Startup funding: entrepreneurs doing their bit, investors not


Entrepreneurs in emerging markets make as much personal investments into their startups as those in high-income countries, but there external investment funds flow less freely in emerging regions, according to research by the Global Accelerator Learning Initiative (GALI).

GALI analysed data and interviews focused on entrepreneurs across both high-income countries and emerging markets, with a view to distilling any differences between the two entrepreneur groups.

The research found emerging market entrepreneurs are just as confident about their commercial prospects as high-income region-based entrepreneurs, and as such invest similar amounts of their own funds into their ventures.

In addition, the report found contrary to suggestions there is a disparity between the education and experience of emerging market entrepreneurs as compared to their high-income country-based counterparts, “emerging market entrepreneurs have more-than-adequate educational experience and technical competence”.

However, emerging market entrepreneurs proved less likely to mention getting acquired as a specific aspiration.

“This diminished focus on scaling-to-exit may contribute to investor perceptions of lower entrepreneurial ability and commitment,” GALI said.

While entrepreneurs in emerging markets are putting up their own funds to support their businesses, GALI found emerging markets have less local equity investment, including fewer local investors and less-developed networks connecting investors to potential investments.

This is an area where accelerator programmes come into their own.

In high-income regions, the research found entrepreneurs are able to attract twice as much early stage investment than those operating in emerging markets, prior to joining any accelerator programme.

In emerging markets, programme managers play an important role in facilitating deals with investors who live and work outside the given country.

Recruiting external investors to emerging market accelerators is an area programme managers reported as posing a challenge.

The research concludes it is more difficult to secure investment in emerging markets, and recommends that rectifying the imbalance between the promise of emerging market entrepreneurs and investment outcomes should be a priority for entrepreneur and investor communities.


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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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