Genny Ghanimeh, Founder of Mind Cloud Academy and Mind Cloud Tribe.
The economy is measured though GDP, personal income and employment. A good economy needs infrastructure, education, and governance, among other things, to survive.
Some of the drivers of economic growth are: SMEs (which constitutes around 70 percent to 90 percent of all companies in any economy), innovation (which insures more production of value in products or services at a lower cost), and definitely more job creation. That is why entrepreneurship, and supporting entrepreneurship is extremely important for any good growing economy. Entrepreneurs innovate new ideas, test them, create new companies and in turn, create new jobs. In the MENA region, and in the UAE in particular, funding is available to revenue generating start-ups but not much is available at pre-seed and seed stage: Crowdfunding is one of the solutions to resolve this issue.
What are the different models of crowdfunding?
Crowdfunding is the practise of funding a project or venture by raising small amounts of money through a large group of people. Some successful models are peer-to-peer lending, equity crowdfunding, rewards-based crowdfunding and debt-securities crowdfunding.
Crowdfunding improves democratisation of access to funding; it is a great alternative way to fund a new passion project or venture. Starting anything new is always very risky and often very daunting, not just when it comes to fund but to the possible expenses along the way. From the outset you get validation and support of your new venture from the people that know best. This support avoids mistakes in the early days and a strong strategy from the outset.
Crowdfunding also makes way for a new class of angel investors who are educated and come with a new level of support when most investors are not prepared to back or provide capital for a new start-up. Many crowdfunding campaigns include access to social media, public relations and marketing which increases the reach across numerous channels more quickly than a self-started venture.
There are a few challenges that come with crowdfunding, mostly with a weakness in due diligence on the start-ups, and low accountability from the entrepreneurs to follow up on the promises to deliver either their rewards or information on progress. It is very important to have clear structure and communication from the outset.
When it comes to the GCC market there is a lot that can be done to encourage this type of crowdfunding initiative. Due diligence is the most important step when it comes to crowdfunding platforms, and following up on progress made throughout the process is also crucial. There are platforms in place for crowdfunding models that are based on peer-to-peer lending and crowdsourcing-equity model, but not enough in place for reward-based models.
The GCC is the perfect place for continued education and upskilling of new entrepreneurs along with the formation of new angel investors and incentivisation to invest in new start-ups to support new homegrown venture.
Genny Ghanimeh, Founder of Mind Cloud Academy and Mind Cloud Tribe.
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By ITP
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Crowdfunding as a vehicle for a good economy
Crowdfunding improves democratisation of access to funding; it is a great alternative way to fund a new passion project or venture
Genny Ghanimeh, Founder of Mind Cloud Academy and Mind Cloud Tribe.
The economy is measured though GDP, personal income and employment. A good economy needs infrastructure, education, and governance, among other things, to survive.
Some of the drivers of economic growth are: SMEs (which constitutes around 70 percent to 90 percent of all companies in any economy), innovation (which insures more production of value in products or services at a lower cost), and definitely more job creation. That is why entrepreneurship, and supporting entrepreneurship is extremely important for any good growing economy. Entrepreneurs innovate new ideas, test them, create new companies and in turn, create new jobs. In the MENA region, and in the UAE in particular, funding is available to revenue generating start-ups but not much is available at pre-seed and seed stage: Crowdfunding is one of the solutions to resolve this issue.
What are the different models of crowdfunding?
Crowdfunding is the practise of funding a project or venture by raising small amounts of money through a large group of people. Some successful models are peer-to-peer lending, equity crowdfunding, rewards-based crowdfunding and debt-securities crowdfunding.
Crowdfunding improves democratisation of access to funding; it is a great alternative way to fund a new passion project or venture. Starting anything new is always very risky and often very daunting, not just when it comes to fund but to the possible expenses along the way. From the outset you get validation and support of your new venture from the people that know best. This support avoids mistakes in the early days and a strong strategy from the outset.
Crowdfunding also makes way for a new class of angel investors who are educated and come with a new level of support when most investors are not prepared to back or provide capital for a new start-up. Many crowdfunding campaigns include access to social media, public relations and marketing which increases the reach across numerous channels more quickly than a self-started venture.
There are a few challenges that come with crowdfunding, mostly with a weakness in due diligence on the start-ups, and low accountability from the entrepreneurs to follow up on the promises to deliver either their rewards or information on progress. It is very important to have clear structure and communication from the outset.
When it comes to the GCC market there is a lot that can be done to encourage this type of crowdfunding initiative. Due diligence is the most important step when it comes to crowdfunding platforms, and following up on progress made throughout the process is also crucial. There are platforms in place for crowdfunding models that are based on peer-to-peer lending and crowdsourcing-equity model, but not enough in place for reward-based models.
The GCC is the perfect place for continued education and upskilling of new entrepreneurs along with the formation of new angel investors and incentivisation to invest in new start-ups to support new homegrown venture.
Genny Ghanimeh, Founder of Mind Cloud Academy and Mind Cloud Tribe.
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