If someone in your country thinks about innovative new types of products or services, technological innovation, and innovation in the field of Pre-idea 4.0, is there no problem with finding external financing, i.e. obtaining financial capital for the implementation of this developed innovation?
What types of external financing sources dominate your country in terms of financing the development of innovative startups?
Please, answer, comments. I invite you to the discussion.
For hi-tech companies you can find external financing but for innovative companies operating in the traditional sectors it is very difficult yo find funding solution
Funding plays a major role and nowadays getting a funding for a project is much more difficult than research....
If ur project is vary from others and it might be useful for the society as a whole it increase a chances
All the best
In Sri Lanka, such funding can be obtained from both Venture Capitalists and Banks. However, the banks look at the proposals objectively if they have appraising officers having exposure to "Development Banking".
The Development Banks were the administrators of credit lines came through foreign funding agents viz., European Investment Bank, JBIC, IFC etc., which encouraged innovative projects of SMEs. Funding decision is subjected to
(1) Promoters' perspectives (Creditworthiness, Know-how, Experience as an entrepreneur, attitudes...),
(2) Marketing feasibility
(3) Financial viability, specially the debt serviceability within the period of refinancing stipulated by the foreign funder
(4) Technological feasibility &
(5) Risk mitigating plans.
The bank also assesses how the working capital is procured. Often the long-term debt to equity ratio is limited to 50:50, leaving a cushion to absorb unexpected liquidity issues.
In contrast, the Venture Capitalists invest in the forms of either equity or debt with involvement in decision-making and control process of the new venture.
In addition, there are established large business entities who extend seed capital and other forms of assistance (workshop, equipment, labor...) if the promoter could convince how the innovative proposal be incorporated into their productions.
However, many innovators follow "Lean Start Up Model" with limited funding arranged privately till they develop a marketable product / service.
I am glad that interesting answers to the above question appeared.
Do innovative startups in your countries easily obtain external funding for their investment projects from commercial financial institutions?
The question inspired an interesting discussion and interesting conclusions that could be an inspiration to continue research in this area.
The answers given are very scientifically inspiring. In my opinion, it is good that there was a discussion in the question of this query.
Therefore, I am still reading the answers, following the interesting discussion.
Thank you for your answers. I invite you to further considerations, to continue the interesting discussion.
In China, if you are a university student, you can get some investment from the government.
Dear Friends and Colleagues of RG
If someone in your country thinks about innovative new types of products or services, technological innovation, and innovation in the field of Pre-idea 4.0, is there no problem with finding external financing, i.e. obtaining financial capital for the implementation of this developed innovation?
What types of external financing sources dominate your country in terms of financing the development of innovative startups?
Please reply
I invite you to the discussion
Best wishes
Innovative start ups in my country have had a great bearing on the job market especially after the sanctions imposed by America and they receive adequate funding both from the government and commercial financial institutions.
Unfortunately, for innovative startups, the possibilities of external financing are limited, as banks are reluctant to provide investment loans for the development of a newly-started startup. In addition, banks can not easily assess the level of credit risk in a situation where the surveyed economic entity does not have a history of its functioning, because it has just been established and for the development of production based on innovative technology or starting to produce innovative products, offering ion-innovative services is looking for financing. Innovative startups often finance their development without bank loans, making use of investment support from investment funds specialized in investments in high-risk business ventures, using financial support from business angels, public funds supporting the development of innovation and entrepreneurship, issuing securities, etc.
What's your opinion on this topic?
Please reply
Dear Mirna Leko-Šimić, Emmanuel V Murray, Ademilade Aboginije,
Thank you very much for your reply and confirmation of my theses regarding the recent years of developing non-banking forms of external financing of investment projects implemented by newly emerging, innovative startups.
Best wishes,
Dariusz Prokopowicz
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