The Kingdom of Saudi Arabia believes in the importance and role of startups in stimulating economic growth, and is keen to support them by providing investment opportunities through Vision 2030. This can be seen through facilitating their access to financing, enabling them to enter international partnerships, and ensuring a greater share of purchases in the local market.
This support was also demonstrated in the Startup Investment Forum (SIF) that was held over three days on February 21-23, 2022. Entrepreneurs had the chance to learn about the most successful innovative startups from Saudi Arabia and abroad, meet with investors, and explore the latest developments in the entrepreneurial environment. The event succeeded in attracting investors, providing investment opportunities, and identifying visions and ideas presented by the StartSmart conference, which was held in parallel with the forum.
Tips for securing funding for your startup
One of the first and biggest challenges you might face as a founder is to secure funding. Starting your business always requires a considerable amount of capital, and here we give you the most important tips on how to secure funding for your startup in the Kingdom:
1. Prepare a comprehensive business plan
You should know that understanding your business idea and exactly where you are headed is the best thing you can do to find funding. Investors want to be confident in your business idea. Therefore, this process of preparing a plan requires asking questions and laying out possibilities.
2. Speak the language of numbers
When it comes to funding and investing, numbers speak the loudest. Investors will focus on wanting to see a return on their investment and will need to be very confident in your business numbers when investing. Your business plan should include detailed information on actual and/or projected financial statements in order to build investors' confidence in the future of their investment.
3. Write down every amount you spend
When you seek funding, you are asking for money from investors, so it’s normal for them to have questions about spending details. You must be able to explain and justify each riyal of financing you request, and be as transparent as possible with all your expenses.
4. Be honest and realistic
Identify the weaknesses in your business and list them, and don’t be afraid to highlight the aspects which include some risks. You have to discuss these issues frankly with investors, and they may even help you in strengthening them.
5. Approach the right people at the right time
One of the keys to securing funding is knowing exactly where to look for money during each stage. Approaching big investors too soon will be a waste of time and may affect you negatively, as someone who doesn’t get the nature of business. Do your research about the appropriate sources of funding for the current stage of your business.
6. Read up on investors
It’s very important that you research stories and experiences of the investors you communicate with to understand why they are the best fit for your business. Understand what works for them and use this knowledge to interact with them in a positive way.
Entrepreneurs in Saudi Arabia should take advantage of the annual investment platform, and many other initiatives such as the “Rowad Package” initiative launched by the Saudi Data and Artificial Intelligence Authority “SDAIA” in cooperation with the General Authority for Small and Medium Enterprises “Monsha’at” and Elm Company, with the aim of supporting entrepreneurs from various sectors, companies and institutions emerging in Saudi Arabia. In addition to those, there are other entities that fund startups in certain fields, you just have to search for the most suitable one for you.
