OUSUL VENTURES

US-­‐CAT-­‐MENA  Life  Science/Health-­‐Tech  Fund  

 CHALLENGES
IN THE
MENA ECONOMIES
 
 
 
 
Challenges in MENA Economies: Innovation?
Ibn  Sina  (Avicenna)     Abu  Bakr  Al-­‐Razi   Jabir  Ibn  Haiyan     Omar  Khayyam    

(980-­‐1037)   (865-­‐925)   (722-­‐804)   (1048  –  1131)  

Al-­‐Khwarizmi   Al-­‐Battani     Ibn  Al-­‐Haytham   Ibn  Zuhr  

(780  –  850)   (858-­‐929)   (965-­‐1040)   (1091-­‐1161)  

Challenges in Oil-Producing MENA

 
 
2030 Visions (underway…)
 
 
 
But … If You Build It Will “It” Come??
 
 
 HIDDEN GEM OF MED:
CATALONIA
 
15 YRS+ LIFE SCIENCE
  ECOSYSTEM
 
15 yrs+ CAT Life Science Ecosystem
512  Life  Science  Companies  (6%+  of  
Business   BCN  GDP)-­‐  Biotech,  Med  Tech    and  
Pharmaceutical  Companies    

Pro-­‐business  regulatory   Regulatory   120  Life  Science  Institutions  -­‐  Science  

and  legal  environment   Infrastructure  
Framework   &  Tech  Parks,  University  Hospitals,  
Research  &  Technology  Centers,…  

Gateway  to  Europe   5900  Researchers  in  Hospitals  

from  MENA  and  Asia  
Location   People   and  Research  Institutes  

Expertise   World  renowned  clinical  research;  3%  of  Scienti]ic  

Publications  in  Europe  -­‐  superior  to  Germany  and  France  
(per  capita)  ;  3.3%  of  European  Science  Grants  
BioRegion of Catalonia
Montserrat  Vendrell,  CEO:  
 
• Since   April   2007,   CEO   of   Biocat,   the   organization   that   coordinates   and   promotes   the  
BioRegion  of  Catalonia,  the  biotechnology,  biomedicine  and  innovative  medical  technology  cluster  in  
Catalonia.    

• From  April  2014,  general  manager  of  the  Barcelona  Science  Park  (PCB).  Ms.  Vendrell  has  been  linked  
to  the  PCB,  the  ]irst  in  Spain,  since  it  was  created,  acting  as  scientiYic  director  (1997-­‐2005)  and  later  
deputy  general  manager  (2005-­‐2007).  She  will  take  over  management  of  the  PCB  while  remaining  in  
her  current  post  as  Biocat’s  director.  

• Since   March   2012,   Vendrell   is   the   chair   of   the   Council   of   European   Bioregions(CEBR),   the   ]irst  
network   of   European   bioregions   created   in   2006   with   nearly   one   hundred   members   including  
Biocat.  

• Dr.   Vendrell   holds   a   PhD   in   Biology   (Universitat   de   Barcelona)   and   a   long   experience   in   biomedical  
research   in   different   international   institutions.   She   holds   a   Science   Communication   Master   degree  
(UPF,  1997)  and  an  Executive  Management  Degree  (IESE,  PDG-­‐2007).  
Goal: Bay Area Life Science Ecosystem
CURRENT  FIGURES:  

!  1,377  Bio-­‐Tech/Life  Science  companies  

!  Largest  concentration  of  Bio-­‐Tech/Life  Science  companies  in  

the  U.S.,  with  total  worldwide  revenues  of  $4.1B,  exports  of  
$2.7B  and  NIH  grant  awards  of  $1.2B  

!  250,000  employees  in  the  Bio-­‐Tech/Life  Science  industry.  

!  The  largest  aggregation  of  research  universities  and  federal  

research  institutions  in  U.S.  

!  Universities  producing  more  Ph.D.  Scientists  and  Engineers  

that  any  other  area  in  U.S.  

