Lebanon's Startup Ecosystem Roadmap - BDL Accelerate 2015

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Contents
I. Foreword by Banque Du Liban 4
II. Acknowledgements 6
III. Executive Summary 7
IV. Introduction 8
V. Our Approach 10
VI. Back to Basics 12
A. What is a Startup? 13
B. What is an Ecosystem? 16
VII. Ecosystem Framework 18
A. Drivers of evolution 19
B. Evolution as a function of space 20
C. Evolution as a function of time 22
VIII. Focus: Mapping Lebanon 24
IX. Zoom out: Trip Around the World 33
XI. Lessons from Around the World 54
X. Challenges from Lebanon's Startup Ecosystem 56
XII. Actionable Initiative: Lebanon's Startup Ecosystem Roadmap 76
XIII. Conclusion 80
XIV. Closing Notes 82
XV. Partners 84
XVI. Endnotes 88
Commissioned and Edited by Startup Megaphone
Startup Megaphone is a specialized resource and marketing
engine that amplifies and directs the voice of Lebanon’s startup
ecosystem to the world. Startup Megaphone organizes international
events and activities in key cities (e.g. New York, London,
Singapore…), showcasing startups, investors, and support institutions
from Lebanon, and enabling their fundraising, networking, and
business development.
Startup Megaphone empowers Lebanon’s nascent entrepreneurship
scene, positioning it as a premier international startup hub.
www.startupmegaphone.com
Developed and Prepared by Startup Ecosystem Think Tank (SETT)
SETT is a consulting-think tank hybrid with a special focus on
Startup Ecosystems in emerging markets. SETT helps clients
better understand their ecosystems through research, reports, and
workshops. SETT guides clients in reimagining their landscape
through a problem-centric approach to program development and
training.
Project Director and Author: Tamara Zakharia
tamara@settpartners.com
Research Analyst and Contributor: Raissa Achkar
Consultant and Contributor: Maysa Mourad
www.settpartners.com
Creative Direction and Design by Roof Eleven
www.roof11.com
Funded by Banque du Liban
Banque du Liban (BDL) is the Central Bank of Lebanon. It was
established on August 1, 1963 and became fully operational on April
1, 1964. It is currently headed by His Excellency, the Governor, Mr. Riad
Salameh.
www.bdl.gov.lb
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4
FOREWORD by Banque Du Liban
Banque du Liban continues to be the cornerstone of the Lebanese
economy, and its governor, Riad Salame, at its forefront. The past four
years have revealed significant national and regional difficulties, but
even during the most challenging of times, the Lebanese economy
was able to achieve real annual growth of 2%. Banque du Liban’s
unconventional monetary policy tools have kept the economy
afloat despite the unfavorable conditions. Our forward thinking and
progressive outlook ensure that Lebanon’s economic development
matches the quick-paced, momentum of world economies.
Developed markets are relying less and less on physical resources
and migrating towards an inwards investment model: the knowledge
economy. Knowledge-based economies rely on the production,
distribution and use of knowledge and information. This translates into
an economy that depends primarily on its human capital to produce
knowledge. Lebanon’s richest resource is unquestionably its human
capital, making it an ideal knowledge-based economy candidate.
Believing that this is the new growth model, and having faith in the
Lebanese youth, we, Lebanon’s Central Bank, accordingly issued
Intermediate Circular 331 to encourage Lebanese banks to invest
in the equity capital of startups, incubators, accelerators and other
companies working in the knowledge economy. This innovative
scheme has made available potentially USD 400 million to support
creativity and innovation. Having been launched over a year ago, this
initiative has so far committed around USD 200 million by the banks
and already invested in several start-up funds, support institutions and
companies. The main objective of Circular 331 is to develop Lebanon’s
startup ecosystem and ultimately its economy by providing the right
environment and infrastructure to support the surge in innovation and
job opportunities that the growing knowledge economy is expected
to create.
Knowledge provides stakeholders the power to make more informed
decisions, ultimately increasing the chances of success. We
believe that this report is a step in that direction, offering a better
understanding of our local ecosystem and the challenges it faces,
allowing us to devise better solutions that will guide us throughout
our ongoing progress.
Marianne Hoayek,
Founder and Organizer, BDL Accelerate
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7
Acknowledgements
This report was commissioned to identify the main challenges the Lebanon’s startup ecosystem faces and the initiatives the Lebanese
ecosystem needs to undertake to fill in the gaps preventing it from becoming a high-potential site among global startup ecosystems.
The research identified the main features of the Lebanese ecosystem through round tables sessions. In these sessions, key
stakeholders identified and elaborated on the main challenges they face, summarized in this report as 13 key pain points. In addition
to examining Lebanon’s ecosystem, the research examined best practices in cultivating startups through a review of nine countries
and their ecosystems.
The result of this study us a set of recommendations for Lebanon’s ecosystem, presented as specific initiatives, summarized below:
Executive summary
Abdallah Jabbour – Lebanon For Entre-
preneurs (LFE)
Antoine El Boustany – Saned Partners
Bassel Aoun – Kafalat iSME
Corine Kiame – IM Invest
Ghaith Yafi – Y Ventures and B&Y
Ventures
Henri Asseily – Leap Ventures
Josiane Sreih – Lebanese American
University (LAU)
Malik Khoury – LeWagon
Mirna Shidrawi – AMIDEAST Entrepre-
neurship Center
Nader Shoueiry – Ministry of Economy
and Trade
Nadim Zaazaa – UK Lebanon Tech Hub
(UKLTH)
Nicolas Sehnaoui – Beirut Angels
Paola Chakhtoura – American Lebanese
Chamber of Commerce
Paul Chucrallah – Berytech Fund II
Racha Ghamlouch – ArabNet
Rami Panayoti – Middle East Venture
Partners (MEVP)
Sahar El Zaloua – MIT Enterprise Forum
(MITEF) Pan Arab
Sami Abou Saab – Speed@BDD
Sara Hassan – eTobb
Tarek Sadi – Endeavor Lebanon
Theodore Khoury – Bootcamp
Yasser Akkaoui – Executive Magazine
Zeina El Khoury – Ministry of Economy
and Trade
Zeina Saab – The Nawaya Network
Roundtables
Endeavor Egypt
Tehran Hub
C4 Ventures
Startup Bootcamp Istanbul
Golden Gate Ventures
Ideas Factory Chile
Partners
Alejandra Winter Etcheberry - Ideas
Factory Chile
Alireza Omdivar - Iran Entrepreneurship
Association
Aly Khaled ELShalakany - Cairo Angels
Arnaud Bonzom - 500 Startups
Babak Kabiri – Sarava
Cansu Deniz Bayrak - StartupBootcamp
Istanbul
Christina Bechhold - Samsung Global
Innovation Center NY
Chrysantos Chrysantou - Notion Capital
Colette Ballou – Ballou PR
Eero Kasanen - Aalto University
Elif Ceekan - StartupBootcamp Istanbul
Emma Swift - Tech City UK
Habib Kairouz - Rho Ventures
Habiba Moawad - Endeavor Egypt
Hadi Farnoud - Camva Iran
Heba Gamal - Endeavor Egypt
Ines Cheaib - C4 Ventures
Juan Jose Güemes - IE Business School
Justin Hall - Golden Gate Ventures
Karim Harmouche - PricePinz
Kathleen Fritzsche - Accelerate Stuttgart
Lena Dimitrieva - Pitchbook
Lotta Hassi - ESADE Business School
Mario Berta - FlySpaces
Maya Rahal - Wamda
Menna AbdelRahman- Cairo Angels
Michael Lints - Golden Gate Ventures
Neda Golshan - Sarava
Ramez Mohamed - Flat6Labs
Rocio Fronseca - Startup Chile
Rodrigo Martinez- FYI
Said Rahmani – Sarava VC
Samir Housri - theMednet
Sara Usinger - Avatech
Sebastian Vidal - Startup Chile
Simon Schaefer - Factory Berlin
Steven Hailey – Eureeca
Till Ohrmann - Pirate Summit
Uldis Leiterts - Infogram
Will Mercer - The Trampery UK
Ziad Abdel Nour - Blackhawk Partners
Interviews
Umbrella Initiative
Initiative 1: Information & Processing
Initiative 2: Education and R&D
Initiative 3: Promoting Lebanon
Initiative 4: Attracting Talent
Initiative 5: Legal Training & Policymaking
Initiative 6: Diaspora
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Lebanon’s history brings together a myriad of cultures, religions,
innovations, and wars. The state was only granted sovereignty in
1920, and gained its independence from the French in 1943. Years
of conflict have devastated the country and its economy, which
hasn’t fully recovered. Yet, history also has numerous positive
anecdotes that capture the resilient spirit of the Lebanese people.
