“YOU NEED TO KNOW WHEN TO ASK THE RIGHT AMOUNT OF CASH THAT YOU ACTUALLY NEED WITHIN YOUR FIRST YEAR BEFORE YOU BURN OUT, AND BEFORE YOU BURN OUT, YOU NEED TO BE READY WITH RAISING OTHER ROUNDS OF FUNDING.” economy changes- commending Bahrain’s progress as it stems from a grassroots level of starting with raising awareness in schools. To give an example, Al Shakar explains how back then, if you were in school and wanted to start a business, it might have been confusing, but now, there’s a range of choices to make- from accelerators, to hackathons and gaming challenges. “As the ecosystem changes, all the elements also change, [so we] make sure we are also in sync and in line with the startups,” says Al Shakar. This has also been a focus for UNIDO-ITPO Bahrain, according to Afif Barhoumi, Program Coordinator, Arab International Center for Entrepreneurship and Investment. Their entrepreneurship program originally started in Bahrain in 1999 and is now implemented in 52 countries, and Barhoumi stresses how they worked towards altering the attitude towards entrepreneurship among Arab nations and families. Particularly, they implemented programs in schools (and in Bahrain since 2005) to encourage the minds of young enterprising innovators, hosting programming competitions and events to foster entrepreneurial aspirations. However, perhaps unsurprisingly, funding remains a constant issue. Esam Hammad, Acting Executive Director of Customer
Engagement at Tamkeen, whose department manages partnerships with local and international entities in the business community, says that part of their business support is easing the access to financing for SMEs in Bahrain. Hammad addresses the barriers early-stage startups face in acquiring commercial loans due to the risk factor of such enterprises. He explains Tamkeen’s financing program which has “subsidized the interest on behalf of the startup, so they end up paying a lower interest on the loan and guarantee part of that loan. We give 50% of the collateral against the loan to the bank.” This has proved to be a success as due to the finance scheme, their portfolio has been able to reach around $1 billion in the last 10 years. As for startups’ issues with funding, Al Shakar advises that a common mistake of young startups is not managing cash properly after receiving funding, which affects a funding, affecting a startup’s burn out rate. “You need to know when to ask the right amount of cash that you actually need within your first year before you burn
Hasan Haider, Partner, 500 Startups
out, and before you burn out, you need to be ready with raising other rounds of funding.” Hasan Haider, Partner at 500 Startups, adds that new ‘treps should be mindful of wasting money, and not putting the right resources in the right place. From a startup founder’s perspective, Aljouf, who’s already had nine companies, advises, “You need to talk in the way that investors would understand you,” meaning that they need to see your startup’s growth and market viability. It’s worthy to note Bahrain’s inclusiveness, not only to Bahrain-based startups, but also entrepreneurs who wish to have access to Bahrain’s market, whether through expanding or starting a new
enterprise in the country. Indeed, Saad asserts that as part of FinTech Bay’s mandate to push the industry ahead, besides Bahrain-based enterprises, they’re open to startups who want to launch in Bahrain or expand to Bahrain, whether they’re from the region or internationally. This also echoes the inclusiveness of Rowad Program, which Al Shakar says, as an online platform opens its resources to anyone. Haider says that besides the relatively low cost of operating a business in the Kingdom (compared to its GCC counterparts), Bahrain offers 100% foreign ownership, all the while acting as an interesting bridge to the Saudi Arabia market- a striking attractive opportunity for >>>
A panel discussion at Unbound Bahrain
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