Alum Co-founds New Real Estate Investment Firm
BY KARIMA RAGAB
![Mohamed Istanbouli (left) and Ramy Khorshed (right), two of KBI’s founders [Ragab]](http://www.auccaravan.com/wp-content/uploads/2015/05/IMG_2851-copy-e1430597962910.jpg)
[Ragab]
Two new graduates and an undergraduate student majoring in economics have amassed a current portfolio value of EGP 4.5 million in total investment funding for their real estate company KBI Ventures, which they launched in December.
AUC alumnus Mohamed Akram Istanbouli, Duke University alumnus Ramy Khorshed, and Mohamed Barakat, a New York University (NYU) undergraduate established their real estate company last summer with the aim of changing the process of investment in Egypt.
KBI Ventures allows the investor to own a piece of a company that already owns many properties.“Conceptually, the idea does not exist in Egypt,” said Istanbouli.
“We stepped into a gap in the market … when we wanted to invest our own money,” added Khorshed.
One feature that sets them apart from other firms is that they gain investor confidence by guaranteeing a return.
“I will not take any fees until the 12 percent generated return is achieved,” Khorshed went on.
“That’s a risk because I will put a lot of time and effort in something that might not benefit me at the end,” added Istanbouli.
Istanbouli and Khorshed found that Egyptians prefer to invest in the real estate sector because it is more likely to generate profit.
One of the key issues they faced was that their start-up appeared to operate using informal financial investments, which are illegal in Egypt when done by non-licenced firms or institutions.
“Our idea sounded a lot like [informal financial investments] and that’s completely illegal,” said Khorshed. “We needed to structure it in a certain way and go through a lot of legal procedures that took a lot of time,” he continued.
They also faced an obstacle in the lack of transparency in Egyptian accounting laws. “There isn’t a website I can go on to access information about the laws in Egypt,” Khorshed explained.
KBI Ventures is also looking for volunteers to help them get the word out to raise funds; the founders said the volunteers would receive a commission.
“We will give them training in order for them to pitch our idea to the potential investor,” said Khorshed.
Each of the three founders has attributed his success to invaluable work experience during and after graduation.
“I can’t stress enough on how important work experience is,” said Khorshed. “It allowed us to have a mature view on what we are doing right now.”
The founders were able to collect the initial amount of money from family and friends who trusted them and invested their money in KBI Ventures.
“We are trying to expand our circle to reach people who don’t know us and establish a level of credibility,” explained Khorshed