In many cases, they have transformed the challenges of their
environment, making innovative strides in business.
In 2013, Lebanon’s Central Bank, Banque du Liban (BDL), issued
Intermediate Circular 331, which will inject US $400 million
into the development of Lebanon’s knowledge economy and
will provide critical funding to the country’s promising startup
ecosystem.
Initiatives like Intermediate Circular 331 reflect the belief that
Lebanon has the potential to produce ideas and transform them
into successful businesses, scaling up the whole economy and
decreasing unemployment. Proper planning is vital for BDL’s
Intermediate Circular 331 to create long-lasting economic impact.
Introduction
Today is therefore a pivotal moment for Lebanon to assess what is
needed for the startup ecosystem to thrive.
This report aims to explore the main pillars needed to support the
Lebanese startup ecosystem. One of the main tools of analysis is
the success of other cities, countries, and their respective startup
ecosystems, which provide case studies for strengthening our
very own. We propose a plan to implement these insights, which
is titled: Actionable Initiative: The Lebanon Startup Project. This
initiative will pave the way for Lebanon to develop a cohesive
domestic startup ecosystem catering to an international audience.
The value of this report lies in the proposed recommendations
that are specific and actionable. Through roundtable discussions
with Lebanese ecosystem stakeholders, the report clearly
highlights the main challenges currently facing the Lebanese
startup ecosystem. The report then applies best practices from
other ecosystems to contextualize possible solutions to these
challenges.
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10 11
Over the course of a month, we carried out semi-structured inter-
views with more than 60 stakeholders from all over the world. We
used Skype or phone to conduct the majority of these interviews, and
calls lasted 25 minutes on average. The objective of each interview
was to gain in-depth knowledge about how a particular city or
institution managed to overcome a specific challenge. The challeng-
es at the center of these discussions aligned with the challenges
identified by Lebanese ecosystem stakeholders in phase 3.
Researchers briefed these experts and influencers on the ecosys-
tem in Lebanon and asked them to reflect on their own ecosystems
through the lens of Lebanon’s particular challenges.
In the final phase of this research,
the data (macro and micro) and input
of experts (local and international)
were synthesized.
Proposing actionable initiatives for
Lebanon’s startup ecosystem moving
forward
OUR APPROACH
1. Drivers of evolution
2. Evolution as a function of space
3. Evolution as a function of time
The sessions were structured as follows:
1. Presentation of SETT (5 minutes)
2. Presentation of project (10 minutes)
3. Presentation of challenges and case
studies from around the world (10 minutes)
4. Discussion among stakeholders moderated by
SETT
The objective of the round tables was to prompt discus-
sion among the local stakeholders to better understand
the challenges hindering the Lebanese ecosystem.
The approach presented in this document draws on nine months of research and preparation work led by SETT. During this period,
the researchers assessed varying factors that constrain or drive a startup ecosystem’s ability to flourish. They then applied the
conclusions of this assessment to make recommendations on interventions that are likely to be effective in fostering the startup
ecosystem in Lebanon.
This approach has five core components:
We conducted a literature review in order to under-
stand what defines a startup and how its ecosystem
is constructed. Our research is comprised of articles,
books, and studies carried out by entrepreneurship and
innovation experts and influencers, allowing us to con-
jure a cohesive definition of a startup by combining the
underlying themes of the most accredited definitions.
We then deconstructed a startup ecosystem, and in
doing so were able to identify three key elements
to its evolution. The three elements represent the
dimensions of the report framework:
Identifying Constraints and
Challenges
Exploring the drivers and constraints of the
Lebanese startup ecosystem;
Identifying commonly used terms
such as startup and startup ecosys-
tem and presenting a framework for
evaluating both;
Defining Contexts
Macro and Micro Data Collection
Mapping and charting startup ecosystems’ growth1
2
3
4
5
Based on our framework for evaluating an ecosystem,
we collected data to populate and illustrate the three
elements of the framework.
Online research and interviews were the core
methods we used to map data on local players
of every ecosystem. Our Report Partners also
supported this research by filling in a form listing
local ecosystem players, which we reviewed and
incorporated into our final lists.
This phase of research guided our efforts in
defining illustrative tools for each ecosystem:
The “Drivers of Evolution” map
The “Evolution as a Function of Time”
Once we had a localized picture of each, we added a
macro layer of data on the ecosystems, using already
existing indicators and economic data as the main
sources of information for this layer. In the case of
any missing information, we contacted the relevant
ministries. This macro data is reflected in the color-
coded areas of each ecosystem’s “Evolution as a
Function of Space” graph.
The resulting maps and graphs allow us to more
easily compare between ecosystems, both locally and
internationally, in order to extrapolate best practices.
Categorization of Best
Practices
Classifying different startup ecosystem
interventions from around the world
Devising Solutions
In phase three, we identified key stakeholders in
the Lebanese ecosystem and invited a represent-
ative from each to attend one of three roundtable
sessions. Each session was an hour long and had
between six and ten participants.
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Definition
BACK TO BASICS What is a startup?
Going through the plethora of reports and articles published about startups, one quickly notices that there are multiple definitions of a
startup in play. The word startup could be used to refer to a new venture in one article, while in another the number of employees at a
company defines it. Because there is no science to define what a startup is, we will lay out the startup definitions set by industry lead-
ers and highlight the points they share in common to bring them together into one comprehensive definition. This definition of a startup
will be used throughout the course of the report.
- Steve Blank, co-founder of E.piphany
- Paul Graham, founder of Y Combinator
Steve Blank is a Silicon Valley serial-entrepreneur and academic. Blank is recognized
for developing the Customer Development methodology, which launched the Lean
Startup movement. [1]
Paul Graham founded Y Combinator in 2000, and today it is the leading Silicon Valley Accel-
erator. Y Combinator has invested in more than 940 companies including Dropbox, Airbnb,
Coinbase, Stripe, and Reddit. The combined market capitalization of YC companies is over $65
billion.[3]
An organization formed to search for a
repeatable and scalable business model.
A company designed to grow fast. Being newly
founded does not in itself make a company a
startup. Nor is it necessary for a startup to work on
technology, or take venture funding, or have some
sort of ‘exit.’ The only essential thing is growth.
Everything else we associate with startups follows
from growth.
- Eric Ries, author of Lean Startup
Eric Ries is an entrepreneur and author of the New York Times bestseller The Lean Startup:
How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful
Business. [2]
A human institution designed to deliver a new
product or service under conditions of extreme
uncertainty.
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InnovationGrowth,
Fast & Unreasonable Growth
The various startup definitions are
The age of a company doesn’t matter when
classifying a startup. Whether it was founded a
few months ago or three years ago, as long as a
company’s growth curve is still vertical it can be
classified as a startup. Therefore, overwhelming-
ly fast growth is one characteristic of startups.
