Is it your idea or your industry?
We often come across entrepreneurs who have a business idea they wish to execute whether it’s something they had read about or see an existing business and think it’s something they would like to run. However when it comes to execution and even fundraising from various local and regional angel investors, venture capitalists or existing business startup funds they are often rejected. At times it’s related to lack of team knowledge, lack of proper financial planning and modeling or even market entry; but it can sometimes go beyond your idea or your plans, sometimes it’s just the industry.
Despite having a proven business model, the team and the technology, it can be difficult to get funded, so we have made a list of various industries we have seen our past clients fail to receive funding due to the following industry reasons.
In the part we have worked with clients who have successfully received funding from various local funds such as Khalifa Fund, as well as notable angel investors and VCs; however this is not about them, this is about the others who have failed to receive funding for various reasons.
We compiled a list of reasons for their rejections before they came to us. At their heart one can see it is a lack of innovation or original concepts that is often a criteria for business ideas to become funded. The vision plays a large role.
|Traditional Activity||Reason for Not Receiving Funding|
|ADMIN & MANAGEMENT SERVICES|
|Recruitment services, PRO services and labor office services.||Ordinary business & Saturated Market|
|HEALTH AND WELLNESS|
|Health Clubs, GYM, Saloons & Spa||Ordinary business & Saturated market.|
|Health services (like hospitals, labs & pharmacies)||Dominated by authorities, high investment and Restricted regulations (HAAD, MOH)|
|CLEANING, MAINTENANCE, TRANSPORT & GENERAL SERVICES|
|Automotive Repair||Ordinary business & Saturated Market|
|Laundry & Dry Cleaning Services||Ordinary business & Saturated Market|
|Transportation & Cargo Services, Automobile recovery services||Ordinary business, high competition and dominated by large players|
|Cleaning services, general and building maintenance||High Competition, Labor Intensive, Ordinary Business and Saturated Market|
|MARKETING, PUBLISHING & MEDIA SERVICES|
|TV & Radio channels, media related programs productions||Lots of competition & High Investment – most are financially not feasible|
|Newspaper, magazine and books – printing, publishing or distribution||Lots of competition & High Investment – most are financially not feasible|
|FINANCE, LEASING & INSURANCE|
|Finance, lease, insurance and related brokerage||High Capital Requirements|
|Loan collection services, auction services||High Risk|
|AGRICULTURE, FOOD & BEVERAGE|
|Open field agriculture and traditional green house||High Capital Requirements for Scale|
|Regular restaurant with shisha and cafeteria||High competition and ordinary business|
|TRAVEL & TOURISM|
|Travel Agency||Ordinary Business & Saturated Market|
|Cars and motorbike rental and leasing||Ordinary Business & Saturated Market|
|REAL ESTATE, CONSTRUCTION & BUILDING MATERIALS|
|Real estate, hotels, rental and related services;||High capital requirements , government dominated|
|Construction companies, contractors and special trade contractor||Sector has still not recovered from recession. Supply still exceeding demand.|
|TRADING & RELATED SERVICES; TAILORING & CLOTH TRADING|
|Computers and mobile phone trading and maintenance||Ordinary Business & Saturated Market|
|General and wholesale trading, trading in building materials, auto parts||Ordinary Business & Saturated Market|
|Shayla & abhaya & tailoring and cloth trading activities||Ordinary Business & Saturated Market|
|MANUFACTURING & INDUSTRIAL|
|Mining and mineral Industries, cement and cement products||High capital requirements, excess supply|
|Maintenance workshops, carpentry and shopping bags||Ordinary business, saturated market and high competition|
|Perfume and Cosmetics manufacturing and trading||Ordinary business, saturated market and high competition|