Venture capital investment : challenges and potential solutions

الملخص EN

Islamic economists have been viewing Venture Capital (VC) as a preferred mode of financing, mainly because they regarded its equity-based nature as a contrast to interest bearing loans.

However, many practices of conventional VCs call for a thoughtful Sharīʿah(1)-compliance examination.

These conditions and tools are essential for enabling VC companies to mitigate and reduce risks arising from their venturous investments.

This paper highlights the main challenges in the application of these contractual terms and suggests alternatives because a successful Islamic VC concept requires more than just removing parts which are not Sharīʿah-compliant