Small businesses tired of having their funding requests rejected by regional banks should turn to the wisdom of crowds, and seek to raise money they need to succeed from friends and supporters online
That was the message from the creators of a new web platform officially launched in Dubai on Tuesday as they seek to bring the global craze of crowd-funding to the Middle East.
Former DIFC chief economist Nasser Saidi is among the backers of Eureeca, a high-profile new venture that allows existing businesses to pitch for funding online.
And according to its creators at least, it's an idea that the region has been waiting for.
"Any business, large or small is going to find it very difficult to grow without access to capital," the site's CEO Chris Thomas said at Tuesday's launch at The Capital Club in Dubai.
"Where do you raise that? There are very few places to do that these days. The banks are not lending. They have pretty much shut their doors to SMEs." Many will know the US phenomenon Kickstarter - a website that solicits donations from users to help bring projects to life.
Last month Zach Braff, former star of TV show 'Scrubs', raised $2 million in three days to fund his next movie.
But while supporters of such projects can expect a modest token of thanks like a T-shirt, the founders of Eureeca say their site is about crowd-investing - and a share of the business itself. Small firms get the money, and investors get something more exciting than "the standard, boring, non-performing investments that are currently offered to them," Thomas said.
Former DIFC executive Saidi, said being so closely involved in a the success of a small business would be far more satisfying than parking funds in a featureless fund or major company. Firms using the site are asked to pitch their expansion plans and how much funding they need. They have 90 days to raise the total. If they don't, they get nothing.
But, added Saidi, "if you manage to convince people to come in - there is a good deal of satisfaction in doing that". Attracting funds on an idea's merits beats tapping family or friends for money, he said, and you don't risk a personal relationship going sour.
"The real test for a business is: are you able to convince other people to invest with you?" he explained.
© 7Days 2013
