Venture Capital Ecosystem Reference
Scope
This pack covers the venture capital ecosystem: fund structures, major global and MENA-specific funds, investment thesis frameworks, deal mechanics, and investor rights. It is relevant to startup counsel, M&A lawyers advising VC-backed companies, and founders navigating the fundraising process.
VC Fund Structure
How a VC Fund Works
A typical VC fund is structured as a limited partnership:
- General Partners (GPs): manage the fund; make investment decisions; carry fiduciary duties to LPs
- Limited Partners (LPs): provide the capital; have limited liability; include pension funds, endowments, sovereign wealth funds, family offices, fund of funds, corporations
- Management fees: typically 2% per annum on committed capital during the investment period; covers fund operations
- Carried interest ("carry"): typically 20% of profits after LPs receive their capital back (plus hurdle rate if applicable); GP's primary economic incentive
- Hurdle rate: minimum return LPs must receive before GP takes carry (typical: 8% IRR)
- Fund life: typically 10 years (2-year extension possible); investment period first 5 years
Fund Types by Stage
| Fund type |
Stage |
Check size |
Key metrics |
| Pre-seed / angel |
Idea to MVP |
$25k–$500k |
Team quality; market size |
| Seed fund |
MVP to early traction |
$500k–$3M |
PMF signals; early revenue |
| Series A fund |
PMF to scaling |
$5M–$15M |
Unit economics; go-to-market |
| Growth equity |
Proven model, scale-up |
$20M–$100M+ |
Revenue growth rate; NRR |
| Late-stage / pre-IPO |
Pre-public, large scale |
$50M–$500M+ |
Path to profitability; market position |
Major Global VC Funds
Tier 1 (Global Platform Funds)
| Fund |
HQ |
Notable investments |
Style |
| Andreessen Horowitz (a16z) |
Menlo Park |
Coinbase, Airbnb, GitHub, Lyft |
Opinionated thesis; large service platform for portfolio |
| Sequoia Capital |
Menlo Park |
Apple, Google, Oracle, Stripe, Zoom, WhatsApp |
Long-hold, multiple stage; rebranded as permanent capital vehicle |
| Benchmark |
Menlo Park |
Uber, Twitter, Snap, Dropbox, WeWork |
Small team, lean model; no corporate venture arms |
| Founders Fund |
San Francisco |
SpaceX, Palantir, Airbnb, Stripe |
Deep-tech focus; contrarian thesis |
| Accel |
Menlo Park / London |
Facebook, Spotify, Slack, Dropbox |
Strong Europe + India presence |
| Kleiner Perkins |
Menlo Park |
Amazon, Google, Genentech |
Legacy firm; diversified across sectors |
| General Catalyst |
Boston |
Stripe, Airbnb, Snap |
Multi-stage; health + fintech focus |
| Tiger Global |
New York |
Multi-stage; heavy Asia exposure; known for fast decisions and high valuations |
|
Tier 1 — Growth/Multi-Stage with MENA Exposure
| Fund |
Notes |
| SoftBank Vision Fund |
Massive scale ($100B+); has invested in MENA (Careem, OYO) |
| DST Global |
Yuri Milner; tech-focused; no board seats model |
| Goldman Sachs Asset Management |
Growth equity; multi-geography |
MENA VC Ecosystem
Pan-MENA Funds
| Fund |
HQ |
Focus |
Notable investments |
| BECO Capital |
Dubai |
Broad tech; Series A/B |
Vezeeta, Anghami, Telr |
| MEVP (Middle East Venture Partners) |
Beirut / Dubai |
Early stage; broad tech |
Anghami, Wamda, Keeward |
| Shorooq Partners |
Abu Dhabi |
UAE/KSA/global; seed to Series A |
Lean In, Pure Harvest |
| Nuwa Capital |
Riyadh / Dubai |
GCC-focused; tech |
Multiple portfolio companies |
| Wamda Capital |
Dubai |
Broad MENA; early stage |
Bayt.com, Careem (early), Fetchr |
| STV (Saudi Technology Ventures) |
Riyadh |
KSA-focused; STC anchor LP |
Telfaz11, Nana, Foodics |
Saudi Arabia-Specific
| Fund |
Notes |
| Sanabil Investments |
PIF subsidiary; invests in international and domestic VC funds and directly |
| Saudi Aramco Energy Ventures (SAEV) |
CVC; energy-tech, industrial tech |
| SVC (Saudi Venture Capital) |
Government fund-of-funds; invests in local VC managers |
| Raed Ventures |
Early-stage; KSA-focused |
| Impact46 |
Riyadh; Series A/B; consumer + fintech |
Lebanon / Regional (Pre-crisis Landscape)
| Fund |
Notes |
| MEVP |
Lebanon-founded; now Dubai-based; still active |
| Bader Young Entrepreneurs Program |
World Bank/Lebanon; micro-grants |
