Overview
Developing a dynamic startup finance ecosystem project will address the weaknesses in the finance ecosystem through the following Initiatives:
- Angel group/network building
- Investment readiness advisory services (IRAS)
- Catalytic funding (Pre-Investment and Co-Investment Grants Programs)
Angel group/network building
This initiative will promote and support (through an assistance package) the development of organized angel investing in the WB&G, targeting the formation and development of two to three active angel groups.
Investment readiness advisory services (IRAS)
The IRAS program is part of the IGNITE program, which integrates both the IRAS and Pre-Investment Grant program.
IRAS will feature a ‘business readiness’ and ‘investment readiness’ training and coaching program, along with ‘entrepreneur-investor engagement’ for high-growth potential startups and innovative SMEs in the West Bank and Gaza.
The objective of IRAS is to equip Palestinian entrepreneurs with the confidence, knowledge, and skills necessary for investment readiness, investor engagement, and the capital-raising process. This includes identifying and attracting investors, understanding investment terms and negotiations, preparing the data room, and meeting the expectations of the investment due diligence process. Additionally, IRAS aims to prepare entrepreneurs for effective post-investment collaboration and relationship management with investors. In essence, the program seeks to strengthen deal flow by addressing gaps in entrepreneur investment readiness and investor engagement.
Catalytic funding grants
The catalytic funding grants will be provided to high-growth startups and innovative SMEs that help stimulate private investment by angels and early-stage VCs and encourage investment syndication between seasoned and less experienced investors.
- Pre-Investment Grants in the amount up to US$50,000 per firm, will involve grant funding to enterprises that show business and investment promise but are still not considered “investment ready” by investors. The purpose of the pre-investment (PI) grants will be to (i) bridge the early commercialization funding gap to investment, (ii) provide funding for firms to address shortcomings identified by investors or early-stage investment experts, including under the IGNITE program, and (iii) improve the likelihood that firms can subsequently secure seed stage (angel, e.g.) investment within a short time frame (targeting 6–12 months).
Pre-Investment Grant program is part of the IGNITE program.
- Co-Investment Grants aim to help stimulate investment by early-stage private investors, including syndication between seasoned investors and encouraging first-time angel investors. Co-investment (CI) grants will provide supplementary funding to firms that are able to raise investment from approved early-stage private investors. The CI grants will provide additional funding—beyond what investors are willing to make—to help early-stage firms develop and grow. The grants will also help lower the risk perception of investors by better capitalizing the enterprises, thereby providing a longer “runway” to achieve business development milestones that lead to stronger businesses. In addition, CI funding could encourage investors to spread capital across more investments (portfolio strategy), thereby leading to more Palestinian firms receiving the benefits of angel and other investors as partners. Co-investment grants will provide up to 50 percent of the financing round as a match to private investment, with grants up to US$100,000 and up to 33 percent of the financing round for grants from US$100,000 to US$350,000.
