Turkey, as one of the pioneering countries that has particular
regulation and tax reliefs for angel investment, has almost TRY 10
million volume of angel investment which is remarkably less when
compared with Europe and U.S. markets.
The angel investment, as defined as "Individual
Participation Investment" in the Regulation on Individual
Participation Investment ("Regulation") which is in
effect since 15 February 2013 growing smoothly and attracts the
prospective angels' interest day by day. Today there are almost
60-65 certified angel investors in Turkey whom are accredited by
the Undersecretariat of Treasury following to their individual
applications. However according to the provisional clause 1 of the
Regulation, the Undersecretariat of Treasury will not accept any
individual application to become "Angel Investor" as of
This will raise the importance of networks and it is expected
that both in evaluation and accreditation processes, the private
sector will take effective role in funding in parallel to the
project valuation aspect.
This will also enable the networks and bans to be much more
eagerness in a competitive market to find out and fund the proper
projects as a gateway to "invest" and
Today all around the world it is well accepted that either in
early stage or in form of seed funding the bans and networks are
functioning alike experts on the way to the angel investment. It is
clearly noted by the authorities that, direct individual
applications might be risky due to the attempts to abuse of rights
of benefiting the tax reliefs.
The bans and networks all around the world play a key role in
angel investment. Not limited to act as intermediaries for filing
an application to be accredited the bans and networks are expected
to play crucial roles in fund management since we think that it
will require so in near future. Namely, it is certain that since
the process of funding is mostly similar to the modeling of private
equities and venture capitals, new issues apart from the buy outs
or funding strategies in high volume businesses, arise in terms of
fund origins among angel investor.
To give an example in this regard, it has been recently started
to be discussed in USA on structuring and management of funds
provided by small contributions which is called "Crowd
As tendency to invest in IT related projects the crowd funding
is managed thru the web sites in today's U.S.A however the
volume of the fund reaching EUR 18 millions in the market that is
expected to led the investors to apply fund management strategies
and tools to the extent they wish to benefit from the added value
generated from angel investment.
In projection of the growth rate of angel investment, the
associations or federations of networks or bans shall be accredited
to take part in management of crowd funding as well. In scaling the
projections it is obviously understood that even the investment
amount per project is much more less than the volume in similar
funding and financing models such as private equity and venture
capital, the minimization of the fund as in crowd funding and
hedging the risk in parallel to this shall be converted to an
investment fund or structured as dividend funds providing a well
arranged mechanism is set and insured by contribution of bans and
In consideration of setting the rules by regulatory authorities
the bans and networks are recommended to be gathered even on
regional or portfolio basis and determine the thresholds of each
prospective investment. This will discipline the angel investment
and gain corporate governance principles to ensure the project
running. On the other hand, after signing term sheets and before
structuring the modeling both parties' interests will be
secured through the insurance of representation and warranties.
By implementation of this projection, the networks and bans as
regulated authorities will deemed as contributors to FDI in
countries and angel investment volume will reach certain rates
providing the dividend funds are managed to the purpose of
re-investment or as resource to re-investment alike the pension
funds do all around the world.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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With effect from 18 April Jersey is introducing a new regime in respect of private funds - simplifying the regulatory regime, and extending the benefits of flexibility and speed across Jersey's private funds space.
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