!  California  is  the  leading  state  in  Venture  Capital  funding  in  
Health-­‐Tech  =  ~50%  of  total  Health-­‐Tech  investments  in  U.S.  
Origins of Bay Area Life Science Ecosystem
INDUSTRY  ORIGINS  :  The  Genentech  Story  

2014  
Genentech  employs  more  than  13,000  people.    
1982   Purchased  by  Roche  in  2009  for  ~46B.    
Genentech  markets  the  ]irst  Human  Insulin.  
1980  
Genentech  undertook  an  IPO  and  raised  $35M  
1976  
Venture  Capitalist  invests  in  two  scientists  from  Stanford  and  the  University  of  California  who  
discovered  a  breakthrough  for  using  genetic  engineering  to  diagnose  and  combat  disease.      
Pioneers of Bay Area Life Science Ecosystem
Guy  Nohra,  Co-­‐Founder,  Partner:  
 
 
 
 
•  Co-­‐founder   of   Alta   Partners,   since   1996,   funding   over   145   companies   in   the   healthcare/life  
sciences  sector.      
•  Among   ]irms   with   the   highest   number   of   M&A   or   IPO   exits   in   the   industry,   including   over   30  
exits  over  the  past  ]ive  years.    
•  Has  been  involved  in  the  funding  and  development  of  notable  medical  technology  and  life  science  
companies  including  AcelRx,  ATS  Medical,  Cutera,  Innerdyne,  R2  Technology,  deCODE  genetics,  
and  Vesica.    
•  Currently,   serves   on   the   board   of   directors   of   several   companies   including   Bioventus,   Carbylan  
Biosurgery,   Cerenis   Therapeutics,   PneumRx,   USGI   Medical,   VertiHlex,   and   ZS   Pharma,   and   is   the  
Chairman  of  the  Board  of  USGI  Medical  and  ZS  Pharma.    
•  Also  served  on  the  board  of  directors  of  the  Medical  Device  Manufacturing  Association  (MDMA)  
from  2003  to  2013  and  is  now  a  Board  Member  Emeritus.      
 
Origins of Bay Area Life Science Ecosystem
INDUSTRY  DEVELOPMENT  

Government/  
Venture  Capital   Markets  
Institutions  

Universities/   Innovation   IPO  

Hospitals   Inc.  
LIFE SCIENCES VENTURE CAPITAL
OPPORTUNITIES
 
FOR
 
ISLAMIC   FINANCE
Islamic Finance in the West
Abdi  Shayesteh,  Esq.,  Co-­‐Founder,  Ousul  Ventures:  
 
 
 
 
•  Is   a   recognized   legal   expert   in   representing   global   Yinancial   Yirms   in   regard   to   their   regulatory  
matters,   and   conventional   and   Shariah-­‐compliant   cross-­‐border   investments   and   Yinancial  
transactions.    
•  Served   as   Deputy   General   Counsel   for   Mitsubishi   UFJ   Financial   Group,   Inc.,   Japan's   largest  
Yinancial  group.    Special  legal  advisor  to  MUFG’s  US  and  Tokyo  senior  management  teams,  and  he  
has   been   credited   for   successfully   championing   several   cross-­‐border   projects   and   government-­‐
related  initiatives.      
•  Was   a   senior   attorney   and   a   member   of   the   Middle   East   Investments   and   Islamic   Finance  
Practice  Groups  at  King  &  Spalding  in  New  York,  where  he  represented  leading  GCC  banks  and  
investment   ]irms   with   regard   to   their   US-­‐bound   Shariah-­‐compliant   investment   funds.     Was  
the  key  Yirm  spokesmen  for  the  Practice  Group.      
•  Served  at  the  Federal  Reserve  Bank  of  New  York,  where  he  was  one  of  the  youngest  members  of  
the  Federal  Reserve’s  Islamic  Banking  Working  Group-­‐  a  high  proYile  team  of  regulators  focused  
on  Shari’ah-­‐compliant  banking  products  in  the  US.    With  his  leadership,  he  helped  launch  the  Yirst  
Islamic  Banking  Interagency  Group  comprised  of  US  and  foreign  regulators.      
•  His   early   career   was   in   Silicon   Valley,   where   he   became   General   Counsel   at   one   of   the   Yirst,  
nationwide  internet-­‐based  mortgage  companies.    
Islamic Finance in the West
Lessons  learned  from  United  States  …  
"  Islamophobia:  Focus  on  Offense  vs.  Defense    
#  Invest  in  Goodwill  Activities  in  the  West  (e.g.,  Job  
Creation,  Econ  Dev.)  

