Karen recently completed the country’s first successful crowdfunding project to promise better days in the country’s startup ecosystem and the crowdfunding debate. The company seeks to identify startups, raise capital and finance by creating a wide network of domestic and foreign investors, holding online events and the Up Province plan. By the end of the summer, they want to invest 60 billion tomans to finance 20 companies and pay special attention to the ecosystem of the country’s cities.
Karen’s financing and investment system came from the heart of Dimond Innovation Development Group. A virtual accelerator and specialized platform for entrepreneurs, investors and mentors to take steps to grow new ideas in the country and facilitate the process of attracting capital in all areas for startups.
This complex is the first official financing and investment broker under the support and supervision of the Vice President for Science and Technology. They have also succeeded in obtaining a co-financing license based on participation from the OTC market and become the first group to distribute the profits from the co-financing partnership among investors.
The principal and profit from the participation in financing the ceiling radiology project of Danesh Bonyan Behyar Sanat Sepahan Company was transferred to the participants’ accounts last August.
In an interview with Digito, Karen Omidi, CEO of Karen, spoke about the company’s history, from efforts to raise capital for startups, to the challenges in this area, and Sina Quds, Karen’s Deputy CEO, about Karen’s work process in The future offers more details.
Purpose of Karen’s birth
Although Diamond is a well-known name accelerator with a decade of experience, Karen was 3 years old and was born from Diamond. At the beginning of the route, 90% of Karen’s shares belonged to Dimond and 10% to Amidi, who, according to him, in the next stages of raising capital, these ratios have changed.
Amidi considers the purpose of Karen’s birth to be the discussion of crowdfunding or collective financing and told Digiato about the story of its formation:
“Saeed Amidi”, a major shareholder of Dimond, after successfully investing in a crowdfunding platform called “startengine” sought to launch such a platform in Iran, and after a meeting with “Sorena Sattari”, Vice President for Science and Technology and his support, “Karen Crad was formed in 1997, and due to its lengthy licensing process, in 1999 the first license was issued by the Exchange Organization and the relevant campaigns were launched.”
“There are four models of crowdfunding in the world,” he said.
According to CEO Karen, after the formation of this company in 1997, due to the long process of obtaining a license, they moved to deal making and attracting investors for startups and knowledge-based companies and were able to create an investor club:
“After starting the process of creating investment opportunities, we realized that we need to add other services to our platform because to find investors for startups, we need to train and advise them, verify them and enable them to participate in the international market, so accelerate. We took it. “One of our services in the discussion of verification is that many subsets, after working with accelerators, are not qualified enough and the investor notices problems in them.”
He believes that many accelerators in Iran do not work as accelerators, but have a destructive presence in a startup team in an effort to increase their profits.
According to Amidi, to date, more than 4,500 entrepreneurs have used Karen’s services, and 32% of these startups have reached the evaluation stage. Also, this group has 1371 member investors and 133 successful investors.
Focus on fundraising
He further referred to the efforts made in the field of crowdfunding and told Digito that in this regard, we agreed with the Ministry of Silence to cooperate with small and medium enterprises (SMEs) that are within the industrial town companies and revive them.
Amidi believes that in the field of crowdfunding, we should go to startups that are in the later stage of growth, because in startups in the early stage of growth (early stage) liquidity has no special meaning. Also, due to the culture of non-risky investment in Iran, it is not possible to go to small teams:
“It is enough for you to look at the Iran Stock Exchange in 1999, which earned 5% profit every day for shareholders. Under such circumstances, it is not possible to persuade an investor to invest in a startup that is waiting to become profitable after 5 years, and perhaps the original money will be lost. While in the world, bank profits and investment culture are different. “So collective investment should go to SMEs, firms that are neither large enough to go public nor small enough to attract venture capitalist (VC) investors.”
He categorizes traditional private investors in Iran into three categories and tells Digito that a range of them own large companies that, instead of investing in existing startups, are looking for entrepreneurs to work for and cover the obvious loss of their company. Because investing is a long-term, time-consuming, and risky project, it must cover the activities of a strategic startup and a missing link in the organization to persuade the individual to invest.
According to Amidi, the second group are people who do not tolerate risk and are not the target of the startup space at all. The third group has entered this field for some time and has also had investments.
He believes that according to these three categories, we should create a solution for each of them and implement a suitable model for their investment: “For example, by guaranteeing the principle of capital as a tax exemption, people can be encouraged to invest in startups. “That means the tax authority will agree to invest in a startup company to pay taxes, which will make our ecosystem more mature and better step by step.”