| Cedrus Invest |
Lebanese commercial bank VC arm |
| KAFALAT |
Lebanese government guarantee scheme for SME loans — not VC but relevant to Lebanon funding landscape |
Emerging MENA VC Infrastructure
- VEKTOR — Abu Dhabi-based; deep-tech focus; connects MENA startups with European VC
- Dubai Future District Fund — government of Dubai; ecosystem development mandate
- Abu Dhabi Investment Office (ADIO) — not a VC fund but incentive programs for startups to set up in Abu Dhabi
VC Investment Terms — Legal Reference
Key Economic Terms
| Term |
Definition |
Founder implication |
| Pre-money valuation |
Company value before the investment |
$10M pre + $2M investment = $2M/12M = 16.7% dilution |
| Post-money valuation |
Pre-money + investment amount |
Used to calculate investor ownership |
| Liquidation preference |
VCs get X× their investment back before founders see proceeds |
1× non-participating = founder-friendly; 2× or participating = aggressive |
| Participating preferred |
VC gets preference AND shares remaining proceeds pro-rata |
Double-dips; avoid if possible |
| Anti-dilution |
Adjusts VC's ownership if a down round occurs |
Full ratchet = very aggressive; broad-based WA = standard |
| Option pool |
Reserved equity for future employee grants |
"Option pool shuffle" — investors often require pre-money option pool expansion, increasing founder dilution |
Key Control Terms
| Term |
Definition |
Founder implication |
| Board seat |
Investor representative on the board |
Protect governance; maintain founder majority until Series B |
| Protective provisions |
Investor veto rights on specific actions |
Standard: new equity, M&A, debt, change of business — watch for overly broad lists |
| Drag-along |
Forces minority shareholders to sell if majority approves |
Ensure threshold is majority of all shares, not just preferred |
| Information rights |
Investor's right to financial reporting |
Standard; monthly/quarterly financials, annual audited |
| Pro-rata rights |
Right to invest in future rounds to maintain ownership % |
Valuable for VCs; fine for founders |
| Right of first refusal (ROFR) |
Investor right to buy shares if founder wants to sell |
Standard; negotiate carve-outs for estate planning transfers |
MENA-Specific VC Legal Considerations
- Sharia-compliant structures: some MENA investors (particularly GCC sovereign funds) require Sharia-compliant investment structures; standard US-style preferred shares may need adaptation (avoiding riba — fixed guaranteed return)
- Foreign ownership restrictions: UAE-mainland companies historically required UAE national ownership (51%); reforms under the Companies Law 2015 amendments (and further liberalization) have reduced restrictions in many sectors — verify current rules for the specific sector
- Exit routes in MENA: IPO exits (DFM, ADX, TADAWUL, EGX) are an option but market depth is shallower than NASDAQ; M&A exits to regional or international acquirers more common; secondary sales to growth funds
- Currency risk: MENA investments often in USD; if company revenues are in local currency (especially EGP, LBP), this creates FX exposure that investors and founders should address in financial planning
VC Fund Legal Documents
For legal professionals advising on VC transactions, the key document set includes:
| Document |
Purpose |
| Term sheet |
Non-binding summary of deal economics and governance |
| Share Purchase Agreement (SPA) |
Definitive agreement for share issuance; reps & warranties |
| Shareholders' Agreement |
Governs rights and obligations of all shareholders |
| Articles of Association (amendment) |
Bakes preferred share rights into the company's constitution |
| Investors' Rights Agreement |
Information rights, registration rights, pro-rata |
| Right of First Refusal & Co-Sale Agreement |
Share transfer restrictions |
| Management Rights Letter |
Required by some LPs (ERISA-exempt VCs) |
| Legal opinion |
Company counsel opinion on due authorization, valid issuance |
| Disclosure schedule |
Carve-outs from representations and warranties |
See [[workflow-investment-round-closing-pack]] for the full closing checklist.
