Access to Finance in the Creative Industry: A local investor’s experience

1. Access to Finance in the Creative Industry:A local investor’s experience

2. MEVP Overview • Venture fund with a passion for building world-class companies that thrill customers with innovative products and services • Our goal is two prone: • To create above average returns to our investors • To support entrepreneurs in growing innovative, sustainable companies that will diversify the economy, creating sustainable jobs, helping society become more prosperous and so promoting stability, economic development and therefore creating further economic opportunity • Partnership model with exceptional entrepreneurs, providing material value to them • Deal type focus: early stage, proven business model, rapid growth, profitable or with clear path to profitability, clear value creation strategy • Favored sectors: consumer technology, consumer retail, media, logistics, light manufacturing • We focus on exit in 3 to 5 years • We invest to yield superior returns by helping entrepreneurs create value and scale

3. Why we invest in the creative industry • Scalability of Opportunities • Uniqueness of Intellectual Property and Innovation • Strong Brand potential • Large addressable regional/global markets • Clear asset value • Multiples expansion through life of investment • Add value beyond cash investment • Clear path Exit • Creative industry offers superior opportunities to create superior returns when product focus

4. Creative Industry in Lebanon Lower Returns Higher Returns Services Products Advertising, production, design, etc. Brands, Games, SKUs (Fashion, Jewellery, etc.), Programmes, Films, Proprietary Content # Opportunities Risk • Most opportunities are on the services side of the industry, harder to scale and harder to exit

5. Creative Path Roadblocks • Service model has lower inherent risk • What you need is yourself and your talent • Faster access to cash flow, no R&D spend, no investing before reaping rewards • Cultural resistance to opening up capital structure • People don’t feel comfortable opening up to 3rd party investors, happy with friends and family • Traditional investors approach focusing on control and not adding value • Lack of access to capital willing to accept risk profile • Lack of opportunities lowers effectiveness of portfolio diversification strategy • Limited size of addressable local market allowing to regional growth • Limited experience in valuing creative businesses • Entrepreneurs sell potential • Investors buy risk adjusted potential • “How long is a piece of string?”

6. How to Bridge the Gap…. • Support entrepreneurial programs in Universities • Focus on developing IP and knowledge economy • Business toolkits and skills in addition to creative talent • Encourage angel Investors and early stage investors • Tax and fiscal incentives (e.g. EIS, etc.) • Capital matching etc. • Fix regulatory framework • Support and develop industry specific incubators, creative centers, networking forums • Sharing and collaborating creates opportunities • Networking creates stronger teams • Fix Regulatory Framework • Develop Free-Zones (with proper infrastructure) • Eliminate taboos around failing

7. Most importantly is value of the offering…

8. … and who we invest in