Ahmad Takatkah, the former Head of Investments for N2V, has announced the launch of new venture capital fund Sinbad Ventures, which will invest in early stage mobile and web startups, helping them to connect with investors and mentors in Silicon Valley.
For those startups explicitly targeting a global market, Sinbad will forgo typical discussion rounds and assessment of valuation, offering US $500,000 for a 25% stake across the board. No formal business plans are involved. "It's up to the founders to decide how long this amount will last," says the website.
Pitching rounds will take a similarly fast-paced approach: interested startups can submit 5 minute videos about their existing startup (not idea). If accepted, they will be invited for a full day pitching round, and awarded a term sheet at the end of the day if they fit Sinbad's criteria.
The environment will be "semi-accelerator;" startups will have monthly follow-up meetings, with milestones and KPIs set. Sinbad will also, true to its name, take startups from the Arab World on a tour of Silicon Valley to receive mentorship, connect with peers, and pitch at a demo day.
The goal is to focus exclusively on startups addressing a global market, says Takatkah. "A lot of startups are working in Arabic and addressing a local market. Plenty of investors are invested in them because they are considered low hanging fruit. But those trying to compete on a global level are not welcomed by the region's investors becuase they come with higher risk. We are focused on those trying to create a global strategy."
When asked if Sinbad will help take regionally-focused startups global, Takatkah says, "Yes, if they have a clear strategy. If their main focus is to serve the Arabic user, then no." Takatkah also points out that Sinbad will focus on not just consumer web but enterprise web companies, essentially specifying that both B2C and B2B companies are welcome.
Takatkah is insistent that Sinbad will be filling a open gap in the VC space. "A lot of VCs are focusing on localization. If startups know that there is a VC focusing on going global, they will aim for that." He cites companies like Vimov, which garnered international attention for its Weather HD iPad app two years ago, as the kind of global-facing company that Sinbad is looking for. "Half a million will not be enough to take a company global," he says, "But we aim to put companies on the map and help them get funding from international VCs."
While it's beneficial to startups to have more funding vehicles in the early stage space, this approach- focusing on global startups- is hardly unique. Just to name a few recent deals with global startups, IV Holdings has invested in translation platform Dakwak, international publishing platform Content Syndicate, and global financial information company IdealRatings, Accelerator Communications Holdings has invested in data center solution company SmartCube, and Middle East Venture Partners has invested in optical communication and infrastructure testing company Multilane and global cash management and auditing platform B.A.S. The Wamda Capital Fund as well has invested in Qordoba, Woopra, Social Wire, Marginize/ Nextly, all of which address global markets.
A cookie cutter approach to early stage funding also has yet to be proven successful. For Y Combinator-style accelerators like Oasis500, SeedStartup, Flat6Labs, and Tahrir2, investing at the seed stage in a standardized manner (taking, say 10% equity for $10,000 or $15,000) works well, as the goal is often more to develop the team and get off the ground than scale a company with specific existing assets into specific markets.
Sinbad Ventures is not open for investment yet, as they are still fundraising towards a $10 million target. Yet with a limited partner already on board, they are soliciting applications currently, hoping to begin investing in early 2013 at the latest. They plan to invest in 7 startups a year, also offering mentoring services, boosted by Takatkah's membership in entrepreneurship support organization Kauffman Foundation.
When asked whether the image of Sinbad presents a potentially clichéd or anachronistic vision of the Arab World to Silicon Valley investors, Takatkah resists that interpretation. "We're trying to get back to the roots of the story, and we wanted a name that would stick in the minds of investors and create buzz. Part of our goal is to change the stereotype about Arabia."
It's also not all about Silicon Valley; the fund will also connect startups to investors and opportunities in Europe, Turkey, and other global markets.