Our Enterprise Ecosystem and VCIF

The venture ecosystem is followed with interest in Turkey as well as all over the world, and the ecosystem continues its development with the participation of new stakeholders every day. KPMG Turkey regularly publishes Turkey's Venture Ecosystem Investments Assessment for the year 2022 2. The quarterly report contains important tips.

Global venture investments the economic slowdown in the world, political crises, recession worries, war..while it has been declining for etc reasons, it has experienced a parallel decline in our country. However, with 82 units in the enterprise ecosystem of our country, the record was broken by reaching the highest number of transactions reached in a quarter, and the remarkable side of the business was the increase in seed investments. Seed investments, which reached 61 units with an almost double increase compared to the previous quarter, show that the excitement of our ecosystem in search of potential unicorn candidates in this regard continues to increase Decisively.

Another remarkable factor is that Venture Capital Funds are more effectively involved in investments. As is well known, venture capital investment Funds (VCIF), funds from investors the potential for rapid growth, create jobs, that will allow the entry of foreign exchange through exports as a source of funding for initiatives directed at the same time, that seek high returns for the investors institutional structures. As one of the most important components of the venture ecosystem, VCIF, which is one of the biggest obstacles to the growth of startups in our country, is exhibiting a very rapid growth due to its ability to be a solution instrument for financing. As a matter of fact, according to the September 2022 figures, it is seen that VCIF has increased by 253% in volume terms in the last year, reaching TL 28.6 Billion and from 79 to 140 units in terms of volume. VCIF are not only a financing tool, but also an integrated solution tool for the development and growth of the venture with the mentoring, marketing, management, legal consultancy provided by the venture company in parallel with the needs, synergy provided by the portfolio it has created.

At this point, the public's high awareness and incentives on VCIF also increase the attractiveness of funds, allowing the diversification of financing instruments in economic activity and further increasing financial support. For this purpose, according to our tax laws;

Funds are exempt from corporate income tax,
Legal entities can deduct the amount they invest from corporate taxes by directing 10% of their earnings to the fund as an investment,
Again, legal entities are exempt from tax on income received from the return of fund participation shares to the fund and profit share income,
Individual investors are exempt from withholding the fund shares they have received during incentive periods (current effective date: 31.12.2022) no matter when they dispose of them,
In addition, even if the shares of funds received by individual investors are not received during the incentive period, the withholding exemption is still valid if they are held for 2 years.

Every day, more and more venture capital firms contribute to the economy of our country by receiving support from the GDF and continue to bring it to startups, investors and the economy as the VCIF grows. As a 24 Portfolio, we continue to feed the ecosystem with our 8pc VCIF. For our funds and more www.24portfoy.com.tr

Barış BAYRAK

Venture Capital Investment Funds Assistant Specialist