Despite these strict rules, there are financial instruments that are permitted and in which Islamic funds actively invest. The most simple of such agents are equity securities issued by businesses not engaged in prohibited activities. They comply with the principle of risk-sharing and no speculation in a very straightforward way.
Another example is Islamic bonds, the so-called Sukuk. The payments to Sukuk holders depend on the company's financial performance, and at a fixed point in time, the securities are redeemed. Sukuk may be thought of as redeemable non-voting shares with a 1x non-participating liquidation preference. The last condition considers the fact that upon liquidation, bondholders are paid before shareholders, and the amount of the payment corresponds to the body of the debt. If the term "liquidation preference" is confusing to you, please see our video “How venture capital harms startups? | Choose security token offering or equity crowdfunding instead