Thread by @faizansiddiqi

I read this with interest, it is also indicative of the fact that the ecosystem is slowly getting there. But what every one seems to be missing that the free report from the article is a MAC(Mutual Admiration Club) because it shies away from asking the million $ Question

https://twitter.com/MAGNITT/status/1304298631885918209

The question being, how many of these VCs, or Angels actually operate being domiciled out of Pakistan? Whilst I whole heartedly agree that regulations make it tough to near impossible to setup efficient structures quickly, all these cheerleaders of Pakistani talent + Startups

from the Valley to DC to Holland to Ireland to Singapore and beyond are and continue to encourage most if not all startups to incorporate outside of Pakistan. So Much for misguided front end Optics of Promoting Pakistan and Pakistani companies. Why is this important now?

In short they are raising overseas in to offshore entities & when liquidity events happen this money will be far far away from our shores. When the time comes most startups will pull of The double Irish with a Dutch sandwich for tax efficiency .investopedia.com/terms/d/double…

What our simple champions & retweeters and the Pakistan VC promotion brigade is missing out on, is the fact that since time immemorial, starting from Daraz, none,if any money exchanged hands in PK.Yet every one wants to give in bound investment in to PK tax breaks and BOI support

It would only be fair if their operating structures were Pakistani based vs foreign. Even the PM + Team of SPAMMers continue to miss the point, beyond the hype & media articles of VCgroups raising 10/20/30m$ to focus on deals in PK almost all comprise of foreign raises+ entities.

In simple terms, the money they raise, is held in NL/Singapore, they ask Pakistani Startups to be eligible for funding to also incorporate there. They then advance the money into that startups Singapore account, the startups then takes what it needs for ops and sends it home

Whilst money is coming to PK, i.e use of proceeds will happen locally mostly. When the startup scales or is ready to raise Series A etc, the money comes in to its foreign account, similarly if the startup sells equity, the money lands in its foreign account. Do you see the issue?

From the Daraz Deals and Telenor banks deals whose FX impacts I highlighted in '17 here bit.ly/3kfoMcS to the VCs & the real cost of these funds coming to PK which I wrote about here bit.ly/3c4UYfT r a good starting point for founders to evaluate their options

The sad reality is that very little has been raised by Pakistan incorporated startups, not talking about PK Origin startups that we love to own and claim like Careem, Airlift, Bykea for example, from what I know are all foreign domiciled.Just using them as an example because of

The hoopla around their rounds and their Pakistani origins. Don't get me wrong, money coming to recognize talent and a good idea is great. I am just identifying the VC cheerleading thats happening and why its mis-guided as an image of Pakistani startups getting funded.

Thats not true & these Pakistani Origin VCs & Cheerleaders are actually doing a dis service as their 1st ASK is for the startup to do a foreign incorporation.Whilst its not a gaali to do so,it shows you a great deal about ecosystem maturity & the wild west attitude of those with$

So dont believe the hype thats the moral of the story, question all these posers who want to sell you snake oil and verify their self interest before your evaluate their interest in your company. Every ones not bad and some truly have no other way to bring money in, but most

are seeding this culture of quick exits on follow on capital by telling the founders nothing will happen if they don't incorporate offshore. So when I read the Cheerleading clubs glowing accolades for each other, I think its only fair to call out what they aren't highlighting

All that glitters isn't gold. We are still far away from mature VC/Accelerant money from really coming to our shores, the total blame cant rely on those raising offshore, but also in equal parts on govt policy and the lack their off. Its a tough situation but the VCs must

call a spade a spade. The las thing we need are visions of grandeur & mis placed expectations + a tweet from the SAPM claiming credit for bringing in tech funding. Whats really coming in,is part of the funds raised offshore to fund the labor arbitrage in PK for a long term VC Win

The more you know the better off you are and you can ask more intelligent questions and evaluate for your self whats really happening vs what you are being told. Given that the thought police regulates so many other parts of our existence, a public service msg like this is key

For the ecosystem to grow, real money has to land on our shores. Till then ask tough questions & don't be fooled, our time will come too lets make sure we are equipped to cash in, locally. @rebootdude @jehan_ara @YusufJan @raza_matin @Ash_Kalim @TalhaIzhar @SaadGH @FaizaYousuf