Startups grow very quickly to eventually gradu-
ate into a corporation. If they fail to grow quickly,
they become zombies. The period of vertical
growth between founding day and when growth
plateaus is the startup period.
Growth can mean several things. It can be inter-
nal growth, by expanding teams and operations,
or it can mean market growth, by increasing the
number of users and customers.
What does not define a Startup?
When does a Startup stop being a Startup?
A startup looks at an old problem and
strives to find new solutions for it. The
element of novelty is key; a startup
must be introducing a new or better way
of doing something to the world. With
novelty comes uncertainty; therefore we
associate startups with risk.
1 2
The size of the company
The industry in which the company operates
When it was founded
Being a startup is a culture more than anything else. Startups of all ages and sizes would like to remain categorized as so, but main-
taining the dynamic, high-risk agility of a startup becomes much harder as profits and the number of employees increase.
The million-dollar question that confuses many is ”when does a startup stop being a startup?” The brief answer is that this transition
occurs when there is a general shift of focus from creation to preservation. Below we will articulate what this means in more tangible
terms. [4]
General shift
from creation
to preservation
When examining the various definitions given to startups by the industry experts and influencers,
we identified the following underlying and overlapping themes:
When there is a general shift from creation to preservation, a startup
stops being a startup.
Little Day to Day Risk
Plateaued Growth
Slowed Down Innovation Rate
Profit generation reduces the risk element and resource
strain of a startup. As a result, volatility decreases and
decisions are made on a longer rather than shorter-term
basis. Day to day operations are more stable, and pivots in
the company’s business model happen less frequently.
The company is no longer on steroids; the growth rate of
the company slows down, as defined by its number of em-
ployees or the number of its customers or users. The growth
curve begins to plateau.
Large operations and consequently large teams make
it much harder to quickly change direction and respond
quickly to the customer feedback loop. Innovation becomes
incremental rather than radical.
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“The Valley has reshaped lives and languages, creating new verbs - to google, to
facebook, to uber - and repurposing old ones - to tweet, to message, to like.”
The term ‘Silicon Valley,’ coined by columnist Don Hoefler in Electronic News in 1971, reflects the presence of
the local silicon computer-chip companies. Located in the southern part of the San Francisco Bay area in Califor-
nia, Silicon Valley has become the most celebrated technology hub, creating the space and framework for ideas
to become groundbreaking companies by attracting entrepreneurs and investments. [5]
Silicon Valley’s success is a story that provides insights and lessons to those concerned with the formation of
other startup ecosystems. In order to understand the Valley’s development, it is important to explore its historical
background. [6]
What Is An Ecosystem?
Startups, as defined earlier, have ecosystems of their own.
Startups operate within a web of interconnected players. They
are founded by entrepreneurs, accelerated (in some cases)
by accelerators, funded by venture capital firms and angels,
they sell their product to customers, and later on get acquired
by larger corporations. The previous statement is an oversim-
plification of the very interconnected and complex systems
within which startups operate. The players are plentiful and
the possibilities for their interactions are limitless. We will
therefore add one extra dimension to the original question:
“What is a startup ecosystem?”
Silicon Valley is hailed as the holy grail of startup ecosystems. By understanding Silicon Valley and how it evolved over the years to
become the uncontested startup launch pad, we can better understand the different factors that contribute to progress within ecosys-
tems in general .
A startup ecosystem is the complex and interconnected system within which startups exist and operate.
Silicon Valley: An Introduction
Historical Background
Google defines an ecosystem as a complex network
or series of interconnected systems.
Silicon Valley has become a sustainable entity, playing a
positive role in the economy and setting the stage for future
generations of success. Over the last two years alone, the tech
region just outside of San Francisco has accounted for nearly
half of all startup company exits. Silicon Valley tech companies’
total GDP comes to a whopping $535 billion, besting the GDP
average for North America at $430 billion.[12]
The area plays host
to between 14,000 and 19,000 active startups.
Today, Silicon Valley is the ecosystem that many aspire towards;
entrepreneurs want to found their companies in the Valley,
investors want to invest in the Valley, and cities want their
ecosystem to reflect the Valley’s success in creating impact for
the economy. The report aims to dissect the success of an eco-
system, and by looking at the case of Silicon Valley, the mother
of all startups, we can easily extract three dimensions from its
success: People who believe, right timing and the availability
of resources
Silicon Valley Today
William Shockley, a scientist who worked on a new semicon-
ductor device to control and amplify electric signals, decided
to move to the Bay Area to start a semiconductor company in
1956.[7]
Such a decision was strange for the Bay Area, as there
were no opportunities for financing, customers, or suitable
employees.[8]
Shockley took it upon himself to meet with US
institutions to connect with graduates, and placed ads in aca-
demic journals to recruit employees. He hired eight promising
engineers with the average age of 30. Although Shockley’s
company shut down a few years later due to bad management,
the engineers decided to keep working together as a team, but
were unsure in what form.
They approached a fellow banker, Arthur Rock, who convinced
them to create a firm and look for financing opportunities on
the East Coast. It took Arthur Rock 35 trials to get funding.[9]
A
serial entrepreneur, Sherman Fairchild, finally funded them to
form Fairchild Semiconductor in 1957.[10]
Fairchild helped them
establish a contract with IBM, which heightened their credibility
and opened up avenues to military sales. By 1960, “Fairchild
recorded sales of $21 million and was the eighth largest player
in its industry. The company also began production of the first
integrated circuit.”[11]
As a result of the success of Fairchild Semiconductor, “spinoff’
businesses began to emerge in the Bay Area. A spinoff is
the “creation of an independent company through the sale or
distribution of new shares of an existing business or division of a
parent company.” For example, Fairchild employees founded new
computer chip companies or firms to produce glass components,
which were then used by Fairchild. In 1961, four of the eight
engineers involved in starting Fairchild gave Rock funding to
start the Bay Area’s first venture capital firm. It was therefore
the growth of the local computer chip industry that prompted
the creation of Silicon Valley.
The cycle of spinoffs continued with the founding of Intel by
Robert Noyce, one of the original eight Fairchild engineers. He
supported Steve Jobs with advice, and later Jobs advised Face-
book founder Mark Zuckerberg. Another Fairchild executive, Don
Valentine, invested in Apple, and then started Sequoia Capital,
an important venture capital firm in the Bay Area.
This fascinating history of Silicon Valley highlights a very clear
concept: with the right people, environment, and timing, a start-
up ecosystem goes beyond the “first generation” of founders. It
also serves as a case study, allowing us to understand what key
performance indicators we need to measure in order to evaluate
the evolution of startup ecosystems in general.
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The drivers of an ecosystem’s evolution are the
individuals and institutions moving it forward. The
Drivers of Evolution map provides an overview of the
stakeholders in an ecosystem, providing an easy way
to visualize and understand the context in which
startups are operating in. Drivers may include prominent
venture firms, governmental agencies involved in policy,
startups feeding the ecosystem with talent, universities
spearheading innovation and/or any other major player
making a dent in the playing field.
1. Drivers Of EvolutionECOSYSTEM FRAMEWORK
Education/
Training
Competitions
Funding
Financial
Institutions
Spaces
Accelerators/
Incubators
Startups
Research
Governmental
Institutions
Media/
Promotion
Support
Units
1. Drivers Of Evolution 3. Evolution As A Function Of Time
2. Evolution As A Function Of Space
Through deconstructing Silicon Valley’s success into three key elements (i.e people, time and spatial resources) we have a better
understanding of what it will take to construct other ecosystems. This leads us to our ecosystem framework, a framework that aims
to dissect an ecosystem’s development status by looking at it through three different, and equally important, lenses
The institutions and individuals driving an ecosystem forward are represented in the “Drivers of Evolution” map, where they are
grouped into different categories.
We’ve identified four main stages of growth an ecosystem undergoes and they are represented in “Evolution as a Function of Time”
graph.
