| Topic Name: |
MUSLIMS in VC |
| Message Name: |
Anonymous |
| Date Posted: |
05/05/2001 |
| 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: |
OK, I'm a semi-practicing Muslim and have worked in a VC until recently. Here are some thoughts.
1) If avoiding interest-born transactions is all you want, it's possible. You can stay clear of bridge loans and certain aspects of term sheets, and you're fine.
2) That said, why should they hire you? VC firms are small places, where everyone does everything and plenty of it. Also, fitting in the banking-like culture is an important hiring criterion. Finally, if you are hired, will you feel comfortable working with spoiled ex-banker frat boys (eery VC has at least one) if you're so religious? Think about it.
3) Here's the most important part: I think you should stop trying to split hairs. Interest (i.e. opportunity cost of capital) is the most fundamental part of finance, period. Being a VC and avoiding interest-born transactions is like sitting in a tight room full of people smoking bongs (or nargilehs/shishas) and claiming you're not getting high from second-hand smoke. Or an "Islamic" financial institution that gives out "profit shares" that somehow, magically, always matches the savings rates at regular banks. Yeah right.
My advice to you: Do some thinking about how strictly and literally you want to interpret the teachings of Koran and Mohammed (SAV). Then, if you still think same as you do now, ask yourself what in the world you are doing here, looking at VC jobs, etc.. It's ok to be very religious or not religious at all, and everything else in between, that's your business only. But don't try to play both hands and think it's ok, you would only be cheating yourself.
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