Let the investment games begin

Lebanese venture capital firms (VCs) could not be more pleased. Following Circular 331 passed last August by Banque du Liban (BDL), Lebanon’s central bank, to ‘de-risk’ commercial banks’ investments in startups, the banks have opted to invest handsome sums into VCs. Banks considered this the ideal way to benefit from Circular 331, which guarantees 75 percent of their investment either directly into startups or into startup funds. According to Stephane Abichaker, head of investment banking at Blominvest Bank, 70 percent of alpha banks are choosing to invest in funds. Incentivizing investment As VCs await the central bank’s approval of legal documents determining the structure of the funds, it is clear that the incentive has the potential to create dramatic change in the sector. Investments that benefit from Circular 331 are to be in Lebanese joint-stock companies that contribute to the national knowledge economy — a term loosely used to describe