Finally, the resources available to ecosystem stakeholders based on their geographic location, also referred to as spatial resources
are represented in the “Evolution as a Function of Space“ graph.
Exits
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Capital Resources
These refer to the total amount of funding opportunities available in a given ecosystem, as well as how acces-
sible the funding is to entrepreneurs. Examples include venture capital firms, government funds, grants, loans,
and funding programs such as accelerators.
Government Budget Balane %GDP
Gross National Savings %GDP
Inflation, Annual % Change
General Government Debt, %GDP
Country Credit Rating, 0-100 Best
Venture capital availability
Governance
This includes the strides in leadership that move an ecosystem forward and make it more hospitable to busi-
ness. Examples include governmental policies, national agendas, local leaders, and activists.
Diversion of public funds
Wastefulness of government spending
Burden of government regulation
Transparency of government policymaking
Business costs of crime and violence
Reliability of police services
Strength of auditing and reporting standards
Efficacy of corporate boards
Protection of minority shareholders’ interests
Strength of investor protection
Infrastructure
This refers to all the elements that facilitate the success of a startup ecosystem, such as support units (accel-
erators, incubators, co-working spaces), transportation, and Internet.
Quality of overall Infrastructure
Quality of Roads
Quality of railroad Infrastructure
Quality of port infrastructure
Quality of air transport infrastructure
Quality of electricity supply
Mobile telephone subscription/100 pop
Markets and Networks
Markets concern both the size of the local market and an ecosystem’s access to other markets, and their size.
Networks refer to the connectivity of the country, both internally and outside its borders. Factors to consider
here include the size of an ecosystem’s diaspora population, size of neighboring markets, and size of local
markets.
Intensity of local competition
Extent of market dominance
Effectiveness of anti-monopoly policy
Effect of taxation on incentives to invest
Total tax Rate, % Profits
No. procedures to start a business
No. days to start a business
Prevalence of trade barriers
Trade tariffs, % duty
Knowledge Resources
These knowledge resources are all the resources related to increasing the knowledge generated and
distributed in an ecosystem. Examples include research and development centers, universities, and
corporate innovation labs.
Capacity for innovation
Quality of scientific research institutions
Company spending on R&D
University-industry collaboration in R&D
Gov’t procurement of advanced tech products
Availability of scientists and engineers
PCT patents, applications/million pop
Willingness to delegate authority
Human Resources
Human resources are defined by the quality and quantity of people in the ecosystem. This includes, but
is not restricted to, the levels of education, number of graduates, fields of specialization, and level of
professional expertise of the ecosystem’s workforce.
Secondary education enrollment, gross %
Tertiary education enrollment, gross %
Quality of the education system
Quality of math and science education
Quality of management schools
Internet access in schools
Availability of research and training services
Extent of staff training
THE PILLARS IDENTIFIED IN THIS REPORT ARE AS FOLLOWS:
2. Evolution As A Function Of Space
Prevalence of foreign ownership
Business impact of rules on FDI
Degree of customer orientation
Imports as a percentage of GDP
Burden of customs procedures
Exports as a percentage of GDP
Domestic market size index
Foreign market size index
Fix telephone lines/100 pop
Int’l Internet bandwidth, kb/s per user
Mobile broadband subscriptions/100 pop.
Fixed broadband Internet subscriptions/100 pop.
Firm-level technology absorption
Efficiency of legal framework in challenging regs
Startups require specific infrastructure and resources to be available in order for them to thrive. In this section, we group the differ-
ent categories of resources that influence an ecosystem’s success into six resource groups.
The resource groups constitute an ecosystem’s vitals, what it needs to thrive. Each group is reflects by the geographical realities
of an ecosystem – in other words, the resources available to an ecosystem as dictated by the space it exists in. For example, if an
ecosystem is located in a city with a high tech university density, then the knowledge and talent resources available for its startups
are abundant i.e it will score high on these two resource groups.
Each resource group represents all the sub-resources we have identified as relevant for a startup ecosystem and specific to that
resource group. We use relevant sub-resource indices as indicators for scoring each resource group.
Each resources group is scored from 0-10 using an internal model for performance scale. 0 means the resources available are not
ideal for a startup ecosystem to flourish, 10 means they are optimal.
Each of one of the six main identified resource group score is expressed numerically (0-10) in the following sections.
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The grassroots stage is the very beginning of an ecosystem. It
is a period of organic activity usually generated by the passionate
leadership of a few individuals within the ecosystem.
Key drivers at the grassroots stage could be the first startup
(Silicon Valley) or first accelerator (Lebanon), or even a series
of events, such as Startup Weekend in Tehran, that lead the
movement. Very little funding and few venture capital firms are
present at this phase. The majority of the funding is a direct result
of bank loans, angel investors, and the three F’s (Family, Friends
and Fools). At this stage of an ecosystem’s development, it is far
too early to even mention exits or Series A investments.
3. Evolution As A Function Of Time
Characteristics:
•• Highest density of venture capital
firms
•• Highest investment numbers
•• Unicorns
•• Exit Valuations at $50 million to $1
billion
•• High number of research and
development centers
•• Headquarters of top accelerators
and incubators worldwide.
Intervention Stage
Regional Hub
International Hub
An ecosystem is in a continuous cycle of growth. Examining an ecosystem without bringing into context its particular stage of growth is
turning a blind eye to one of the most important factors for proper evaluation: time. No two startup ecosystems were created alike, but
they do undergo very similar cycles of development, allowing us to identify four stages of growth for ecosystems:
Characteristics:
•• Increased investment
•• Increased number of Startups
•• Increased number of venture capital firms
•• Increasednumberofsupportprograms
(competitions,accelerators)
•• Towards the end of this phase we start
noticing small exits in the range of
$ 5-30 million.
An ecosystem becomes a regional hub when it is the epi-
center of its region. For investors, this ecosystem is where
they will establish their funds and offices to access the rest
of the region. For entrepreneurs, it is the city in which they
will base their headquarters to reach the surrounding market.
International accelerators and incubators will be quick to set
up shop there. It becomes a hub of talent, funding, and high
profile networking.
Characteristics:
•• Market access point (due to
infrastructure)
•• Regional location to set up shop
•• Regional money distributed out of this
ecosystem
•• Exits at $50-400 million
•• Very few unicorns
•• International accelerators and venture
capital firms setting up shop.
During this phase we can see a slow surge in seed investment
as the movement gains traction and players begin to attract the
attention of corporations and governments.
At the beginning of this phase, it is possible to pinpoint a few key
startups and their stages. By the end of this phase, the number of
startups at seed stage has increased significantly.
Characteristics:
•• A few angel investors
•• Practically no venture capital firms
•• A handful of startups
•• No exits
•• Independent startup activities increasing
•• Activists and influencers start to attract attention
Intervention stage follows the grassroots stage, as growth
becomes slightly less organic in this period. At this point,
the startup movement in a particular ecosystem has
begun to make some noise. Startups that may previously
been ridiculed or ignored are able to secure early stage
funding and have a few employees under their wing. More
students are asking their professors about startups and
unicorns, and accelerators are receiving more applications
by the day. Corporations and governments notice the
commotion and want to capitalize on what already exists.
At this stage, governments step in with policy changes
and funds, or corporations step in with substantial support
programs. The intervention could also be that a
startup emerged as a large success, and
overnight a few founders have
millions to reinvest into
growing the local
ecosystem.
Very few ecosystems have become international hubs.
These are Silicon Valley and New York.
An ecosystem becomes an international hub when it be-
comes a center of international innovation, as its startups
are creating solutions that address global problems. What
we usually see with international hubs is that they
specialize in a specific vertical to innovate,
and they become the global lead-
er in that specific field.
