'Angel investors, experienced professionals may help drive emergence of new start-ups led by youth,' Chairman MyBiz Pakistan

MyBiz Pakistan is a recently launched venture that seeks to provide access to funding and professional advice for young prospective entrepreneurs. The organisation has brought together a diverse mix of experienced professionals and well-established business owners who are motivated to boost a culture of entrepreneurship in the country. Business Recorder Research met with Amir Qureshi, the Chairman of MyBiz Pakistan during his recent visit to IBA-Karachi.
The following text is comprised selected excerpts from that interview.
BR Research: Briefly tell us about the MyBiz Pakistan. What is the nature of this organisation and what is its scope?
Amir Qureshi: The MyBiz initiative has been created to provide the young generation of Pakistanis with the tools, techniques and the funding to start their own businesses.
Pakistan continues to languish amongst the poor countries of the world, despite all of its resources. A large number of young Pakistanis, despite obtaining good academic qualifications fail to find suitable employment. Even if they manage to find a job, the working conditions and the poor pay scales mean that they struggle to get ahead. Pakistan's corporate landscape simply cannot absorb the number of young graduates that keep coming through the system. Our initiative is about providing these young people with an opportunity to start a small business and hopefully make it into a big business one day. It's about providing hope and optimism for the young Pakistanis. Success in your own business often depends on the business owners and their skills, commitment, dedication and hard work.
MyBiz Pakistan provides training, tools, networks and access to Angel funding for starting small businesses. We are not a charity, a microfinance institution, an NGO, a government authority or anything of the sort. We are Pakistanis trying to make a difference.
BRR: Let's assume a group of students has uncovered a strong business proposition and prepared a business plan for it. How can they access funding through MyBiz Pakistan?
AQ: The first point of contact would be one of our offices. We are establishing our presence across the major universities of Pakistan, including the Lahore University of Management Sciences, Lahore and the Institute of Business Administration, Karachi. But we are not only catering to students from these institutions. Students of other universities and colleges can also approach our office in their city and from there we can liaise with them to take a look at their proposal and study its viability.
Our aim is to encourage innovative ideas that require a relatively small amount of capital to get started. Additional funding may be available once the business has been established and has some history behind it. The entrepreneurs must be willing to devote themselves to the business and commit 100 percent of their own time to the new enterprise.
BRR: Who are the investors and what are the terms of investment?
AQ: The investors are mostly professionals and well-established business owners who are willing to support start-ups with money and also through mentoring, training and advisory assistance to prospective young entrepreneurs. The terms of investment are negotiated between the investors and the entrepreneurs on an individual basis. MyBiz Pakistan will be a third party facilitator that aims at ensuring that both parties reach a fair and amicable agreement.
Typically the investment will comprise both debt and equity. Alternatively, entrepreneurs may start off by assuming debt while offering the investor the option of converting this liability into an equity stake in the venture at a later date. Each party will still have to conduct their own due diligence and seek legal and professional advice. Our organisation will charge a fee for its services, which will be a percentage of the funds raised for that venture. But these charges are aimed at covering our administrative expenses. We are not looking to rake in lots of profit from our role; rather we want to set up a self-sustaining organisation so that it can continue along this path for a long time.
BRR: Starting a new business can be a daunting challenge, especially for young entrepreneurs. What would happen if a business funded through your organisation fails?
AQ: Most start ups around the world struggle to survive in the initial stages. On average more than 80 percent of new businesses do not survive. Investing in a start up carries a high degree of risk for the investors. In the event of a start up failing, the exact consequences would depend on the terms of the finance arranged. Both parties must ensure that they fully understand the consequences and nature of the investment.
However, that is where the experts whom we have gathered under our banner can play a very important role. By providing training, professional advice and business counselling to these young entrepreneurs, we want to help them weed out the ideas with the highest potential for success and then continue to work with them to help them make the best choices to ensure a steady and sustainable path to progress.
In essence these people will become strategic partners with enterprising youths so that the strengths of their experience and financial strength can be coupled with the enthusiasm and zeal of young entrepreneurs.
BRR: What is the quantum of funding that the organisation has been able to raise to invest in such businesses?
AQ: We have received pledges for funds from various prospective investors. For now, we are interested in working with 15 to 20 different prospective entrepreneurs and our initial pledges are sufficient to fund this number of businesses. We are going to different universities to create awareness among students and based on the proposals that we receive, we can access additional funding. We want to start with a small number of businesses and concentrate our efforts on ensuring their success before leveraging that success to reach out to more investors and prospective businesses.
BRR: What steps do the students follow to find suitable investors through the organisation?
AQ: Initially students submit a brief proposal, typically two to three pages that sum up the salient features of the proposed venture; the market it aims to cater to; the intended proposition and strategy they will follow to develop and inculcate clientele. We share these proposals with our panel of experts who vet the ideas and then contact the most viable among these businesses for further development.
We also provide any additional expertise that may be needed, for instance if it is an IT business, we will link them with the relevant professionals who can guide them regarding the development of the right platform. Following this, the business ideas that are developed further will be pitched to prospective investors through presentations and that will then lead to negotiations among the relevant parties.