Startups having a hard time accessing capital

Vietnam has about 3,000 innovative startup businesses or startups. However, not many startups are successful in calling for investment.

Vietnam has about 3,000 innovative startup businesses or startups. However, not many startups are successful in calling for investment. It is estimated that less than one-third of enterprises have access to preferential loans. This shows that access to the loan market is still not readily available for startups.

Regen Solution's blood donation social network connects people with blood needs and people who can donate blood. As a founder, Luong Trung Dung has brought this project to investors in Singapore and some big investment funds of Vietnam. Though the product is very practical and highly sought-after, Dung still failed.

Capital is always the first hurdle for many startups in Vietnam. To address the biggest elephant in the room, businesses mainly call for capital from state financial funds and other channels such as investment funds on securities, venture capital funds, individual investors or non-governmental organisations. Major deals mainly come from foreign investors.

Experts have said that many startup enterprises have not focused on the practicality of business models, and pay too much attention to the idea. When there is no careful preparation, even when they score huge investment, startup businesses are still very vulnerable.

In 2018, the Government issued Decree No. 38 on investment in small and medium-sized start-ups and connecting investors. The decree provides a general principle as a legal basis for private investors to contribute capital to the innovative entrepreneurial investments. Although it is still in the implementation phase, this decree is expected to contribute to "smoothing out" capital flows for startup businesses in the coming time.-VNA

VNA