Foreign investment means Iranian startup growth

Foreign investment means Iranian startup growth

Haadi Farnood, Kamva founder

Farnood says: “investment is like a market in which competition is the most important factor. The more the number of investors and variety of investments, the much rational the numbers in that market. Investment in IT has high risk so domestic investors don’t want to get involved in it. Foreign investment in this situation is very important and useful not only for financial issues but also for receiving experience.”

Haadi Farnood, Kamva founder

Farnood says: “investment is like a market in which competition is the most important factor. The more the number of investors and variety of investments, the much rational the numbers in that market. Investment in IT has high risk so domestic investors don’t want to get involved in it. Foreign investment in this situation is very important and useful not only for financial issues but also for receiving experience.”

He adds: “we should welcome these foreign investments and don’t fear because investors are looking for their profit and do their best to succeed.” He believes: “instead we should look at countries like India, USA and even UAE which have attracted many foreign investors. This fear results from lack of knowledge about investment and lack of information about capital market. Because most important thing for an investor is the return of capital.” He also points out that so far we have indirect foreign investment which doesn’t make the market stable. It is important that investor has direct contact with entrepreneur.”

He says that at this time many foreign investors want to enter Iran market. But there are concerns about the safety of their capitals. Thus we should try to show them it is safe to invest in Iran. He also mentions to the difference between foreign and domestic investors. Foreign investors tend to risk more because they experienced many success and failures. Their financial ability and experience in international markets make them accept more risks. Moreover, when they enter Iran market, domestic investors will be encouraged to invest in areas related to IT. In this way, new method of investment would be used in our country. It also has psychological effect which is related to the fact that people trust foreign investors more. So when they succeed in this field, domestic investors would be eager to invest based on their trust on those foreign investors. This leads to the growth of startup and knowledge-based businesses and other economic areas.

Haadi Farnood continues: “we should not worry that a part of internal company belongs to a foreigner because it even contributes to economic growth. For example if a big investor wants to buy Digikala, it is not detriment to our country because its capital enters Iran and contributes to employment. When foreign investors become attracted to an Iranian company, it makes positive psychological environment for our country and investors. But we must take advantage of foreign expertise as well. Currently many people are eager to work in Iran market but a few people enter this market. So we must show foreigner that it is safe to invest in Iran so that more people are encouraged to enter Iran market. Maybe Sarava could have gained even more capital from domestic investors but in current situation foreign investment is more important and helps others to enter this market. Because of large number of commercial competitors in capital market, it is important to be the first one who enters a market. We should think more positively and take necessary measures so that foreign investors come here and bring their money and knowledge.

Thus, first of all we should remove the barriers which foreign investors are faced when entering Iran market. But on the other hand, we should stop startup companies from entering Iran market because we have the technical potential and after receiving to-date knowledge and attracting capital, we can open startup companies. Otherwise, startup companies will enter and dominate Iran market. For example, maybe Telegram could have been an Iranian company but this company has entered from another country and there were no facilities so that Iranians could open a company like this. Therefore, if we hinder foreign investors to enter their capital to Iran, we actually help foreign startup companies to grow and dominate Iran market. Instead, we can use foreign investments and knowledge and make national startup companies.

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