The biggest problem facing a start-up business is the lack of investment capital, which can come from angel investors or venture capital funds. 

A local start-up team displaying their products at a conference

Angel investors are individuals or organisations who are willing to pour their own money into a start-up business before it has created any products or generated any revenue and profits.  Venture capital funds, on the other hand, are private equity investment vehicles that seek to invest in firms that have high-risk or high-return profiles, based on a company's size, assets and stage of product development.

Currently, most of the start-up projects in Da Nang have only attracted angel investors.  In particular, in its first 4 months of operation, the city’s Business Incubators Centre has selected and given financial aid to 8 local start-up projects.  One of them attracted 1 billion VND from angel investors.

After participating in the Start-up Fair 2016 in June, Ms Trinh Thi Hong from Lien Chieu District’s Hoa Minh Ward found 10 domestic and foreign angel investors for her project on producing cleaning fluid from biological products.  

Ms Ha Thanh An, leader of the AntBuddy team which won first prize at the fair, stressed the necessity of securing venture capital funds to ensure the sustainable development of start-up projects.

Mr Thong Le Anh Tuan, leader of the start-up team ZODY, said that venture capital funds are mainly based in Ha Noi and Ho Chi Minh City.  He added that the city’s start-up businesses should therefore operate directly in the 2 big cities if they want to access that kind of funding.  This could make Da Nang suffer from a start-up brain drain.  He, therefore, underlined the importance of creating closer links between local start-up businesses and angel investors from both home and abroad, and national and foreign business incubators.

The Deputy Director of the Business Incubators Centre, Mr Ly Dinh Quan, affirmed that his centre would organise more seminars and exchange activities with successful start-up entrepreneurs and potential angel investors to expand its funding for local start-up businesses.  He remarked that the city’s Coordination Council for Business Start-up Network would become an angel investor for local start-up businesses.

At present, the Coordination Council is completing its draft on ‘Support Plans for Start-up Businesses in Da Nang towards 2020’ and this will be submitted to the local authorities for approval later this year.  Under the plans, a support fund for start-up businesses and a public-private partnership support fund will be established on a trial basis very soon.