Grassroots Stage
[CC BY-NC-ND]

24 25
Rich in human capital, Lebanon’s youth maintain one of the
highest educational attainments in the Arab world, with a tertiary
enrollment rate of 48 percent.[13]
However, this educational at-
tainment does not translate into lucrative economic opportunities
within Lebanon, which are made complicated by the ongoing po-
litical instability that dominates the country’s everyday functions.
While Lebanon’s most recent unemployment data points to 11
percent,[14]
more alarming is the youth unemployment rate which
stands at 20 percent,[15]
for those between the ages of 15 and 24,
compared to the world average of 13 percent. This results in many
youth looking for job opportunities outside of Lebanon.
Lebanon is a small country of 4 million citizens and a large refugee population, including the recent presence of 1.1 million registered
Syrian refugees. It currently has no diplomatic relations with the state at its southern border, and has a rather complex and historical
one with its northern neighbor, Syria. Lebanon witnessed a 15-year civil war from 1975 to around 1990, ultimately resulting in quadruple
the number of Lebanese citizens living outside of Lebanon creating a wide and tightly connected diaspora network across the globe,
estimated at 16 million people.
Mapping Lebanon
Unemployment rate data - 2013
The past five years have witnessed a new wave of business
in Lebanon: startups. Entrepreneurship support units are now
present, startups have successfully exited, and funds have been
multiplying. Despite all the factors working against Lebanon’s
progress, the entrepreneurial ecosystem is remolding the
Lebanese economy.
Banque du Liban’s Intermediate Circular 331 (BDL C331) is an
opportunity to boost Lebanon’s knowledge economy sector and
support human capital, and has the potential to save the country
from economic stagnation. Lebanon is an ideal candidate for a
knowledge economy, which is an economy typically directed at the
production, distribution, and use of knowledge and information.
The Central Bank guarantees 75 percent of local banks’
investments in the knowledge economy through direct startup
equity investment or indirectly through startup support entities,
reducing the risk of the investment by mitigating the potential
losses and reducing them to 25 percent. BDL C331 is designed to
diminish risk for local banks and does so by dictating the banks’
portfolio diversification. Local banks can invest up to 3 percent
of their capital in startup support entities, funds, or directly into
startups themselves. Additionally, a bank can invest up to 10
percent (of its 3 percent) in any one startup, thus spreading the
risk.
Local banks can also receive a seven-year interest-free credit from
the Central Bank, which can be invested in treasury bonds with an
interest rate of 7 percent. In return, the bank commits to investing
in the knowledge economy. While the banks take on 50 percent of
the risk, they are entitled to 75 percent of any profit made, making
participation in BDL C331 an attractive prospect.
By making funding accessible, BDL C331 aims to both retain
local talent and to attract expatriate talent to set up shop in
Lebanon, in hopes of putting an end to the brain drain the nation
has witnessed in the aftermath of the civil war. The funds will be
primarily deployed to develop a technological and digital sector in
the country.
The main objective of institutionalizing the Intermediate Circular
331 is to move Lebanon towards a knowledge-based economy
and eventually create job opportunities to battle the 20 percent
youth unemployment rate. To ensure the circular is appropriately
used, the Central Bank has laid down ground rules for qualifying
companies. The company should be a Lebanese joint-stock
company with nominal shares, with its activities supporting the
knowledge economy, prompting creative intellectual skills. It
should also have an enriching impact on the economy, social
growth, and job creation in the Lebanese market.
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
35
39
42
47
50
57
61
72
78
86
91
99
105
113
129
144
161
177
190
198
200
Number of companies
operating in ICT per year
in Lebanon since 1994
Source: IDAL 's Directory of ICT Companies
Lebanon-
2013
11%
between the age of
15 & 24 (World)
13%
between the age of 15 & 24
(Lebanon)
20%
[CC BY-NC-ND]

26 27
MAP OF LEBANON’S
ECOSYSTEM
> Alt City
> Beirut Digital District
> Co-working 961
> FabLab Beirut
> Flat6Labs
> Speed@BDD
> UK Lebanon Tech Hub
Spaces
Accelerators/
Incubators
Competitions
> Bader Startup Cup
> Cartier Women’s Initiative Awards
> Hyundai Startup Competition
> FCM
> Startup Campus
> Global Social Venture
> Femme Francophone
> Intel Challenge ME IoT
> MIT Enterprise Forum Arab Startup
Competition
Funding
> Abraaj Group
> Beirut Angels
> Berytech Fund
> Leap Ventures
> Lucid Investment
> Middle East Venture
Partners
> Saned Partners
> Y Ventures
> B&Y Venture
Partners
> IM Capital
Research
> Endeavor Insight
> Lebanon For Entrepreneurs
> Startup Ecosystem
Think Tank
> Wamda Research Lab
Financial
Institutions
> Top Banks as
measured by total
assets & market
capitalization
> Kafalat
Governmental
Institutions
> Ministry of Economy
> Ministry of Trade
> Investment Development
Authority of Lebanon
Media/
Promotion
> ArabNet
> BDL Accelerate 2015
> Entreprenergy
> Startup Megaphone
> StepFeed
> Wamda
Education/
Training
> Amideast Entrepreneurship
Institute
> BAU Center for Entrepreneurship
> LAU Institute for family
& entrepreneurial Business
> Le Wagon
> Samih Darwazah Center for
Innovation
Management & Entrepreneurship
at AUB
> Bootcamp
Support Units
> Beirut Creative
Cluster
> Berytech
> Bader Young
EntrepreneursProgram
> Endeavor Lebanon
> LebNet
Exits
> Diwanee
> Shahiya
Drivers Of Evolution
The Lebanese ecosystem has been slowly developing
since the beginning of 2001. Over the years, the
stakeholders guiding the ecosystem went from few
to many. The stakeholders that make up the current
Lebanese startup ecosystem are represented below
in the Drivers of Evolution Map, grouped in their
respective categories.
[CC BY-NC-ND]

28 29
Evolution As A Function Of Time
Evolution As A Function Of Space
To have a better idea about the resources available for the average entrepreneur operating out of Lebanon, we will examine it’s six
resource pillars represented in the Evolution as a Function of Space framework. We can very quickly notice that the Human Resourc-
es rank higher than the other indices.
To better understand the state of the Lebanese ecosystem we must understand the stage of growth it is at. The ecosystem first
began to flourish in 2012, when a group of young men came together and founded Lebanon’s first Accelerator program, Seeqnce. [17]
The program had limited funding and resources but managed to accelerate the most prominent startups in the market today. Seeing
that the momentum the grassroots movements has initiated would soon be extinguished if it weren’t supported by something much
bigger, the Central Bank founded Circular 331. The BDL Circular 331 has increased the amount of funding available for the startup
ecosystem drastically over the last two years, and as a result we observe an increase in the number of startups being founded, the
amount of investments being deployed and the number of institutions supporting startup activity. Therefore it becomes clear that
Lebanon falls at the very beginning of the Intervention Stage.
Grassroots Stage
Intervention Stage
Regional Hub
International Hub
[CC BY-NC-ND]

30 31
Intermediate Circular 331
dated August 22, 2013
MECHANISM
More About BDL Intermediate
Circular 331
[18]
[CC BY-NC-ND]

33
A Trip Around
the World
ZOOM OUT
A large part of this report is identifying what successful ecosystems
have done, and how Lebanon can learn from their experience. The
following section, A Trip Around the World, provides a snapshot of
each of the ecosystems the report extrapolated best practices from.
Each city has its own section with a general introduction. Each
section features an Evolution as a Function of Time graph that
highlights the point of evolution an ecosystem is currently at. Each
section also features an Evolution as a Function of Space graph that
showcase the city’s resource groups and their respective scores and
finally it features a Drivers of Evolution map. The Drivers of Evolution
map provides an overview of the different ecosystem drivers and
stakeholders but is in not meant to be comprehensive; it serves as
general a snapshot.