How to Use This Pack
Reference when:
- Advising a MENA startup on its VC fundraising options
- Reviewing a term sheet or shareholders' agreement in a VC round
- Conducting due diligence on a VC-backed target
- Advising a family office or institutional investor on entering the MENA VC asset class
- Understanding an investor's position and rights in a dispute context
Caveats & Currency
Fund activity, AUM, and focus areas change frequently. The MENA VC ecosystem is particularly dynamic — funds launch, close, and pivot regularly. Fund details here reflect public information as of mid-2024; verify current status before advising. Sharia compliance structures for VC investment are an evolving area requiring specialist Sharia advisory.
Related Skills
- [[wiki-startup]]
- [[wiki-sales]]
- [[wiki-strategy]]
- [[workflow-investment-round-closing-pack]]
- [[draft-term-sheet-vc]]
- [[draft-shareholders-agreement]]
1---2name: wiki-vc-startups3description: Use when a user asks about venture capital ecosystem participants, fund dynamics, MENA-specific VC funds, investment thesis terminology, or the VC-startup relationship from a legal-advisory or deal-structuring perspective. Provides a reference on global and MENA VC landscape, key fund characteristics, deal terms, and investor rights — relevant for startup counsel, transactional lawyers, and founders navigating the VC ecosystem.4license: MIT5---67# Venture Capital Ecosystem Reference89## Scope1011This pack covers the venture capital ecosystem: fund structures, major global and MENA-specific funds, investment thesis frameworks, deal mechanics, and investor rights. It is relevant to startup counsel, M&A lawyers advising VC-backed companies, and founders navigating the fundraising process.1213---1415## VC Fund Structure1617### How a VC Fund Works1819A typical VC fund is structured as a limited partnership:20- **General Partners (GPs)**: manage the fund; make investment decisions; carry fiduciary duties to LPs21- **Limited Partners (LPs)**: provide the capital; have limited liability; include pension funds, endowments, sovereign wealth funds, family offices, fund of funds, corporations22- **Management fees**: typically 2% per annum on committed capital during the investment period; covers fund operations23- **Carried interest ("carry")**: typically 20% of profits after LPs receive their capital back (plus hurdle rate if applicable); GP's primary economic incentive24- **Hurdle rate**: minimum return LPs must receive before GP takes carry (typical: 8% IRR)25- **Fund life**: typically 10 years (2-year extension possible); investment period first 5 years2627### Fund Types by Stage2829| Fund type | Stage | Check size | Key metrics |30|-----------|-------|-----------|------------|31| Pre-seed / angel | Idea to MVP | $25k–$500k | Team quality; market size |32| Seed fund | MVP to early traction | $500k–$3M | PMF signals; early revenue |33| Series A fund | PMF to scaling | $5M–$15M | Unit economics; go-to-market |34| Growth equity | Proven model, scale-up | $20M–$100M+ | Revenue growth rate; NRR |35| Late-stage / pre-IPO | Pre-public, large scale | $50M–$500M+ | Path to profitability; market position |3637---3839## Major Global VC Funds4041### Tier 1 (Global Platform Funds)4243| Fund | HQ | Notable investments | Style |44|------|-----|---------------------|-------|45| Andreessen Horowitz (a16z) | Menlo Park | Coinbase, Airbnb, GitHub, Lyft | Opinionated thesis; large service platform for portfolio |46| Sequoia Capital | Menlo Park | Apple, Google, Oracle, Stripe, Zoom, WhatsApp | Long-hold, multiple stage; rebranded as permanent capital vehicle |47| Benchmark | Menlo Park | Uber, Twitter, Snap, Dropbox, WeWork | Small team, lean model; no corporate venture arms |48| Founders Fund | San Francisco | SpaceX, Palantir, Airbnb, Stripe | Deep-tech focus; contrarian thesis |49| Accel | Menlo Park / London | Facebook, Spotify, Slack, Dropbox | Strong Europe + India presence |50| Kleiner Perkins | Menlo Park | Amazon, Google, Genentech | Legacy firm; diversified across sectors |51| General Catalyst | Boston | Stripe, Airbnb, Snap | Multi-stage; health + fintech focus |52| Tiger Global | New York | Multi-stage; heavy Asia exposure; known for fast decisions and high valuations |5354### Tier 1 — Growth/Multi-Stage with MENA Exposure5556| Fund | Notes |57|------|-------|58| SoftBank Vision Fund | Massive scale ($100B+); has invested in MENA (Careem, OYO) |59| DST Global | Yuri Milner; tech-focused; no board seats model |60| Goldman Sachs Asset Management | Growth equity; multi-geography |6162---6364## MENA VC Ecosystem6566### Pan-MENA Funds6768| Fund | HQ | Focus | Notable investments |69|------|-----|-------|---------------------|70| BECO Capital | Dubai | Broad tech; Series A/B | Vezeeta, Anghami, Telr |71| MEVP (Middle East Venture Partners) | Beirut / Dubai | Early stage; broad tech | Anghami, Wamda, Keeward |72| Shorooq Partners | Abu Dhabi | UAE/KSA/global; seed to Series A | Lean In, Pure Harvest |73| Nuwa Capital | Riyadh / Dubai | GCC-focused; tech | Multiple portfolio companies |74| Wamda Capital | Dubai | Broad MENA; early stage | Bayt.com, Careem (early), Fetchr |75| STV (Saudi Technology Ventures) | Riyadh | KSA-focused; STC anchor LP | Telfaz11, Nana, Foodics |7677### Saudi Arabia-Specific7879| Fund | Notes |80|------|-------|81| Sanabil Investments | PIF subsidiary; invests in international and domestic VC funds and directly |82| Saudi Aramco Energy Ventures (SAEV) | CVC; energy-tech, industrial tech |83| SVC (Saudi Venture Capital) | Government fund-of-funds; invests in local VC managers |84| Raed Ventures | Early-stage; KSA-focused |85| Impact46 | Riyadh; Series A/B; consumer + fintech |8687### Lebanon / Regional (Pre-crisis Landscape)8889| Fund | Notes |90|------|-------|91| MEVP | Lebanon-founded; now Dubai-based; still active |92| Bader Young Entrepreneurs Program | World Bank/Lebanon; micro-grants |93| Cedrus Invest | Lebanese commercial bank VC arm |94| KAFALAT | Lebanese government guarantee scheme for SME loans — not VC but relevant to Lebanon funding landscape |9596### Emerging MENA VC Infrastructure9798- **VEKTOR** — Abu Dhabi-based; deep-tech focus; connects MENA startups with European VC99- **Dubai Future District Fund** — government of Dubai; ecosystem development mandate100- **Abu Dhabi Investment Office (ADIO)** — not a VC fund but incentive programs for startups to set up in Abu Dhabi101102---103104## VC Investment Terms — Legal Reference105106### Key Economic Terms107108| Term | Definition | Founder implication |109|------|-----------|-------------------|110| Pre-money valuation | Company value before the investment | $10M pre + $2M investment = $2M/12M = 16.7% dilution |111| Post-money valuation | Pre-money + investment amount | Used to calculate investor ownership |112| Liquidation preference | VCs get X× their investment back before founders see proceeds | 1× non-participating = founder-friendly; 2× or participating = aggressive |113| Participating preferred | VC gets preference AND shares remaining proceeds pro-rata | Double-dips; avoid if possible |114| Anti-dilution | Adjusts VC's ownership if a down round occurs | Full ratchet = very aggressive; broad-based WA = standard |115| Option pool | Reserved equity for future employee grants | "Option pool shuffle" — investors often require pre-money option pool expansion, increasing founder dilution |116117### Key Control Terms118119| Term | Definition | Founder implication |120|------|-----------|-------------------|121| Board seat | Investor representative on the board | Protect