For a long time, startups in the region have been quick to mention that there are not enough investment opportunities in Mauritius. Taking into consideration the population of the country and the number of businesses, we would be tempted to jump to the same conclusion.
However, after exchanging with Michel Cordani of Dinacor Consulting, we realized that there are a lot of untapped investment opportunities in Mauritius. Being both an investor and an entrepreneur working with several ventures such as Coworking Port Louis, Michel recognized that many people do have innovative ideas. Unfortunately, in most cases those people do not possess the entrepreneurial skills to develop those ideas.
What stop start-ups from accessing to investment? Through this interview, Michel Cordani uncovered the reasons why start-ups failed in embarking investors on their entrepreneurship journey.
Is Mauritius an environment prone to startups?
From data collated by the Mauritius Commercial Bank (MCB) in 2013, there were about 125,543 small-medium enterprises (SME) in Mauritius. These small businesses have often been financed through traditional processes such as taking loans from banks like the MCB itself.
Even though there are many businesses in the country, Michel argued that there are not enough startups. “There is no entrepreneurship culture, especially for the growth of startups in Mauritius,” says Michel.
“At the universities, young people are exposed to traditional careers such as law or medicine, but nothing related to the teaching of entrepreneurship. And when they choose to start a business, many young people lack the skills needed to scale up their businesses. So, to create a culture of entrepreneurship, we need to provide opportunities for people to learn entrepreneurial skills.”
What are investors looking for?
Even with knowledge in entrepreneurship, many startups still fail to obtain investment to grow faster. The truth is banks don’t invest easily in startups. Entrepreneurs have to look for actors in the entrepreneurship ecosystem to fund them.
For Michel, startups don’t understand that business angels will not invest in a concept. Many startups make the mistake of just presenting mere ideas to investors.
It is very important that before meeting with investors, startups should consider the minimum requirements that investors are looking for in a startup project. The key factors, that investors like Michel are looking for before investing, are related to the relevancy of the business model itself, the market analysis and the fund required to grow their project. Consequently, startups need to ensure that the quality of their plans supports the growth of their businesses.
Where can startups find investors?
It goes without saying that finding investors can indeed be quite difficult. One of the struggles that startups face is to create a viable business plan that will hook the investors. Unfortunately, without a professional network or connections, it becomes harder to find investors. So, where could startups find them?
According to Michel, the Mauritian government and private companies in the region have been very instrumental in providing solutions to this problem. Thanks to schemes such as the National SME Incubator Scheme (NSIS), investors have come together through incubators to “identify, nurture and grow startups”.
Michel’s own incubator, La Plage – Tropical Tech Hub, invests in startups that are driven by technology and innovation. He believes that through incubators, startups will not only have training on how to package their ideas as solid business plans, but they will also have access to a network of mentors and investors.
Furthermore, as Michel points out, the rising number of foreign residents in the region presents a new opportunity for investment. Many of these foreigners have funds that can be invested in viable start-ups with the right guidance. Michel’s goal is to connect potential investors with entrepreneurs.
It may wrongly seem that there is not enough investors in the region but you just need to know where and how to look for them. Focusing on the planning of a viable business is crucial to attract investors, but knowing where to find them is also essential. From the very beginning of their project, entrepreneurs should think about the possibility to be supported by incubators such as La Plage, La Turbine or Mauritius Start-up Incubator.