Questions

Do angel investors in the United States consider investing in seed tech companies based in the Middle East?

3answers

I'll provide a generalized answer to the question with the caveat that there is somewhat of an exception with Israeli companies but even there, it's more of an exception than a normative behaviour. Angel investors are likely to invest anywhere in the world wherever there is an amazing company with great traction. There are however, many reasons why this is highly unlikely:

Corporate Structure: While US angel investors occasionally invest in companies that are not US corporations, it adds undesirable complexity to the investment consideration given unknown tax implications and governance laws in other countries.

Competitive Realities: There are so many great companies in San Francisco and Silicon Valley alone, never mind the entire United States, that the likelihood of an American angel investor choosing to invest overseas when there is so much closer to home is low.

Unknown Talent: Angel investors are often investing primarily or largely because of the founder and/or team. There just aren't as many success stories that have made their way to American angel investors' understandings of the Middle Eastern tech industry to be able to make most angel investors trust that access to great talent is easy or even possible.

So for the above reasons, it's highly unlikely that this is likely to occur on a frequent enough basis. I just did a Clarity call this morning with an exec of a Middle Eastern fund and would be happy to introduce if I thought the fit was appropriate and if that executive was amenable. Message me more details if you'd like me to consider that. It seems to me that there is an increasing amount of capital that is geographically bounded to Middle Eastern wealth that might be more accessible to Middle Eastern entrepreneurs.


Answered 6 years ago

They do and they have. I like the concepts of tech investments brought in by US angel investors in ME seed deals.


Answered 6 years ago

Overall most investors with real experience (professional (vc) or angel) have a rule of thumb, the earlier the company is, the closer I want it to me. That said this an be mitigated if its a smaller investor AND you can show your surrounded by local experience and or you personally and your team have deep trusted experience.


Answered 6 years ago

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