The Securities and Exchange Organization has unveiled its platform for hosting venture capital funds to help expand tech companies.
The platform was designed in cooperation with over-the-counter market Iran Fara Bourse, which will list both VCs and small tech companies to help them fund their ventures, ISNA reported.
These investment funds manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.
"Loans are not a good method for funding newly formed knowledge-based companies and a considerable part of their capital should come from venture capital funds [as equity]," said Sorena Sattari, the president's top technology deputy.
The new platform for VCs varies from how venture capital and private equity firms are organized. The SEO has to approve the funds and their managers.
Venture capitals require 100 billion rials ($2.8 million at market exchange rate) in equity to set up, 10% of which have to be put up initially. However, these will not be open-ended funds. VCs must be disbanded in less than seven years.
The details of operation for these VCs are still unclear. However, all the officials present at a Saturday opening ceremony, including the head of SEO Mohammad Fetanat-Fard, Sattari and his deputy Alireza Daliri, hoped that the project would take off in a grand fashion.
The publicity session was held in SEO, where it was announced that five VCs had received the go ahead from SEO and six were being reviewed.
Also, the Presidential Office of Science and Technology signed a memorandum of understanding—a non-binding agreement to pursue cooperation, whenever possible—with SEO to cooperate in expanding Iran's knowledge economy.
Knowledge economy is a system of consumption and production based on intellectual capital. Production and services based on knowledge-intensive activities that contribute to an accelerated pace of technical and scientific advance are at the core of such an economy.
In a knowledge economy, a significant part of a company's value may consist of intangible assets, such as the value of its workers' knowledge (intellectual capital). However, generally accepted accounting principles do not allow companies to include these assets on balance sheets.
The key component of a knowledge economy is a greater reliance on intellectual capabilities than on physical inputs or natural resources. The knowledge economy commonly makes up a large share of all economic activity in developed countries.
Lesser-developed countries tend to have agriculture or agriculture and manufacturing-based economies, while developing countries tend to have manufacturing or manufacturing and service-based economies, and developed countries tend to have service-based economies.
"Most of the funds that we approve for operation today work in nanotechnology, healthcare and pharmaceuticals," said Ali Saeedi, vice chairman of SEO.
