Some Fundraising Essentials For Startup Businesses In The UAE
If you are a budding and prospective entrepreneur in the UAE who is considering setting up a brand new business, there is a gap that you will have to fill, when it comes to fundraising. Sure, you could raise seed capital by borrowing money from your family and friends, which might be adequate at an early stage but will not be enough later on. Eventually, you will have to consider other funding sources too, such as banks, fundraising websites, private investors and venture capitalist companies.
No doubt, your family and friends likely find your idea quite intriguing, but they will probably not risk large amounts of cash in your business venture. Unfortunately, unless your business setup in UAE has been generating stable and steady cash flows, you will not be able to borrow funding from a bank. Similarly, if you are aiming for a technology startup, you will have a hard time convincing private investors who do not prefer investing in such businesses due to their lack of know-how. If your startup business is not at least a few months old, you may not even be able to borrow from venture capitalist companies.
So, how can you increase your chances of being able to effectively raise funds for a startup business that you have just set up or are planning to?
Is Your Venture Worth Investing In?
Indeed, the demand for new business startups in the UAE is quite high, but there are also distinct challenges that have to be dealt with. Your business should be relevant to the consumers of the city where you intend to set it up so they may easily accept and adopt it. It should also be such that you may easily expand or upgrade it based on the demand and needs of your local consumers.
If your business has not been set up yet, make sure the idea of your startup will work in the UAE. Just because an idea works in the UK or the US does not mean it will work in the Middle East. These steps will not only help you ensure that your business starts generating revenue but will even aid you in luring in potential investors.
Does Your Venture Have A Solid Management Team?
Unless you are able to execute a business idea effectively and successfully, it will be worthless, and you cannot fathom to achieve this on your own. Investors do not merely invest in the idea of a company setup Dubai or anywhere else in the UAE; they invest in the team working behind the scenes. Hence, if you really want to persuade prospective investors, make sure your management team is proficient and has a proven track record. Investors should see you and your management team as hardworking individuals who are capable of selling not just products or services, but even the idea behind and the vision of your startup business.
Is Your Venture Well-Structured?
Another thing that investors are likely to take note of is whether or not you have properly incorporated. There are plenty of regulations that your startup will have to adhere to, which is something you should take into consideration. You will also have to implement corporate governance and ensure that it is well-structured. This will show investors that you well-organized, with a focus on every minute detail. Before approaching investors, you may even want to seek out a professional independent consultancy to offer you some advice and guidance.
Conclusion
The operating conditions for startup businesses in the major cities in the UAE, such as Abu Dhabi, Dubai, and Sharjah, are really well-organized without being too imposing. However, there are several fees that have to be paid, such as Ministry of Economy fee, Trade license fee, Commercial Licence fee, etc., unless a business is set up in one of the free zones. Even then, funding is paramount. So keeping all of the above in mind can make your startup business venture more attractive to prospective investors.