[CC BY-NC-ND]

35
Turkey, the crossroads of Europe and Asia, has a population
of 77.7 million, with half of it under the age of 30.7. When
comparing Turkey to EU countries, it has the fourth largest
labor force, totaling around 28.1 million.[19]
The tertiary
education enrollment rate is around 70 percent.[20]
Turkey’s entrepreneurship scene is vibrant and has gained
momentum over the past two years, especially in the
historical city of Istanbul. Istanbul’s geopolitically
strategic location between Asia and Europe, combined
with the holistic startup support, puts the city on the
forefront as a regional Euro-Asian hub for startups and
investors to converge. The way Istanbul managed to
capitalize on its geography to create an entrepreneurship
and innovation hub provides many insights for learning.
Istanbul
Coworking
Spaces
> Republic of Turkey SME
Development Organization
(KOSGEB)
>The Scientific and
Technological Research Council
of Turkey (TÜBİTAK)
> TC Sanayi ve Teknologi
> Bakanlığı
> TC Başbakanlık Hazine
> Müsteşarlığı
Angel
Networks
> Istanbul Startup Angels
> BRC
> Burned Business
Angels (BUBA)
> Galata Business Angels
(GBA)
> MYP
> Şirket Ortağım
> Labx
> Bayraktar & Partners
> Bahariye Melek Yatirim
> Keiretsu Forum
> TEB Melek Yatirim Fonu
> TR Angels
> Starters Hub
> Kolektif House
> Urban Station
> Yazane
Exits
> Yemeksepeti
> Gittigidiyor
> Markafoni
> Pozitron
> SadeceHosting
> Mikro-Ödeme
> Mackolik
> JoyGame
> StartupBootcamp
Istanbul
> ITU Cekidrek/Gate
> E-Tohum
> Koç Incubator
> Özye Incubator
> Pilott
> Viveka
> Fit Startup Factory
> Founder Institute
> Inventures
> Embryonix
> CAP
> Gemim
> Garanti Partners
Accelerators/
Incubators
Venture
Capital
> Starters Hub
> Early Bird
> HummingBird
> 212
> Revo Capital
> Vestel Ventures
> IDA Capital
> Doğa Girişim
> iLab
> Sankonline
> 3TS Capital Partners
> TRPE Venture
Partners
> Inventram
> Innovent
> Aslanoba Capital
> String Ventures
Grassroots Stage Intervention Stage
Regional Hub
International Hub
10-20 VC firms
5-10 Exits
100-200 Startups
Governmental
Initiatives
[CC BY-NC-ND]

37
Singapore’s success has not been accidental; it is the
culmination of decades of public planning. As early as the
1960s, the post-independence Singaporean government
committed to becoming a knowledge-based economy fo-
cused on innovation technology.
At the time, multinational corporations (MNCs) were
attracted to the labor-intensive sectors. By the 1970s,
there was a much bigger national talent pool, and the
workforce was shifting from blue to white-collar. MNCs had
transferred their technological operations to Singapore,
fostering the development of human resources to build and
expand new technologies.[21]
With an educated work force,
Singapore began attracting skill-intensive industries such
as electronics and petrochemicals, and further technologic-
al development fostered advancements in the biomedical
sciences and innovation enterprises. Singapore is notable
as a small country of 716 square kilometers that managed
to transform its post-war conditions into an entrepreneur-
ship and technology hub.
Singapore
Competitions
& Hackathons
> Angel Hack
> BAwehack
> Echelon
> Imagine Cup
> Lean Startup Machine
> Seedstars World
> SITF Awards 2015
> Startup Singapore
> Startup Weekend
> UP Singapore
Governmental
Initiatives
> Ace
> ACRA
> EDB Singapore
> Enterprise one
> IDA
> ie Singapore
> mda
> Ministry of Manpower
> National Research Foundation
> Spring Singapore
Media/
Promotion
> E27
> Bloomberg
> BeSuccess
> TechCrunch
> TechinAsia
> The Wall St. Journal
Training
> Alpha Camp
> Draper University
> General Assembly
> Hyper Island
> The Testing Ground
> Founders Institute
Education
> National University of
Singapore (NUS)
> Nanyang Technological
University (NTU)
> Singapore Management
University (SMU)
> Singapore University of
Technology and Design
(SUTD)
> SITF
> SCAPE
> Ace
> The Working Capitol
> WH
> Cowork@SG
> SpringBoard
> Hackerspace.sg
> Impact hub Singapore
> Pug-In@BIK71
> The Co
> Woolf Works
> Collective Works
Spaces
Accelerators/
Incubators
> Biofactory
> Clearbridge Accelerator
> Founder Institute
> iAxil
> ideas.inc
> Joyful Frog Digital
Incubator
> Life Sreda VC
> Rockstart Accelerator
> SPH Plug &Play
> Startup Focus
> The Co-Foundry
> The Unilever Foundry
> Unframed
Unicorns
> FlipKart
> Garena
> Grab Taxi
> Lazda
Venture
Capital
> Intel Capital
> 500 Startups
> Sequoia Capital
> Innov8
> SBI Ven Capital
> Rakuten Ventures
> New Asia Investments
> Majuven
> NSI Ventures
> Golden Gate Ventures
> Jungle Ventures
> East ventures
> Infocomm Investments
> IMJ Investment Partners
> Gree Ventures
> Fenox Venture Capital
> Digital Media Partners
(DMP)
> Monk’s Hill Ventures
> Vertex Venture
Regional Hub
International Hub
50-100 VC firms
20-50 Exits
> 1000 Startups
[CC BY-NC-ND]

39
There is a sort of eccentricity to Berlin that is difficult to
find anywhere else. Young people, vibrant art, and crea-
tivity all dominate the city, not to mention its rising tech
scene. After Berlin’s wall was destroyed in 1989, the city’s
lower rents combined with its vibrant art and music scene
attracted young people to take up residence.[22]
Berlin
managed to channel its central location, high quality of life,
and artistic energy towards supporting startups, attracting
talent, and drawing ideas and investors.
Berlin
> Sharedesk
> Ahoy! Berlin
> Mobilesuite Berlin
> Betahaus
> SuperMarkt
> Idea Camp
> Rainmaking Loft
> Sanktoberholz
> Café Nest
> Agora Collective
Coworking
Spaces
> German Startups
> Group Berlin AG
> Axel Springer Plug
and Play Accelerator
> Berlin Startup
Academy
> Team Europe
> Hitfox
> Epic Companies
> MCUBE
> The Factory
> Hardware.co
> Hub:Raum
> IQ Consult
> Microsoft Ventures
> Accelerator Berlin
> Project A Ventures
> Rocket Internet
> Project Flying
> Elephant
> StartupBootCamp
> You is Now
Accelerators/
Incubators
> Business Angels Club
> Berlin-Brandburg
> Mas Angel Fund
Angel
Networks
Regional Hub
International Hub
10 -20 VC firms
5 -10 Exits
200 - 500 Startups
Venture
Capital
> SalesForce Venture
> West Tech Ventures
> Blue Yard Capital
> Cherry Ventures
> Dresselhaus Ventures
> e.ventures
> German Startups Group
> Join Capital
> B-to-V (Brains to
Venture)
> Bertelsmann Digital
Media Investments (BDMI)
> Berlin Venture Partners
> Heilemann Ventures
> Paua Ventures
> Point Nine Capital
> Westtech Ventures
> XLHealth
> Seedcamp Berlin
> Earlybird
> Hasso Plattner Ventures
(HP Ventures)
[CC BY-NC-ND]

41
Inspiration, imagination and energy have always made New
York City a space constantly boiling with fresh ideas that
attract valuable and diverse talent, cementing it as a global
hub of art, media, fashion, and finance. The now-popular-
ized “Empire State of Mind” has inspired many to flock to
the city in pursuit of their ambitions and dreams, and many
argue that the city’s “have to make it” attitude is exactly
what keeps it alive and pulsing with new business ideas.
