TEB Private Banking (TEB Private) has provided entrepreneurs and the world of private banking with a new point of view. World Finance spoke to Gökhan Mendi, the company’s Senior Assistant General Manager of Retail and Private Banking Group, about its banking platforms and business model.
What sort of business model is TEB Private based on?
As the first bank to introduce Turkey to private banking, we continue to offer our clients consultation services that include alternative investment products and innovative ideas. We believe that the ‘angel investor’ (one who provides capital for a business start-up) concept, which became possible in Turkey as the treasury began issuing private investor licenses, is going to gain in importance. For this reason, we began offering that concept to our clients as an alternative investment tool in May 2013.
At a time when traditional investment products are slowly losing their attractiveness, we regard alternative investment tools and new ideas such as becoming an angel investor as opportunities that shouldn’t be missed.
The first thing we did when we started out was to determine what our clients needed in order to become a private angel investor. Recognising our responsibility first and foremost as a bank, we designed specialised legal framework training for all of our client representatives and also trained our own personnel how to correctly anticipate and understand the questions and needs that our clients would have about the angel investor concept.
In the follow-up to this, in our capacity as the prime sponsor of meetings that would be taking place among the actors in this investing ecosystem, we decided it would be best to first understand the ecosystem and then decide what our own position in it should be. As a result, in May we created a platform that would allow us to accomplish three objectives: be beneficial both to clients and entrepreneurs; successfully bring potential angel investors and entrepreneurs together; and make both sides aware of each other. We also dubbed it the TEB Private Angel Investment Platform.
This web-based platform is built on the logic of enabling individuals to search for and categorise entrepreneurs according to their own concerns and areas of interest and then contact entrepreneurs directly if they so wish.
What kind of new projects are you involved in now the TEB Private Angel Investment Platform is up and running?
We regard the introduction of a venture-capital-specific legal basis in Turkey and the provision of tax and other incentives designed to increase the number of angel investors as an important step forward in the direction of invigorating the entrepreneurial ecosystem in our country. The new regulations make it possible for individuals to be licensed as an angel investor. We launched a major project to support such efforts and through that project we created the TEB Private Angel Investment Platform.
Besides offering our clients a brand new investment vehicle, this platform also enables us to gain new entrepreneurs for the Turkish economy by finding capital for projects that have a promising future. Our goal in this is to simultaneously benefit both TEB Private’s clients and the national economy.
Through this platform we are providing our clients with access to new ventures being undertaken in Turkey that can be financed from one of two sources at present. One of these sources involves sharing projects that are being supported through the TEB Incubation Centre. We will also see the entrepreneurs here, supported by TEB Incubation Centre, offering consulting, mentorship and training services under TEB startup banking business line. This probably represents the highest level of synergy between SME banking and private banking ever achieved in Turkey.
We have also begun making special presentations for TEB Private Banking clients at the TEB Incubation Centre and a very positive and enthusiastic climate is already taking shape there. We plan to conduct individual or small-group presentations in order to ensure that TEB Private’s clients have access to detailed information about these projects whenever they wish.
At a time when traditional investment products are slowly losing their attractiveness, we regard alternative investment tools… as opportunities that shouldn’t be missed
The other source of enterprise financing is through Etohum, with which we have a sponsorship agreement for that purpose. The promotion of outstanding startup projects selected in Turkey each year and the requirements and steps necessary for taking place in such projects as an investor will be realised thanks to Etohum’s support for this platform within the scope of TEB Private Angel Investment Platform.
TEB Private Angel Investment Platform members automatically become members of investor clubs according to the specific industries whose ventures they say they are interested in. As members of these clubs, they will also receive daily or monthly detailed reports about the ventures on offer.
TEB Private Relationship Managers, who will serve as the single contact point and main communication channel for clients wishing to be angel investors, are currently taking part in training seminars aimed at ensuring that they are up to speed on regulatory details. We continue to explore this new business line without any loss of appetite. TEB Private clients will be able to obtain all the information they need concerning the procedures they must follow in order to be angel investors. They will also, for the first time, be able to see the many e-commerce and other creative projects that are available from other sources in Turkey. We intend to invest in this area and to integrate a new and original business model into the private banking world in the second half of 2014, most likely.
Acting as a unique reference point for both angel investors and entrepreneurs in this sector is one of the greatest and most exciting goals we have identified for ourselves next year. Of course we also regularly share our local skills about such matters with our partner BNP Paribas Wealth Management. As a result of this sharing, we will soon be seeing a private banking-based business model in Turkey, which will focus on entrepreneurship and angel investment in Europe too.
The number of undertakings ready to support both e-commerce and the real sector in Turkey is growing almost day-by-day; the government is providing significant tax and other incentives in support of such effort; and our young people are playing an increasingly more active role in society. These are all indications that it will soon be possible to take medium-term decisions about investing in such areas. Turkey has begun to take steps to transform what we see as a serious potential into opportunity. We are showing our confidence in this area by continuing to invest in and incorporate the angel investor concept into as many of our products and services as possible.
How much support have you given so far? What are the criteria? What are your future plans and goals?
By supporting Startup Turkey 2013, organised by Etohum, which gave new impetus to technology- and economy-related investments and made them accessible to investors, TEB Private took its first step into this ecosystem in February 2013. To date we have supported the formation of environments in which complete details about the ‘regulation on private participation capital’ are explained to potential angel investors in both Startup Turkey and Startup Istanbul.
In 2014, we will be working on a different model in order to diversify the startup resources for our TEB Private Angel Investment Platform, bring potentials on several sectors and bring our investor clients together. As TEB Private Banking, we are designing a structure in which we will investigate entrepreneurs in real sectors who haven’t discovered startup resources in Turkey or are not aware of angel investment potential, and then get in contact with them.
We intend to conduct training programmes for TEB Private clients on all of these issues. We will also be employing our specialists to reach out to and inform as many potential angel investors as possible. To date we have been heavily involved in communication studies to inform our clients about this subject. In 2014, we plan to bring entrepreneurs and TEB Private investors together several times in different cities.
We also plan to develop and carry out projects compatible with the Startup and Angel Investor concepts through our highly innovative digital platform assets, which can be found at the URL below.