Palestinian-American software expert Saed Nashef was working in the US when he visited his parents in East Jerusalem in 2007.
He ended up staying, to help Palestinians develop an IT sector that will be crucial for any future, independent state.
Even more unusually, the 42-year entrepreneur hooked up with an Israeli businessman, Yadin Kaufmann, pooling their experience and launching last month a $28.7 million venture capital fund for Palestinian start-ups ? the first of its kind.
The Sadara Fund, also called the Middle East Venture Capital Fund, boasts a list of high-profile backers, including some of the world?s top IT firms, the EU?s European Investment Bank and an investment fund of billionaire George Soros.
The partners say their initial capital will be invested in around 15 Palestinian companies over the next five years and they eventually intend to raise $50 million for the fund.
?The motives for doing this are more business-oriented than anything else,? said Nashef, who spent nearly 16 years working Hat Microsoft and other software companies in the United States.
?However we cannot dismiss other potential (results), to the extent that a strong economy, specifically in the information and telecommunications technology sector, can help support the establishment of the Palestinian state. That is something that we would be proud of, but it?s not a goal,? he told Reuters.
Palestinians are building the institutions of a state they aim to establish in the West Bank and Gaza, with East Jerusalem as its capital. Israel has occupied this land since 1967, but quit the Gaza Strip in 2005.
Peace talks between the two sides broke down last September and Palestinians plan to bypass Israel and seek recognition of their statehood at the U.N. General Assembly in September.
SHORTLISTING OF COMPANIES
Nashef said the fund was shortlisting potential recipients and hoped to announce the first deal in the next six months. ?I met interesting and fascinating people in the technology sector. I saw the fire in their eyes,? he said.
The high-tech sector in the Palestinian Territories includes 300 companies employing 3,200 people. Cisco Systems Inc and Google are among the international investors.
The Palestinian sector is dwarfed by that of its neighbour, Israel, with 45 percent of the country?s $50 billion annual export market coming from hi-tech. Nashef hopes that this proximity, combined with Kaufman?s involvement, will pay off.
?There are many benefits to having the number three hi-tech industry in the world next door. Opportunities for knowledge transfer, mentoring, guidance and access to networks will be available to companies we invest in should they choose to take advantage of it,? he said.
The venture capitalists want to invest in two to three companies per year at a rate of $2 to $3 million per investment over the lifetime of the fund, which will be 10 years.
It may look a small sum by international standards, but it will help in providing opportunity to have ?a social impact, creating high-value added jobs and creating a sector in this economy that is sustainable,? Nashef said.
Palestinian entrepreneurs today are developing all kinds of innovative products such as Twitter-style social media platforms and voice-delivered online advertisements, he added.
But some Palestinians complain that Israeli control of the airwaves in the occupied Palestinian territories is hobbling development. They demand that Israel give Palestinians access to 3G and WiMax, an advanced wireless broadband standard. ?There are definitely limitations and the entrepreneurs who are launching start-ups in Palestine will likely have to deal with them,? Nashef said. ?But we believe that these limitation are not going to be an insurmountable obstacle.?
The fundamentals for opportunities and doing business remain strong despite the political instability, he said.
?That has made us much more adaptable, much better and much more shrewd businessmen, able to survive under volatile conditions,? he added, drawing on a cigarette.
The father of four believes that what made him resettle in the West Bank, other than business motives, was the belief that Palestinians had a huge opportunity to make a big contribution in an area that he understood.
?Being able to contribute something to my people, and my country (is) really what kept me going and what kept me here.? (By Mohammed Assadi)
Source: http://www.kippreport.com/2011/05/venture-capital-fund-helps-palestinians-build-state/
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