The way New York City proceeds to create innovative busi-
ness ideas could be a stepping-stone for Lebanon to learn
from.
New York City
> Betahaus
> Agora Collective
> Sankt Oberholz
> Openers
> Axel Springer Plug›N›Play
> Factory
> Rainmaking Loft
Coworking
Spaces
> Pandodaily
> AVC
> Business Insider
> BETABEAT
> Bits
News
> NYC Tech Meetup
> Columbia Venture
Community
> NY Tech Women
> Uncubed NYC
> NY Venture Community
> Digital Dumbo
> Startup Digest
> GARYSGUIDE
> SmashSummit
> Feast Conference
> Brooklyn Beta
> Likemind
> Ignite NYC
Events &
Networking
> First Growth Venture
Network
> Dreamit Ventures
> Startup Health
> Entrepreneurs roundtable
Accelerator
> FinTech Innovation Lab
> SeedCamp
> NYC Seed
> Founder Labs
> BluePrint Health
> NY Digital Health
> Accelerator
> TechStars
Accelerators
> Prehype
> Betaworks
> Soho Tech Labs
> 212Media
> FictiveKin
> Pratt Design Incubator
> DE-DE
Incubators
> Accel Partners
> Bain Capital Ventures
> Bessemer
> Canaan Partners
> FlyBridge
> GreyCroft
> IA Ventures
> Insight Venture Partners
> OAK Investment Partners
> Polaris
> rho Capital Partners
> RRE Ventures
> Rtp Ventures
> SoftBank Capital
> Spark
> StarVest
> Thrive Capital
> Tiger Global
> Tribeca Venture Partners
(TVP)
> VAIZRA
> Venrock
> Warburg Pincus
Venture
Capital
> 500 Startups
> Betaworks
> Contour Venture Partners
> Lerer Ventures
> Metamorphic Ventures
> Advancit Capital
> First Round Capital
> Zelkova Ventures
> Eniac Ventures
> High Peaks
> QUOTIDIAN
> Great OaksBox Group
> Box Group
> DFJ Gotham Ventures
> Bold Start
Seed
stage
investors
Regional Hub
International Hub
> 100 VC firms
>150 Exits
>1000 Startups
[CC BY-NC-ND]

43
Known worldwide for its historical heritage, creative
potential, and its oft-noisy streets, Egypt is home to 90
million people. Cairo has a metropolitan population of nearly
22 million, making it the largest city in Africa and the Middle
East, and the sixteenth largest metropolitan area on Earth.[23]
Egypt has long been at the forefront of music, film, media
and literature, positioning it as a regional and worldwide
cultural influencer. Young Egyptians are relatively well
educated and inspired by their heritage, and are an active
creative force in the region that plants organic seeds for a
startup ecosystem to emerge.
Cairo
> 302 Labs
> Al Maqarr
> Ice cairo
> Innoventures Startup
> Circus
> Rasheed 22
> The District
> TIEC
> Penguin Square
Coworking
Spaces
> AUC V-Lab
> Flat 6 Labs
> Misr El Kheir Foundation
> Injaz Egypt
> Innoventures
> Juice Labs
> Kamelizer
> Nahdet el Mahrousa
> Plug and play Egypt
> Shekra
> Tahrir 2
> TIEC
Accelerators/
Incubators
Competitions
> AUC Entrepreneurship Society
- Business Plan Competition
> AUC V-LAb
> Egypreneur
> Startup Egypt (Injaz)
> Startup Giza
> Startup Grind
> Startup MENA
> The Entrepreneur Accelerator Program (TIEC)
> University Run- Student Run Competitions
Governmental
Initiatives
> Social Fund for development
Technology Innovation and
Entrepreneurship Center
> Bedaya
> Mashrou3ak
Exits
Otlob
SySDsoft
Fawry
Angel
Networks
> Cairo Angels
> KI Angels
Venture
Capital
> 138 Pyramids
> Ideavelopers
> Innoventures
> Kamelizer
> Sawari Ventures
> Tamkeen
Grassroots Stage
Intervention Stage
Regional Hub
International Hub
5 - 10 VC firms
5 - 10 Exits
100 - 200 Startups
[CC BY-NC-ND]

45
Iran has long made the headlines as a state subject to
international security and economic sanctions. In a country
that intrigues people outside of its boundaries and holds a
largely untapped market, innovative minds with incredible
potential seek to create their own Tehran Valley.
Iran’s Internet and mobile phone penetration rates of 55
percent and 110 to 143 percent, respectively, are among the
highest in the region. These figures suggest a tech savvy
young population.[24]
Under these conditions, entrepreneurship ecosystem play-
ers in Tehran are mobilizing to form the right conditions for
a startup ecosystem to emerge.
Tehran
> Maps
> Avatech
> Dimond
> Trigup
> Bardia
> TAC
> Tehran Hub
> Efarda Coworkingspace
> Coworking space 404
> Shariksho (Online share space)
Spaces
Accelerators/
Incubators
Competitions
> Startup Iran
> Seed Stars
> Slush
> Sharif VCCUP
Governmental
Initiatives
> Hi- Tech Development Fund
> Innovation Accelerator Center
> Pardis Technology Park
> Vice-President for Science and
technology
Events
> Startup Grind
> Startup Weekend
> Startup Spark
> Lean Startup Machine
> 20TA30
> Hamfekr
Media/
Promotion
> Peyvast
> Asreertbat
> Kasbokar
> Tafahom
> Techly.co
Education/
Training
> University of Tehran
> Sharif University of Technology
Exits
> Avabook
> Picuu
> Zoodfood.com
Venture
Capital
> Iratel Ventures
> PSIG
> SHENASA
> Sarava
Grassroots Stage
Intervention Stage
Regional Hub
International Hub
0 - 5 VC firms
0 - 5 Exits
50 - 100 Startups
[CC BY-NC-ND]

47
Ruled for 25 years by General Augusto Pinochet after a
coup against socialist president Salvador Allende, Chile
witnessed its fair share of civil and political unrest, and a
20-year economic depression that began in the 1970s. Pino-
chet’s regime, which still has the approval of most parties,
left behind a legacy of the free market policies, though
these were very harsh when first implemented.
After years of resistance, political instability, and civil
insecurity, Chile underwent a political revival at the turn of
the century, and now ranks twenty-first in transparency in
the international corruption index.[25]
With a stable country, a young population, and the will to
change Chile’s image internationally, Chile’s government
created the Startup Chile Initiative in 2010, or what James
Adams, former dean of Stanford Engineering school, calls
“the deal of a lifetime.”
