| Topic Name: |
MUSLIMS in VC |
| Message Name: |
Great focus |
| Date Posted: |
05/01/2001 |
| In Reply To: |
I am posting this discussion to better understand what areas of VC would be "legal" for a practicing Muslim such as myself. The principle reason for me not to enter the world of investment banking has been because of my religious beliefs. Briefly, Islamic finance strictly prohibits interest-born transactions, shorting, leveraging based on margin, etc. How much are these activities involved in VC? Could anyone please provide me with possible areas in VC where I could contribute?
I would appreciate any details you can provide. Thanks in advance.
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| Message: |
Like one of the previous posters (not one of the jerks), I don't think that any of these prohibited transactions are part of VC life--unless you include bridge loans to ailing firms or have a broad definition of "interest" that might include a ratchet clause. You can find out more about the specific terms in a VC's standard term sheet by looking at a copy of Jack Levin's "Structuring Venture Capital" book. Certainly, you could steer clear of these issues if you decide to. I think that you might find some potential Islamic LPs who are interested in participating in a fund with this focus. I'm surprised that no one has focused on this before... (Have you checked?)
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