Startups face many different challenges. However, finding a way to obtain working capital is one of the most important and most stressful. Whether you are trying to get your business out of the starting blocks or looking to enter into a new period of growth, you will find that funding your startup can take a lot of time and effort.
Entrepreneurs in the Middle East can alleviate some of the difficulty finding capital for their startup by turning to one of the many sources of funding available to them. From crowdfunding platforms to one of the region’s many accelerators, here are a few of the best ways to fund your startup in the Middle East:
The majority of entrepreneurs in the Middle East turn to venture capital (VC) when funding their startups. In recent years, the region has seen an influx of venture capitalists that are looking to support the growth of startups of all kinds.
Wamda Capital is the most prolific of all VC firms in the region. It focuses primarily on budding technology startups. Headquartered in Dubai, this firm offers support to startups in both the seed and growth stages. Wamda facilitates several funding rounds before navigating its startups towards a successful exit.
Another of the Arab region’s biggest VC firms is Middle East Venture Partners, which supports early and growth-stage businesses. This entity is unique in that its leadership team is comprised of entrepreneurs, who offer an array of funding options to startups.
You can also turn to the peer-to-peer funding strategy known as crowdfunding to obtain capital for your startup. Unlike other types of funding, you do not need to go through a financial institution to obtain money via crowdfunding. There are numerous crowdfunding entities in the Middle East, each of which caters to different funding needs.
Eureeca is one such platform. It can connect your startup to a vast network of potential investors ranging from individuals to companies. Based in the UK with an office located in Dubai, this entity allows members of its network to invest in your startup by purchasing shares. The money you receive will act as working capital for your various operational needs.
The Middle East is also home to Zoomaal, a unique crowdfunding platform that allows you to raise money for your startup online. On this site, you can create a submission page for your startup and garner support from other users. Friends and strangers alike can provide funding for your startup. In return, you can post updates on your Zoomaal page to help your supporters see where their money is going.
It is fairly common for entrepreneurs to fund their startups on their own. You shouldn’t overlook this option when financing your own business. When your startup is in its earliest stages, you should consider investing up to 20 percent of your savings. Any more than this and the potential risks will outweigh the benefits.
You can also turn to your friends and family when funding your startup in its pre-seed stage. However, you shouldn’t let business interfere with your personal relationships. It is important that you treat your funding partnerships with the utmost transparency.
The Middle East is home to a plethora of angel investors. They will help fund your startup in return for some level of ownership or convertible debt. Across the region, you can find both individual investors and angel firms that will support your business.
To find the right partnership, you can turn to such entities as the Angel Investment Network. This organization helps connect angel investors with startups that are looking to raise money.
The Middle East has become known for its network of startup accelerators. These entities provide opportunities for investment, training, mentorship, and more.
Oasis 500 is an accelerator that serves the needs of technology startups. Participating startups receive a seed investment of $14,000 USD. They also have the opportunity to pitch their business ideas to other potential investors.
Each accelerator offers its own level of financial support to startups. Some programs, such as Berytech and Twofour54’s Ibtikar Creative Lab, regularly make investments worth several million dollars. Whatever acceleration program you select for your startup, you will gain access to both funding and vital operational assistance.
Numerous banks in the Middle East have loans that are ideal for startups, offering attractive interest rates for young businesses. You should check with both your current banking institution and other local banks to find the best loan options for your startup’s needs.
Depending on your situation, you can obtain loans with repayment plans at intervals of several months or two years. Some banks even have their own startup funds, so you can also investigate those.
Within the thriving Arab startup ecosystem are numerous events and competitions. These help local entrepreneurs obtain funding for their businesses while marketing their brands to a wide audience.
From the Sharjah Entrepreneurship Festival to the TechCrunch Startup Battlefield, these events award varying sums of prize money to budding entrepreneurs. Startup competitions will also open the door to new professional connections and additional investment opportunities.