E X E C U T I V E S U M M A R Y
THE HIGHLIGHT REEL A qu i ck snapshot of i ns i ght s f rom i nves tor s , ESOs and ent repreneur s sur veys and focus groups
said that they are currently making profit. 65% of entrepreneurs made between 10%-20% of their revenues via ‘products or services’ their com- pany developed in the last three years. In addition, only 2% of entrepre- neurs indicated that they make over 60% of their revenue through products or services developed in the last three years. These observations are evident across venture types and the region in which the venture is located but not the stages of the venture. 90% of entrepreneurs with later-stage 2 ventures (5 years and over) said that they are currently profi- table compared to 70% of entrepreneurs with start-up-stage 3 ventures (1-4years) that are not profitable. Research shows that the underlying reasons for such low records include low financial support available to entrepreneurs for the initial phase of their venture; some ventures have socially-focused business models; and insti- tutional barriers to accessing funding such as high interest rates and lack of collateral guarantees. Other reasons include poor skilled talents, supporting infrastructures and government policies/regulations. The conditions for female entrepreneurs to create businesses and grow as entrepreneurs are considerably less enabling due to restrictive financial barriers that prevent women from obtaining funding for business star- tups because of a lack of collateral; and biased economic systems in which women are sidelined in society.
Theme 3. Sustainability challenges threaten ESOs and Entrepreneurs long-term survival:
Behind successes or struggles of ESOs and entrepreneurs lies the ques- tion of sustainability. How do ESOs and entrepreneurs seek to become sustainable? Are there business models created and leveraged in such a way that they can continue to operate in the future? Findings reveal that ESOs and entrepreneurs face a number of sustainabi- lity challenges. Notably among these challenges are: poor growth rate, limited capital, and weak product development. 52% of ESOs revealed that they are not financially sustainable. 55% of ESOs need between 50% and 100% increase of their funding to support entrepreneurs in the next three years. 83% of ESOs have shown that at least 20% of their revenues are achieved through government funding.
Only 20% of entrepreneurs have reached the break-even mark and 38%
2. Later-Stage refers to the start-up is an established market player. The trade sale or stock market flotation has already taken place or is about to commence. 3. Start-up-Stage: The start-up has a market-ready offering. First users and revenues can be reported.
N E E D S A S S E S S M E N T R E P O R T
Trends and insights from ESOs, entrepreneurs, and investors
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