TLDR:
– Economy Minister Rafizi Ramli suggests driving venture capital firms specifically for the Bumiputera community
– Shift away from focus on raising Bumiputera equity to measuring value creation in businesses
At the seventh edition of the Bumiputera Economic Congress in Putrajaya, Economy Minister Rafizi Ramli hinted at the possibility of driving venture capital firms specifically for the Bumiputera community to invest in potential startups. This move signals a shift away from the focus on raising Bumiputera equity as the core objective of a race-based economic framework. Rafizi argued for a more holistic approach to gauge Bumiputera economic success, emphasizing the need to measure value creation by Bumiputera entrepreneurs.
Rafizi highlighted the significant gap in value creation between the Bumiputera community and other communities, with more Bumiputera professionals relying on salaried jobs rather than starting their own businesses. He suggested the creation of privately run Bumiputera-based venture capital or private equity firms to spur interest in Bumiputera startups, as institutional investors tend to be risk-averse towards startups.
While only a third of Malaysian startups are currently profitable, the government is looking to support Bumiputera entrepreneurs through government investment companies rather than creating new venture capital firms. The ultimate goal of the project is to create a large Bumiputera entrepreneurial class by encouraging more individuals to start their own businesses and drive economic growth within the community.
The total venture capital investment in Malaysia has been steadily increasing, indicating a growing interest in supporting startups. Rafizi’s proposal aims to address the gap in value creation between Bumiputera entrepreneurs and other communities, ultimately fostering a more diverse and thriving economy.
