BUSINESS MODEL

Venture capital is entrepreneurial finance. The raison d’etre for the industry is funding untested ideas and people. To be successful, a VC has to balance financial discipline with entrepreneurial dynamism. TMT Ventures has gone through an experience cycle to evolve a system that balances the interests of the business with those of the investors. This model has heavily benefited from the US venture capital model but has been adjusted along the way to the sensitivities of the Pakistani business environment, since we believe a simple copy pasting of the US model is doomed to fail.

The four contributing factors to this model are:

TMT VENTURES' SUCCESS MODEL
Focus and Support
By keeping its focus on and specializing in only three sectors – telecom, media and technology – TMT Ventures is able to contribute deeply to the development of portfolio companies. By keeping core managements of portfolio companies focused on their core competencies and core products we are able to speed up their time to profitability with minimal loss of resources. This is done both at the board of directors level and also by close monitoring and interaction with the CEOs on a day-to-day basis. TMT Ventures provides the following services to its portfolio companies:-
  • Marketing network: TMT Ventures has excellent contacts within the local industrial and financial sectors which are used to open doors of opportunity for portfolio companies. To facilitate their marketing effort we provide portfolio companies audience before key decision-makers in top 200 corporates in Pakistan. In addition, TMT Ventures also uses its international contacts through forums like The Indus Entrepreneurs (TiE) and Koshish.
  • Business strategy consultation: In frequently called board meetings business strategy is extensively debated by all participants. With a combined experience of over 80 years within the TMT Ventures team this exercise greatly improves the quality of portfolio companies’ decision-making.In frequently called board meetings business strategy is extensively debated by all participants. With a combined experience of over 80 years within the TMT Ventures team this exercise greatly improves the quality of portfolio companies’ decision-making.
  • Help in hiring key management employees: TMT Ventures utilizes its key asset – network of contacts – to help a portfolio company find a suitable candidate for a top marketing, operations or finance job. In a business solely dependent on the quality of people it is an invaluable facility.
  • Provision of infrastructure at Cyberport: TMT Ventures provides physical and high-speed telecommunication infrastructure at its Cyberport. This helps keep the entire focus of portfolio companies’ managements on team building, product making and selling, rather than worrying about power supply or phone connection.
  • Centralized administrative, accounts, tax and legal support: TMT Ventures provides a centralized system of administration, accounts, audit, finance, tax and legal to its portfolio companies. A fully automated Intranet system facilitates the process and ensures full disclosure and transparency.
Equity Ownership

For the first time in Pakistan, TMT Ventures has introduced the concept of equity ownership for core management in a private equity environment. 10% to 30% equity is invested by the owner-managers / core management in the form of sweat equity.

We realize that without the absolute and total commitment of our management teams, our portfolio companies have little chance of success. It is only through the incentive of equity ownership that enterprising people can be enticed to leave their careers at established companies to work for a start-up.

We encourage core managements to expand their teams by including top performing employees and share equity with them. The simple question that needs to be asked is, how critical is a particular employee in the long-term success of the company? The board of directors has final authority to approve any changes in equity ownership.

Equity Ownership

For the first time in Pakistan, TMT Ventures has introduced the concept of equity ownership for core management in a private equity environment. 10% to 30% equity is invested by the owner-managers / core management in the form of sweat equity.

We realize that without the absolute and total commitment of our management teams, our portfolio companies have little chance of success. It is only through the incentive of equity ownership that enterprising people can be enticed to leave their careers at established companies to work for a start-up.

We encourage core managements to expand their teams by including top performing employees and share equity with them. The simple question that needs to be asked is, how critical is a particular employee in the long-term success of the company? The board of directors has final authority to approve any changes in equity ownership.

Corporate Governance

Corporate Governance (CG) is the procedure whereby honest deployment of resources is ensured. This is the most important aspect of TMT Ventures and its hallmark. We believe the transparency and trust that CG brings into the process of corporate management makes it essential to the very process of doing business. We have implemented high standards of CG through both traditional and innovative means; thorough due diligence on the founding managers, centralized accounting, finance, audit and administration system with joint signing of cheques, close monitoring of all expenditures, etc.

TMT Ventures enforces CG at two levels – board and operational. The board of directors (where TMT Ventures has majority) decides how much capital is to be committed and for what use. Operationally the implementation of board’s decisions is ensured through joint signing of cheques. This active management and monitoring of cash in and out flow removes any chances of misuse of capital by portfolio companies.