Startups in the MENA have proven to have very innovative and creative concepts that solve real-world problems, and many of them have left a positive impact on the societies they’re targeting, and some have even scaled up worldwide.
If you’re wondering about the costs associated with running a startup, well, it usually ranges from hiring a team, allocating a marketing budget, product development stages, spending on services and resources, which understandably can seem very overwhelming and costly.
Many startups continue to struggle in their initial stages and securing follow-up funding, but then again, the path to success is never easy. However, when you’re passionate and driven about your mission, rest assured; there will be people who support your efforts and invest.
Here are 7 ways to fund your startup:
Tell your future investors what your company is all about! Publish information about your startup on crowdfunding sites like Zoomaal, Bidayatech, Manafa. Next, different types of investors and contributors will read and evaluate your startup and ultimately invest in return for equity or privileges.
So what are the benefits? Firstly you can gain a global reach and exposure because of the “online” attribute. It also allows businesses to market to potential customers, by pitching the idea; this ultimately helps in developing a loyal customer base and will help determine the possible demand for the product/service without having to invest huge amounts in manufacturing and distribution!
2. Angel Investors
Also known as, individual investors who help fund startups. They are people with skills, expertise, and connections that can be valuable assets to the business. They offer a hands-on approach to the development of the startup, in return, they ask for equity in the business. Examples to look at in the MENA include Carthage Business Angels, Cairo Angels, and Tenmou.
In a nutshell, bootstrapping is fueling the growth of your business from cash flow produced by the business or from personal finances. If you love independence, then this will definitely work for you as it will allow you to keep 100% ownership and direction of your business.
The main downsides include limited visibility, many investors might hesitate to fund a startup until it has gained some traction which forces many startups to bootstrap at early stages. But don’t worry, learning to budget is a skill that will help you throughout your startup journey.
Accelerators as the name implies, help to accelerate the growth of startups.They assist with planning business strategies, provide funding, and assist in gaining customer acquisition. Some great examples to look at from the region would be Misk 500, Flat6Labs, OTF Techween, Oasis500. If your startup is hardware or IoT you might want to check out Brinc IoT.
5. Venture Capital
Startups that give, usually get support in return, much like the boomerang theory. Venture capital firms invest in startups in exchange for equity, or an ownership stake. They take on the risk of financing startups on the bet that some of the ones they invest in will bring a successful ROI. Notable VCs to look at in the region include Middle East Venture Partners (MEVP), Faith Capital, Algebra Ventures,500 startups, Plus Venture, Wamda Capital, Al Waha Fund of Funds
6. Government Initiatives
Many governments run great programs that fund startups and local entrepreneurs through grants, schemes, and loans with favorable terms. These initiatives are designed to help new startups that could one day contribute to national economic growth and leave a remarkable footprint.
The Egyptian government, for example, is investing in local startups through Egypt Ventures. In Saudi Arabia, around $1M has been given to the public investment fund with initiatives like Monshaat. In Bahrain, Ebdaa Bank, BDB, and our awesome partners, Tamkeen, also help fund local startup ventures.
7. Startup Competitions
Don’t we all have that competitive spirit? I bet you do. Startup competitions provide great opportunities to pitch your startup and go through a series of stages that ultimately lead to funding. This opportunity for startups can increase needed exposure and create useful connections to potential investors and experienced leaders.
With all these opportunities that startups can tap into, it’s best to evaluate the business scalability prospects and match that with the best initiative to take part in. Many benefits and challenges are present in each of the funding opportunities, but some may have greater opportunities for growth and exposure than others for your business.