CEO Karen referring to the circular issued for Tax exemption on profits from investments in crowdfunding“They consider it their right because every security is tax-exempt and when it gets a license from the company from the stock exchange for fundraising, it should also benefit from its benefits.”
Karen aims to finance 20 companies
In response to Digito’s question why we do not have foreign investors in Iran, Amidi said that one of the reasons is sanctions and that it is not possible to attract them at the moment. Also, sending teams abroad was not one of their priorities because it is out of their plans due to various adventures.
However, according to him, so far they have cooperated with about one hundred international companies and maintained their contacts in order to better understand them, to introduce the potential of Iranian startups to foreign investors and to be able to use their participation in case the sanctions are lifted.
Omidi goes on to point out Karen’s relationship with the Innovation Fund and says that Karen is the fund’s broker in the areas of empowerment, event management, evaluation, valuation, etc. ” “We will finance and pursue its continuation.”
He tells Digito about plans for Karen: They are looking to launch a campaign to fund 20 companies. They also want to increase the profit margin of investors and their goal is to invest 60 billion tomans by the end of the summer.
In the end, CEO Karen pointed out the challenge of the presence of startups in the stock market and believes that according to the different literature that prevails in this market, differences should be resolved and we should try to understand their literature and offer solutions accordingly. Also, the stock exchange organization should cooperate and be short on some issues.
Karen mechanism for identifying potential companies
“Cena Quds,” Karen’s deputy CEO, who has worked in the Dimond Accelerator startup sector, pointed to the mechanism for identifying small and medium-sized enterprises for crowdfunding, and told Digito:
“Thanks to all the activities we have done during this period, we know about 4,000 entrepreneurs from all over the country. We also have a representative in each province and we are in touch with the science and technology park, research center and universities of these provinces. “In these centers, you can find projects that are suitable for investment or mass financing.”
Referring to the financing of Daneshbanian Behyar Sanat Sepahan Company, he says: “This is important from the connection with Isfahan Research Center, and through the Innovation Fund, we found out that it is a company that has a good credit situation and has repaid the loans and funds attracted on time.” That’s why we chose it for mass financing.
Quds believes that considering that less than 4 projects in the field of crowdfunding have been implemented so far, people are not familiar enough with this issue and culture building should be done in this field first.
According to him, in May, with the cooperation of the scientific deputy, a call was issued for the registration of knowledge-based companies in order to identify them in order to provide their capital.
In response to Digito’s question about the amount of financing and depending on the cases, Deputy CEO Karen said that the collective financing ceiling is 10 billion Tomans and its amount depends on the project and the history of the companies: The second project to attract capital, which is about 6 billion tomans and will be implemented soon, has a revenue of about 70 billion tomans from each contract. “Therefore, we pay attention to their credit and debt for mass financing and determine the amount based on the ongoing project.”
Implementation of the provincial plan to help non-Tehran teams
Quds says that the amount of investment in the technology ecosystem is small compared to other markets. The stock market in 1999 is one of the factors in this issue.
However, according to him, the main issue is the lack of familiarity of startup teams with the culture of attracting investors. This issue is more prominent in the cities due to the distance from investors, who mostly live in Tehran. That’s why Karen spends more time advising teams in other provinces and seeks to strengthen these teams by holding online events:
“Although in a face-to-face event in Bushehr with 5 investors, out of 6 teams present, three teams succeeded in attracting capital, but about 50 investors participated in online events and startup teams in other provinces can contact investors and their literature. Become familiar. “If one day we see the doors of Iran open (the lifting of sanctions), small companies will have the opportunity to raise capital.”
Emphasizing that the move to identify non-Tehran startups is not due to the saturation of Tehran’s ecosystem, Quds told Digito that anyone entering the field of startup investment should only look for a good idea and team. Experience has also shown that there are many good teams with good ideas in the provinces of the country.
Referring to the provincial plan, he says that the mechanism of this program is similar to the “Startup Mondays” program of the Innovation Fund, and it is carried out in cooperation with the link and with the presence of various investors, which will be held nationwide and online and will be present in one province monthly.
According to Quds, Karen is not only looking to raise capital for startups, but is working to meet all the needs of a startup for growth, and will seek help from their strategic partners.
He concludes by discussing the corona and changing the business model of startups, and tells Digito that the outbreak of the corona virus has led companies to adopt a different revenue model to escape this economic downturn:
“With the Corona outbreak, companies’ revenue declined, so they had to change their revenue model. “By changing the model, the investment risk has also increased, so investors have been more demanding of participation during this period, which is the nature of every business.”