The importance of attracting investors for Startups in Dubai:
Dubai is the Mecca of Startups and Entrepreneurs from across the world. Every year, hundreds and thousands of innovators flock to this magnificent Emirate in the hope of giving their ideas the perfect launch pad. But as with every great idea, the difference between massive success and abject failure is early-stage funding.
When an entrepreneur begins the process of converting an idea into a full-fledged and sustainable business proposition, Finance immediately becomes the primary lifeblood. Today’s markets are globalized and highly competitive and Dubai is no different. Everything from registering the company to procuring the right licenses and permits and managing day-to-day operations requires an initial influx of funds and if a startup lacks these resources, it is destined to crumble under the weight of its own overheads.
In such situations, most Startups rely on external funds that are pumped into the company by one or more investors – against a predefined share of the company’s equity. Depending on the stage at which the Startup finds itself at and the scale and scope of the product or service that it is attempting to jump start, the investors might range from Seed/Angel Investors to Venture Capitalists to even Large Investment Houses. However, expecting someone else to attempt a risky “business takeoff” with you – whilst using their money is easier said than done. This is also why most of the early-stage Startups struggle to get their initial rounds of investments going.
This is where employing the services of a top-notch Auditing Firm in Dubai can be vital for early-stage startups.
Even though most Startups and Entrepreneurs might scoff at the idea of onboarding the services of an Auditing Firm at the very start of their journey, doing so can more than offset the cost of taking on these services. An Auditing Firm can provide invaluable support and guidance for early-stage Startups in securing their initial investments and getting their business off the ground:
1. An accurate audit report that is error-free and vetted by a reputable ‘Third Party’ goes a long way in convincing investors about the seriousness of the Startup Initiative:
An Auditing Firm at its very core is responsible for carrying out financial assessments and audits and creating detailed reports for all of the stakeholders. If an early-stage Startup is able to provide investors with a complete picture of its financial health – courtesy of an Auditing Firm, investors get a good idea of the viability of investing in it.
2. An Auditing Firm’s report is based on Facts and Evidence and not Emotions:
Every Startup at its very core is an idea held on to very passionately by its inventor. This is why when most startups approach investor pools to raise much-needed Working Capital, their pitch is based more on emotions than evidence. This is where an Auditing Firm can help. It can provide much-needed evidence that is fact-based and that adds valuable ‘meat’ to the ‘bones’ of the startup and thus convince investors.
3. Risk Assessment is very crucial to an Investor’s decision to invest:
For any investor, the ultimate business challenge is to achieve a fine balance between potential risk and promised reward. While active investors in Dubai might be constantly in search of opportunities to invest their surplus funds, the onus still falls on the Startup or Entrepreneur to prove that theirs is an offer that is ‘too hot to resist’. Auditing Firms prove invaluable at this stage, as they are able to provide details regarding the types of transactions that the startup might have engaged in and the degrees of risk involved in the business. This is crucial to the investor’s decision. Audit reports prepared by the audit firms in Dubai highlight the profits that the firm is capable of earning – something that the investor relies on to ascertain the potential returns he/she might make
4. A Startup that meets all its compliance requirements is very lucrative for a potential investor:
Every year, there are numerous Financial and Tax related regulations are announced by the Dubai Government that every firm operating within the jurisdiction has to comply with. In addition, startups much like established firms also have to meet existing standard compliances on an annual basis. Auditing firms with their in-depth knowledge and skilled experts can ensure the fulfillment of these requirements, allowing the startup to focus on its primary goal of setting up its business. A startup that meets all of its compliance requirements is also incredibly alluring to potential investors.
5. An Auditing Firm working with a Startup promises transparency and trustworthiness:
One of the big challenges for any investor is that once he commits the money to a startup, he becomes a part of that company – inheriting all of its assets and liabilities. An Auditing Firm can provide much-needed transparency to the investor and adds several layers of trustworthiness to the entire enterprise. Auditors dig deep into the firm’s operations and create a summary report regarding its work and detect if all the operations are performed wisely.