AC­CESS TO FUND­ING

FIG­URE 6. SOURCE OF TECH STARTUP FUND­ING

Arabnet - The Quarterly - - Entrepreneurship -

Aside from an­gel net­works, tech star­tups in Saudi Ara­bia re­main mainly de­pen­dent on non-eq­uity fund­ing, whereas over half de­pend on per­sonal savings (56%). Saudi Ara­bian tech star­tups are not lever­ag­ing their ac­cess to eq­uity fund­ing and ap­prox­i­mately one out of ev­ery ten star­tups are de­pen­dent on non-eq­uity sources, such as com­pe­ti­tions (11%) and bank loans (11%). When it comes to eq­uity fund­ing, one fourth are an­gel net­works, which is by far the most pop­u­lar venue for fi­nanc­ing (24%). Mean­while, one out of ev­ery ten star­tups ac­cess ac­cel­er­a­tors (11%) as a source of eq­uity fund­ing. These find­ings re­flect, first, the chal­lenge of rais­ing eq­uity in Saudi Ara­bia and, sec­ond, a pos­si­ble cul­tural as­pect of be­ing ac­cus­tomed and more fa­mil­iar with non-eq­uity sources. This is a clear mar­ket op­por­tu­nity for both ac­cel­er­a­tors and ven­ture cap­i­tal funds.

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