"  Diversify  Asset  Class  away  from  RE  

"  Investment  in  West  to  Contribute  Back  to  Human  

Development  in  MENA/Gulf  

"  Dont  waste  resources  trying  to  restructure  conventional  

products  to  look  like  Shariah-­‐compliant  products.    Rather,  
focus  on  what  is  naturally  shariah-­‐compliant.  
Overview and History of Islamic Venture Capital
•  Historically,   Venture   Capital   (“VC”)   started   from   the   Islamic   concept   of  
“mudharabah”,   a   form   of   partnership   used   even   before   Islam   by   Arab  
traders.    
•  Later   on,   this   concept   was   formalised   and   embodied   in   Islamic   law   by   the  
Muslim   jurists,   which   is   now   better   known   as   ]iqh   muamalat   (Islamic  
transaction).    
•  As   Islamic   culture   spread   across   the   world,   the   mudharabah   concept   also  
developed   and   continued   to   be   used   by   Islamic   businessman   until   the  
19th  century.    
•  In  the  10th  century,  the  concept  of  mudharabah  was  taken  up  by  the  Italian  
and  spread  through  Europe.    
Overview and History of Islamic Venture Capital
Foundations  of  Shariah-­‐compliant  Investing:  
 
"  Money  must  be  invested  in  projects  and  ventures  for  the  generation  of  activities  for  the  
beneYits  of  mankind  and  in  the  process,  for  proYits.    

"  This  is  precisely  why  Islamic  Yinance  praises  and  encourages  the  application  of  Yinance  
in  the  Yinancing  of  real  economic  activities.    

"  The   returns   should   be   earned   by   active   involvement   and   participation   in   the   business  
risks  in  the  investment  (and  not  returns  on  lending)    

"  Truer   form   of   Islamic   Yinancing   or   investment   structure   should   have   that   element   of  
sharing  of  proYit  and  loss  (COMPARE  TO  MURABAHA).    

"  Shariah   Screens   still   there   (no   riba,   haram   products,   conventional   insurance,   gambling  
etc.)  
Common Shariah-based structures for VC
(A)  MUDHARABAH:  
•  A  contract  made  between  two  parties  to  Yinance  a  business  venture.  The  
parties  are  a  rabb  al-­‐mal  (investor)  who  solely  provides  the  capital  and  
mudharib  (entrepreneur)  who  solely  manages  the  project.    
•  If  the  venture  is  proYitable,  the  pro]it  will  be  distributed  based  on  a  pre-­‐
agreed  ratio.    
•  In  the  event  of  a  business  loss,  it  should  be  borne  solely  by  the  capital  
provider,  to  the  extent  of  the  capital  contribution.    
•  The  key  to  a  Mudharabah  structure  is  the  fact  that  the  manager  cannot  be  
placed  at  risk  to  bear  losses,  unless  proven  negligent.    
 
Common Shariah-based structures for VC
(B)  MUSHARAKAH:  
•  Musharakah   is   a   partnership   between   two   parties   or   more   to   Yinance   a  
business   venture   whereby   all   parties   contribute   capital   either   in   the  
form  of  cash  or  in  kind.    
•  Pro]its   are   shared   at   an   pre-­‐agreed   ratio   while   in   the   event   of   a   loss,   the  
loss  shall  be  shared  on  the  basis  of  capital  contribution.    
(C)  WAKALAH:  
•  A  contract  where  a  party  (“the  Principal”)  authorizes  the  other  party  or  
parties  (“the  Agent”)  to  act  on  his  behalf,  based  on  the  agreed  terms  and  
conditions.    
•  Pursuant  to  the  Wakalah  contract,  it  confers  the  power  and  rights  to  the  
Agent  to  act  on  behalf  of  the  Principal  as  long  as  the  Principal  is  alive.    
 Mudharabah/Musharaka = VC Fund Structure

Manager/Mudharib   Investor/Rabb  al-­‐Mal  

(€1M)   (€99M)  

Wakalah  

Musharaka   Inv.  Committee  

Venture  Capital  Fund  Co.  
(€100MCommitted  Capital)  
Shariah  Advisor  

Mudarabah  

€1m   €2m   €5m  

Co.  A   Etc.    
Co.  B   Co.  C  
Islamic Finance Opportunities In Life Sciences
 
"  MENA  Econ.  Challenges  

"  Collaboration  w/  CAT  LS  Eco  

€€€    
  "  VC  =  Pathway  to  Diversi]ied  
US   Economy  in  LS  
 
CAT   "  Goodwill  Investments  in  the  
West  
Knowledge  

 
MENA   "  Diversify  away  from  RE  

"  MENA  Human  Development  

"  VC=Naturally  Shairah-­‐Compliant  

Experience  
Collaboration Opportunities CAT-MENA
PREFERENCIAL  RIGHTS  TO…  

Entrepreneurial  Training  
Shared  R&D   Technology  Tranfer   Commercialization  
&  Mentorship  

Manufacturing   Distribution   Professional  Training   Capital  Markets  

 END
Abdi  Shayesteh:  ashayesteh@ousulventures.com