Raising Capitals For Start-Ups in UAE

One of the biggest challenges to establishing a business anywhere in the world is the initial funding, capital, or investment. It becomes difficult if you don’t have sufficient funds to raise a startup. An approach to an external source of finance is challenging since the startups lack track records. However, the UAE has built an advantageous domain for start-ups over the last few years and this led to gradual growth in activities in bootstrapping, crowdfunding, angel investment, venture capital space, etc. UAE government is encouraging and financially supporting potential start-ups, and small and medium entrepreneurs (SMEs). There are several ways to fund a startup in UAE. These are; local funding and outreach program, angel investor, bootstrapping, venture capitalists, institutional investors, and business incubators. If you need any legal assistance you can reach out to the corporate lawyers in UAE.

 

Local Funding and Outreach Program

The UAE government is encouraging and financially supporting native enterprises closely held by the UAE citizens. The Khalifa Fund for Enterprise Development is the organization that funds the start-ups held by UAE nationals. The institution of the Khalifa Fund for Enterprise Development (KFED) was proclaimed by the President of the UAE and the ruler of Abu Dhabi H. H. Sheikh Khalifa bin Zayed Al Nahyan. This fund offers funding for native investors, entrepreneurs, and SMEs within the UAE. This program aims to market entrepreneurship and investment within the country and additionally aims to boost the national economic system in a variety of sectors. Dubai SME is another enterprise taken by the government to financially support the SMEs. Dubai SME is an agency under the Department of Economic Development. This agency offered finance moreover as alternative supporting services to start-ups and established SMEs.

 

Angel investors

Angel investors generally are high-net-worth individuals who invest in start-ups in their early stages in exchange for an equity share. This is one of the finest ways to get the fund quickly. However, it is difficult to search out the right angel capitalist as this needs in-depth knowledge about the reputed angel capitalist and collaboration with such investors within the country. Some of the well-known angel investor networks in the UAE are Dubai Angel Investor Network, the Women’s Angel Investor Network, and the Falcon Network.

 

Venture Capital

Venture Capitalist is another supply of potential funding for start-ups within the UAE. These non-public equities invest an oversized amount of money in start-ups and SMEs despite the risks concerned. This act of venture capitalism aims to achieve an enormous quantity out of the start-ups they supported if their business has self-made within the future. Venture Capital investors will be private, corporations or investment banks. UAE encourages foreign investment as a segment of economic development and foreign Venture Capitalists can fund the start-ups operating within the UAE.

 

Bootstrapping

The majority of the start-ups in the UAE are likely to be bootstrapped, which means the promoters of the business finance the company with personal funds or with funds from family or friends. They don’t have any external supply to finance. To lift funds, you can sell your merchandise within the market and the initial revenue coming from it will be used to finance the company.

 

Institutional investors

Another option to raise funds for start-ups is getting loans from institutional investors. Institutional investors invest funds on behalf of their clients. Mutual funds, insurance companies, etc. are some examples of institutional investors. However, banks are the most distinguished type of institutional investor. Greenstone Equity Partners and Gulf capitals are well-known institutional investors within the UAE. Institutional investors have the access to the funds of others and they invest these funds in different projects.

 

Business Incubators

Business incubators are organizations that provide numerous packages and facilities to start-ups and entrepreneurs rather than providing funds. And these packages and facilities would be a money profit for start-ups in the end. Some of the well-known business incubators in the UAE are Dubai Future Accelerators, In5, Dubai Technology Entrepreneur Centre, Hub71, TechStars Dubai, Fintech Hive, Astrolabs, and Turn8. Business Incubators offers full support to start-ups from market launching to promotion and financing.