sized enterprises (SMEs) and startups – Business Forward took the chance to speak with him on the sidelines to dig deeper into what this role entails.
Which role does the EGX play to support startups and SMEs?
We have several angles when it comes to supporting SMEs and startups; the first angle is knowing that definitely some of these companies will eventually evolve and be interested to list at the EGX. The second angle is that the role of capital markets and the EGX is not confined to just having these startups and SMEs enlist. There is also a developmental role that we need to cater for, which is basically supporting companies irrespective of whether they want to enlist or not. The third thing is that we have sufficient expertise when it comes to companies, how they can raise capital, how they can adjust their financials to be more eligible for the banking sector, the financial leasing sector etc. We would like to convey this expertise as an advisory service to enable more companies to follow these paths.
So, is the role a merely advisory one?
As we speak, we have the platform that allows SMEs to come and get enlisted in the market. This is going to have a complete revamp that we’re working on with the European Bank for Reconstruction and Development (EBRD).
This is another aspect: to make the platform friendlier and easier for investors to deal with. Who knows, maybe venture capital funds or venture capital fund companies would come and get enlisted and actually start funding the companies. So we’re basically trying to fund the funders.
In your opinion, where do entrepreneurs go wrong when in search of funding?
Plenty of things. First of all, they need to understand the risk appetite of the venture capitalists or the financial leasing. When it comes to the banking sector or the credit sector, usually they look for collaterals to be realistic. That aside, when you go to venture capital firms and angel investors, the ultimate point is how to sell from a team perspective, not from a financial perspective. This is the crucial aspect. It’s about creating or having the proper team that would take your ideas and actually turn them into an actual product or service that has market demand.