Tenmou, Bahrain’s first formal angel group, held its fifth MENA Angel Investor Summit 2016, a gathering of venture capitalists, angel investors, and entrepreneurs, in Manama, Bahrain, in November. For its chief executive, Hasan Haider much has changed since 2010 when he started building the group from scratch.
Haider made a decision to permanently alter the way local businessmen viewed investing in tech start-up ideas as he watched his first company crumble.
It was when Film2go, a Manama-based start-up he set up in 2007 to provide online DVD rentals with free delivery and pickup, was struggling. Although it was generating BHD 5,280 ($14,000) a month, the young entrepreneur needed both capital and guidance to take the company to the next level.
“I took out a loan and that was the stupidest thing I could have done,” Haider says to a group of journalists on the sidelines of the MENA Angel Investor Summit 2016. “When you run a rapidly growing start-up, you don’t really have much in terms of free cash flow. If you don’t have free cash flow, you don’t have money to pay off a bank loan. So, yes, I should not have done that. I’m still paying for it.”
His pursuit for funding led him to Sami Jalal, a prominent Bahraini businessman who is now the chairman of Tenmou. Instead of money, Jalal offered mentorship.
“He advised me quite a lot,” explains Haider. “That is how I realised how important it was. Even though he wasn’t in the same industry, he had experience in business and that helped quite a lot. I managed to reduce my expenses quite significantly and I was operationally more efficient. It just made me think in the right sort of mind-set. If I had that from the beginning, I would be much richer now and not be paying off loans.”
Jalal and Haider teamed up to blaze a trail for wealthy individuals to invest in young entrepreneurs in Bahrain. Five years later, their group of 16 investors has supported 23 local start-ups.
“It was not easy,” he says. “We spoke to about 40 families, and we got 16 on board out of those 40. We didn’t ask for much, but for about BHD 49,034 ($130,000) per investor. If you want to be an angel investor, put your money where your mouth is and commit it to the fund.
“Unfortunately, what often happens in our region is that people will commit, but not actually write the cheque and disappear when it is time to get the money. So, we understood the mentality of investors here. We decided not to have a loose network, but create a pool of pre-committed capital. So, when we need to invest, we can just write a cheque out…