governance; maintain founder majority until Series B |122| Protective provisions | Investor veto rights on specific actions | Standard: new equity, M&A, debt, change of business — watch for overly broad lists |123| Drag-along | Forces minority shareholders to sell if majority approves | Ensure threshold is majority of all shares, not just preferred |124| Information rights | Investor's right to financial reporting | Standard; monthly/quarterly financials, annual audited |125| Pro-rata rights | Right to invest in future rounds to maintain ownership % | Valuable for VCs; fine for founders |126| Right of first refusal (ROFR) | Investor right to buy shares if founder wants to sell | Standard; negotiate carve-outs for estate planning transfers |127128### MENA-Specific VC Legal Considerations129130- **Sharia-compliant structures**: some MENA investors (particularly GCC sovereign funds) require Sharia-compliant investment structures; standard US-style preferred shares may need adaptation (avoiding riba — fixed guaranteed return)131- **Foreign ownership restrictions**: UAE-mainland companies historically required UAE national ownership (51%); reforms under the Companies Law 2015 amendments (and further liberalization) have reduced restrictions in many sectors — verify current rules for the specific sector132- **Exit routes in MENA**: IPO exits (DFM, ADX, TADAWUL, EGX) are an option but market depth is shallower than NASDAQ; M&A exits to regional or international acquirers more common; secondary sales to growth funds133- **Currency risk**: MENA investments often in USD; if company revenues are in local currency (especially EGP, LBP), this creates FX exposure that investors and founders should address in financial planning134135---136137## VC Fund Legal Documents138139For legal professionals advising on VC transactions, the key document set includes:140141| Document | Purpose |142|----------|---------|143| Term sheet | Non-binding summary of deal economics and governance | 144| Share Purchase Agreement (SPA) | Definitive agreement for share issuance; reps & warranties |145| Shareholders' Agreement | Governs rights and obligations of all shareholders |146| Articles of Association (amendment) | Bakes preferred share rights into the company's constitution |147| Investors' Rights Agreement | Information rights, registration rights, pro-rata |148| Right of First Refusal & Co-Sale Agreement | Share transfer restrictions |149| Management Rights Letter | Required by some LPs (ERISA-exempt VCs) |150| Legal opinion | Company counsel opinion on due authorization, valid issuance |151| Disclosure schedule | Carve-outs from representations and warranties |152153See [[workflow-investment-round-closing-pack]] for the full closing checklist.154155---156157## How to Use This Pack158159Reference when:160- Advising a MENA startup on its VC fundraising options161- Reviewing a term sheet or shareholders' agreement in a VC round162- Conducting due diligence on a VC-backed target163- Advising a family office or institutional investor on entering the MENA VC asset class164- Understanding an investor's position and rights in a dispute context165166---167168## Caveats & Currency169170Fund activity, AUM, and focus areas change frequently. The MENA VC ecosystem is particularly dynamic — funds launch, close, and pivot regularly. Fund details here reflect public information as of mid-2024; verify current status before advising. Sharia compliance structures for VC investment are an evolving area requiring specialist Sharia advisory.171172## Related Skills173174- [[wiki-startup]]175- [[wiki-sales]]176- [[wiki-strategy]]177- [[workflow-investment-round-closing-pack]]178- [[draft-term-sheet-vc]]179- [[draft-shareholders-agreement]]
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