Ways to Support Startups in the UAE
If you’ve ever listened to an entrepreneur talking about the story of how they got where they are, the most exciting parts of that story will invariably be the parts about securing funding for their business. This is especially true in 2019 where a distinct lack of venture capital and high interest rates on bank loans make for some seemingly insurmountable hurdles for potential entrepreneurs. This can be a serious problem, as securing the initial funding is always the most crucial part in the genesis of a startup.
The most obvious solution is obviously to try and kickstart your business yourself. If you’re someone who has lived in the region for a long time, you’re likely to have saved up some capital that could give you a head start. This, of course depends on the potential scope and cost of your business but essentially if you have enough savings on your account, you’re good to go.
In the instance that you don’t have enough savings to fund your business, the UAE offers a fairly diverse range of options for startups and small businesses to fund themselves, with varying levels of accessibility and complexity. Here are a few of the options that potential small business owners could look into:
1. Crowdfunding: Also, sometimes taking form of peer-to-peer funding, is essentially a way to meet people interested in investing in your business, allowing you to borrow and lend money without having to go through a bank. Platforms like ours, is a great way to start! We connect businesses directly with potential investors. And in the UAE, we are the first Equity Crowdfunding platform operator fully-authorised by the Dubai Financial Services Authority (DFSA), providing easy access to high-potential deal-flows for investors.
2. Incubators: Dubai offers several spaces where entrepreneurs can get access to investment, training, and assistance. Dubai-based incubators offer paid services as well as funds that can help one set up their business without worrying about the initial investment. You can find a list of incubators and accelerators here.
3. Angel Investors: In the last few years, Dubai has seen a surge in its entrepreneurial ecosystem, which in turn has given rise to multiple angel investors — a person or company that provides capital for a startup in exchange for ownership equity or convertible debt. Ranging from individuals to companies both large and small, there are a number of angel investors in Dubai, that can be found on FundedByMe’s website. For women entrepreneurs, there are even investors that focus on women-led startups, like Women’s Angel Investor Network (WAIN) and WOMENA.
4. Bank Loans: Most local banks offer startup funding options in addition to regular startup loans. The Mohammed Bin Rashid Innovation Fund (MBRIF) was created in February 2019, as an initiative by the Ministry of Finance, operated by Emirates Development Bank to offer direct, Sharia-compliant loans to select recipients. Additionally, all major banks in the UAE offer good loan options for startups and entrepreneurs. If you already have a running account at a bank here, that bank is more likely than not to provide you with a variety of options to fund your small business, allowing you to pay back with flexible installment plans spanning anywhere between a few months to two years.
