If you are looking for an alternative investment to plain blue-chip stocks and vanilla index ETFs, or volatile Dubai real estate, venture capital investments may be an option.
Investing in startups involves buying stocks in a new company with high growth prospects, yet low or no profits and revenues.
Contrary to public equity (stock) markets, equity investments in startups are illiquid. Finding other investors to buy your private equity investment in a startup may be difficult as stocks are not publicly traded.
While risks are higher when investing in startups, so are returns.
So how do you find startups, particularly UAE-based startups, to invest in?
There are several ways you can connect with young Dubai and UAE startups:
Online platforms for startup investments
There are several online platforms that list startup investment opportunities, such as AngelList, Gust, and Seedrs. You can search for startups by industry, location, and funding stage. The main issue with these platforms is that they feature few if any UAE-based startups. The UAE is a small country of just 10mill inhabitants, and as of 2022 does not have a local startup investment platform.
AngelList: AngelList is an online platform that connects startups with accredited investors. The platform allows investors to browse startup investment opportunities, review business plans and financials, and invest directly in startups. AngelList also offers tools and resources to help startups with fundraising, hiring, and legal compliance.
Gust: Gust is a global platform that connects startups with accredited investors. The platform allows startups to create an online profile and share their business plan and financials with investors. Gust also provides tools and resources to help startups with fundraising, legal compliance, and investor relations. Investors can use Gust to discover and invest in startups, as well as manage their investment portfolios.
Seedrs: Seedrs is a crowdfunding platform that allows startups to raise equity funding from a large number of investors. The platform allows investors to invest as little as £10 in a startup, giving them access to investment opportunities that were previously only available to high net worth individuals. Seedrs also provides tools and resources to help startups with fundraising, legal compliance, and investor relations. The platform is an excellent opportunity for startups to gain exposure, secure funding, and form partnerships.
Conferences & exhibitions for startups
Attending startup events is an excellent way to meet entrepreneurs and discover new investment opportunities. Events like Dubai Startup Hub, STEP Conference, and GITEX Future Stars are some examples of events that can help you connect with startups in the UAE.
Dubai Startup Hub: The Dubai Startup Hub is an initiative by the Dubai Chamber of Commerce and Industry that aims to support entrepreneurs and startups in Dubai. The hub hosts several events and workshops throughout the year, including the Dubai Startup Hub Networking Series, where entrepreneurs can connect with investors, mentors, and other startup professionals. The hub also provides resources and mentorship to help startups grow and succeed.
STEP Conference: The STEP Conference is one of the largest startup events in the UAE, attracting entrepreneurs, investors, and startup enthusiasts from around the world. The event features keynote speakers, panel discussions, and workshops covering a range of topics related to startups, technology, and innovation. Attendees can also participate in pitch competitions, networking sessions, and startup exhibitions.
GITEX Future Stars: GITEX Future Stars is an annual startup conference and exhibition held in Dubai as part of the GITEX Technology Week. The event features over 750 startups from around the world, showcasing their innovative products and services. Attendees can also participate in pitch competitions, workshops, and networking sessions with investors, mentors, and other startup professionals. GITEX Future Stars is an excellent opportunity for startups to gain exposure, secure funding, and form partnerships.
UAE Demo Day: UAE Demo Day is a startup event held multiple times a year in Dubai and brings together entrepreneurs, investors, and startup enthusiasts. The event features pitches from a select group of promising startups, showcasing their innovative products and services to a panel of judges and a live audience. The startups selected to pitch at UAE Demo Day are typically early-stage companies with high growth potential.
Join a startup accelerator
Joining a startup accelerator can give you access to a network of startups and investors. Some accelerators in the UAE include Dubai Startup Hub, Techstars Dubai, and Dubai Future Accelerators.
Networking with other investors can help you discover new startup investment opportunities. You can join investor networks or attend investor events to meet other investors.
Techstars Hub71 Abu Dhabi: Techstars is a global startup accelerator program that provides mentorship, funding, and resources to startups. The Techstars Abu Dhabi program is specifically designed for startups in the Middle East and North Africa region, providing them with access to a network of mentors, investors, and other startup professionals. The program typically lasts for three months and includes intensive mentorship, workshops, and networking opportunities. At the end of the program, startups pitch to a group of investors and industry experts for the chance to secure funding and form partnerships.
Dubai Future Accelerators: The Dubai Future Accelerators is an initiative by the Dubai government that connects startups with government entities to address pressing challenges and opportunities in the city. The program brings together startups, entrepreneurs, and government officials to collaborate on projects related to sectors such as transportation, healthcare, energy, and education. Startups selected for the program receive funding, mentorship, and resources to develop and implement their solutions. The program typically lasts for three months and includes access to state-of-the-art facilities and resources in Dubai. At the end of the program, startups have the opportunity to form partnerships with government entities and scale their solutions in the region.
Seek referrals from trusted sources
Reach out to friends, family, or colleagues who may have invested in startups or know entrepreneurs who are seeking funding.
Our team here at The Dubai Navigator regularly attends many of the startup events in the UAE and we are in close contact with many local startups. If you are interested, we can support you in building connections, finding suitable investment opportunities with preferential terms, and support you in setting up tax-optimized asset-holding structures to protect your investment(s).
Conclusion
Remember, investing in startups is a high-risk, high-reward game. It is important to conduct thorough due diligence before investing in any startup and seek professional advice from financial advisors and attorneys.
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