FUNDING AND DISTRIBUTION Due to the fact that several hubs are non-profit or sponsored organisations, achieving financial sustainability is key. When compared to findings from Briter’s 2019 hubs study, hubs are increasingly reliant on external donors to fund their operations. When asked if they had received external funding, 29% of the respondent hubs claimed to have received up to $50,000 since inception, 14% indicated to receiving between $50 - $99,000,
while 10% of the hubs preferred not to disclose their funding status. The funding came from various sources, including corporate sponsors, private foundations, NGOs, government agencies, philan- thropic organisations, embassies, DFIs, private investors, universities, and venture capitalists, who are listed as the most active funders (Box 1). The figure excludes financing for specific programme implementation or consulting exercises.
BOX 1: KEY PARTNERS
funding for further cash deployment into startups has di ff erent legal and logistical implication compared to funding to cover direct costs. While In addition, another possible factor could be the fact that most investments, especially into early-stage companies, require long-term commitments and many hubs do not have the capacity to make long-term bets, or it could simply be, as earlier mentioned, that hubs would rather prioritise capaci- ty-building initiatives and supporting entrepreneurs beyond the mere deployment of financial capital.
When it comes to donor funding allocation, most respondents specified directing the funds to programmes as the most important use. The programmes, which are centered around business training and workshops, and include hackathons and bootcamps, o ff er a perfect opportunity for entrepreneurs and startups with innovative ideas to introduce and present their ideas, and for existing companies to gauge and recruit outstanding talent. Investments in startups turned out to be the least prioritised use of donor funds, likely because, from a donor or corporate perspective, structuring hub
FIGURE 7: KEY SOURCES OF FUNDING FOR TECH HUBS
Embassy DFI Private Foundation Other
Corporate sponsor Private NGO Government Philanthropic organisation
5
Made with FlippingBook Ebook Creator