An evaluation of angel investment practices and supportive models operating within participation banking in Turkey in terms of purpose and effectiveness

This study aims to evaluate the venture capital practices realized within participation banking in Turkey and the effectiveness of the models supporting these practices. Within the scope of the research, the venture capital ecosystem is analyzed within the framework of interest-free, risk-sharing and real economy-oriented approaches, which are the basic principles of participation banking. The study, which was conducted through literature review and case study analysis methods, examined the contributions of participation banks to the venture capital ecosystem and the problems encountered in this field. The findings show that Islamic finance models such as mudaraba and musharakah offer ethical and sustainable solutions for entrepreneurs while providing access to financing without borrowing. However, it has been determined that the short-term deposit structures of participation banks are insufficient to meet the long-term financing needs required for venture capital investments. The study also emphasized the positive effects of models such as angel investing, incubation centers and accelerator programs that support venture capital practices on the ecosystem. As a result, it is suggested that for participation banking to play a more effective role in venture capital, long-term financing structures should be developed and integration with supportive models should be increased. This study reveals the potential of participation banking in the venture capital ecosystem and offers strategic recommendations to contribute to sustainable development.