DGGF releases the study on Scaling Access to Finance for Early-Stage Enterprises
The Dutch Good Growth Fund (DGGF) is pleased to release its latest report – the study on “Scaling Access to Finance for Early-Stage Enterprises in Emerging Markets: Lessons from the Field”. The report is a result of a comprehensive research undertaken by DGGF with the support of consultants, experts, field builders, investors, and other local and international stakeholders. The report seeks to explore how to improve the scalability and viability of early-stage finance provision in emerging markets, thereby reducing the need for philanthropic capital and subsidies to the local providers of finance and support to early-stage enterprises.
Scope of the Study
For the purposes of this study, we focused on the challenge of financing of early-stage businesses that may be in pre-revenue or revenue stages, are in a pre-profit stage, but have demonstrated traction in the market and potential to scale up, and that are seeking to raise between USD 10.000 and USD 500.000 of investment.
In order to explore how to improve the scalability and viability of provision of early-stage finance, we used a landscape exercise to define and prioritize “archetypes of early-stage finance provision” as the focus for the report. We selected the three main “archetypical” models - business accelerators, business angel networks and early stage venture capital funds, as well as the broader category of supplemental “non-traditional” debt options.
Analysis of archetypes of early stage finance and findings
The report explores the general characteristics, relevance and developmental impact of early-stage enterprises in the context of this study, followed by the analysis of the main financing challenges faced by early-stage enterprises and how the specific ecosystem impacts the relevance, optimal approach and effectiveness of the financing options and selected financial intermediaries discussed in the report.
Four categories of financing options - three main (equity-led) archetype models, and supplemental non-traditional debt models, are discussed in the report, including operational characteristics and business models and factors contributing to failure or success of each of the archetypes. Throughout the report, the emphasis is on the role of each of the archetypes in their operating ecosystem, including how they may interact with one another in a given entrepreneurial ecosystem.
The report ends with conclusions and provides a set of actionable recommendations as to what could done to strengthen the sustainability and scalability of early-stage enterprise finance provision in emerging markets.
Webinar
Join DGGF and Collaborative for Frontier Finance (CFF) for the webinar, where we will officially launch and discuss the findings of the report “Scaling Access to Finance for Early-Stage Enterprises in Emerging Markets: Lessons from the Field”.
When: Tuesday, 29 January 2019, 3 pm CET (2 pm GMT)
Contact: For information contact Karina Avakyan, kavakyan@triplejump.eu
Read the Early Stage Finance Report (incl. Executive Summary) (pdf).