BEIRUT: Raising capital is considered the most stressful part for startup founders and entrepreneurs when they are required to roll up their sleeves and exaggerate their way into the ears of investors or Venture Capital firms to capture their attention.
In an increasingly competitive market, with a huge increase in the number of startups, investors hold a tight grip on who to spend their money on. The next step: pre-seed investments.
A typical pre-seed round sees a founding team, often pre-product, receive a small investment to hit one or more of the milestones they’ll need to ready themselves for “true” seed investment: from hiring a critical team member to developing a prototype product.
Finding pre-seed investments in Lebanon was a rare occurrence; until recently, when the international leader of maritime transport CMA CGM announced the signing of a partnership agreement with the incubator Smart ESA to become the first investment partner of the university-based incubator.
“Early stage investment is considered to be a much-needed game changer for Lebanese startups and the ecosystem since it gives entrepreneurs the ability to focus on certain milestones within their company to achieve, to elevate later on too much bigger rewards,” Jihad Bitar, director of Smart ESA told Annahar.
Bitar highlighted that ESA’s ability to grant pre-seed investments through its partnership with CMA CGM will allow for a higher number of startups to grow at a faster and more practical rate.
“These small investments will aid founders to accomplish a set list of goals will enable them to reach tangible results and small victories that will eventually stack up and grow their startups adequately,” he added.
The partnership will grant startups in ESA’s incubator program a $25,000 in pre-seed investments, along with $30,000 in client investments by Smart ESA, for 8.5 percent equity of the nascent company.
“The partnership is set to be implemented during the beginning of our next cycle of startup scheduled for March, where seven startups will be chosen by CMA CGM to be given early-stage funding to work on their startup’s plan of action,” Bitar noted.
Alongside offering pre-seed investments, CMA CGM will grant ESA incubated startups to tap into the company’s worldwide network and expertise.
“Since the start, entrepreneurship and innovation have always been at the heart of the pedagogic project of ESA,” Stéphane Attali, Director General of ESA, said, adding that “today, the partnership with CMA CGM will take this ambition to a new level, by allowing our start-ups to have access to interesting investments and boost their business.”
This partnership is in line with the CMA CGM Group strategy which aims at making digitalization one of the pillars of its development.
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