Santiago
> Co-Work LatAm
> Corfo (Biblioteca)
> Exosphere
> IF Chile
> Justpeople
> STGO Makerspace
> UC Innovación Anacleto
> Angelini
> Urban Station
Workspaces
& Innovation
Centres
> 3ie
> Austral Incuba
> Chrysallis
> Emprende FCh
> Incuba UC
> Incubatec
> Innovo
> UDD Ventures
> Wayra
Seed
Accelerator
Governmental
Initiatives
> Corfo
> Startup Chile
Media/
Promotion
> AndeasBeat
> DoceTips
> El Definido
> El Diaro Financiero
> El Mercurio
> El Tercera
> Fayerwayer
> Innovacion.gob.cl
> PulsoSocial
> The Santiago Times
Training
> Academia De la Felicidad
> ASECH Etapa O
> Founder Institute
> Santiago Startup Essentials
Investor
Networking
> Avonni
> Chilean Investors Forum
> CIE Chile
> Emprendo Verde
> Endeavor Chile
> Erase Fundacion Chile
> Mentores Por ChileAngel Networks
> Chile Global Angels
> DaDNEOS
> Ignacio Canals
> Jean Boudeguer
> Magma Partners
> Pablo Viojo
> Santiago Angels
Public Economic
Development
> Preyecto Red
> ProChile/Contact Chile
> Sercotec
> Al Gramo
> Betazeta
> ComparaOnline
> Crumplo
> Cuponatic
> Goplacelt
> HappyShop
> Mediastream
Success
Stories
Venture
Capital
> Aurus VC
> Austral Capital
Partners
> EQUITAS Capital
5 - 10 VC firms
5 - 10 Exits
100 - 200 Startups
Grassroots Stage
Intervention Stage
Regional Hub
International Hub
[CC BY-NC-ND]

49
London is the epicenter of diversity, finance, ideas, and
implementation. Seventy-five percent of the top 500 global
companies[26]
are based in London, [27]
a city that sees 1,000
new tech startups develop per month.[28]
Silicon Round-
about, an organic tech city, formed progressively in East
and Central London in 2008, and later started receiving
governmental support. London is the third largest tech hub
after San Francisco and New York.
London is one of the most established financial sectors in
the world, accounting for 53 percent of European invest-
ment in the financial technology industry[29]
. Having lever-
aged its indigenous strengths and cluster formations, the
city grew into a tech hub centered around a robust fintech
industry, making it the “fintechopolis” of Europe. In 2013,
“47 percent of UK investment went into first-round deals
compared to 27 percent in Silicon Valley.”[30]
London
> Huckletree
> Google Campus
> Rainmaking Loft
> Central Working
> Winkley Studios
Coworking
Spaces
> Techstars London
> Wayra London
> Truestart
> Seedcamp
> StartupBootcamp
> Founders factory
> Entrepreneur first
> Bethnal Green Ventures
Accelerators
Competitions
> Growing Business Awards
> EDF Pulse Award
> Santander Universities 60 sec
> Cleantech Innovation Showcase
> Low Carbon Prize
> IE Venture Day
> Broadcast Video Expo
> UCL Bright Ideas
> Health Tech London
> UK Private Business Awards
> Innotribe Challenge
> The Responsible Business Awards
> Business Rocks Inov8
> Shell LiveWire Grand Ideas Award
> Digital E.Awards
> The Europas Awards
> VOOM
Governmental
Initiatives
> TechCity
> Enterprise Investment Scheme
> Grant for Business
Development
> The National DTI Grant for
Research and Development
> Entrepreneur Visa
> Business Bootcamps
> The Entrepreneur First
Venture
Capital
> Angellab
> Ardiadne Capital
> C4 Ventures
> BGF Ventures
> Dawn Capital
> DN Capital
> Downing Capital
> EC1 Capital
> Entrepreneurs Fund
> Frog Capital
> Forward Partners
> Firestartr
> Felix Capital
> IQ Capital Partners
> MMC Ventures
> London Venture Partners
> Notion Capital
> Index Ventures
> Atomico
> Accel Ventures
> Iris Capital
> Balderton Capital
> Highland Europe Capital
> Advent Venture Partners
Regional Hub
International Hub
> 100 VC firms
> 150 Exits
> 1000 Startups
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51
Finns are known for their sense of style, trendy coffee
shops, Angry Bird and advanced design and architecture
legacy that puts function over form. Finland was also
ranked 4th most competitive economy after Switzerland,
Singapore and the United States in the World Economic
Forum’s Global Competitiveness index 2014-2015 report.
Home to 1 in 5 Finns, small, compact and stylish, its capital
Helsinky is internationally applauded for highly innovative
initiatives in technology, design and entrepreneurship.
The support of government and decline of Nokia have been
major contributors to the establishment of Helsinki as one
of the major Tech hubs outside of Silicon Valley.
Helsinki
Coworking
Spaces
> Hub Helsinky
> Arctic Startup
> Minimum Viable Office
> Helsinki Think Company
> Startup Sauna
> Summer of Startups
> KoppiCatch Accelerator
> Cleantech Invest
> NewCo Helsinki
Accelerator
> Boost Turku
> Gorilla Ventures
> Vigo
> Lifeline Ventures
> Veturi Growth Partners
> Love of Technology
Strategy (Lots)
> Royal Majestics
> Newentures
> Vendep
> nnovatum Partners
> Founder Institute/
Helsinki
> AppCampus
> Boost Turku
> Hitseed
Accelerators/
Incubators
Venture
Capitals
> Finnvera
> Aboa Ventures
> Aura Capital
> Butterfly Ventures
> Camelco Capital
> Dasos Capital Oy
> EQT Partners Oy
> Helmet Business
> Mentors
> Innventure
> Vendep
> MHS Capital
> Conor Venture
Partners
Angel Networks
> Finish Business Angel Network
Education/
Training
> Aalto University
> Young Innovative
Companies
Grassroots Stage
Intervention Stage
Regional Hub
International Hub
50 - 100 VC firms
50 -100 Exits
500 - 1000 Startups
Governmental
Initiatives
> Start.Smart.me
> Vigo
> Tekes
> SITRA
> Finish Industry Investment
Events
> Slush
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52 53
Human Resources Challenges
Challenge 1: Mismatch between current skills in the market and
the skills startups ask for
Challenge 2: Not enough access to lawyers experienced at
dealing with startups and their unique structures
Knowledge Resources Challenges
Challenge 3: Lack of investment in research and
development
Challenge 4: Not enough opportunities for private sector
involvement in academia
Challenge 5: University and schooling systems in
Lebanon do not cater to the modern world’s talent needs
(entrepreneurship, innovation and tech knowledge). This
problem is twofold
A. Mismatch between skill of recent graduates and
today’s progressive market needs
B. Interdisciplinary interaction in universities are
limited among different departments
Markets and Networks Challenges
Challenge 6: Not enough marketing efforts targeting those
outside the ecosystem and internationally
Challenge 7: Need for access to larger markets
Challenge 8: Not enough private sector interest in startups,
creating an even smaller market
Challenges in the Lebanese Startup
Ecosystem
We invited Lebanese startup stakeholders to a series of roundtable sessions, which focused on exploring various challenges facing the
domestic startup ecosystem. This section synthesizes the challenges under the relevant ecosystem pillars.
Capital Challenges
Challenge 9: Not enough of the funding is being spent on
seed stage investments
Challenge 10: Lack of a strong business angel network
Governance Challenges
Challenge 11: Lack of alignment among the stakeholders
Infrastructural Challenges
Challenge 12: Lack of proper legal framework for:
Investment with a clear lack of laws ensuring the right
framework for the below:
(a) Shareholder Rights
(b) Preferred Shares
(c) Minority Shares
(d) Limited Partners Separation Laws
Establishing a company with a clear lack of laws ensuring the
right framework for the below:
(a) Equity Compensation Laws
(b) Bankruptcy Laws
(c) IP Protection Laws
Challenge 13: Long and lengthy process for establishing and
shutting down a company
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55
Lessons from around
the WorldBuilding successful startup ecosystems is not a science therefore agencies ven-
turing to build one face a significant amount of uncertainty. Exploring narratives of
already successful ecosystems can aid these agencies in devising plans. Successful
foreign ecosystems can inspire and educate us about solving our own core obsta-
cles. The following section has categorized the Lebanese core challenges under
ecosystem resource groups and extrapolates solutions to the Lebanese hurdles from
relevant international best practices.
HUMAN RESOURCES
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56 57
Short Term Fix
Create a cohort of lawyers, who have already assisted
startups in their many stages (incorporation, disputes,
acquisitions, IPOs, liquidations). The cohort will be made up
of Lebanese lawyers with the relevant experience, recom-
mended by startups and investors who have already worked
with them. The cohort will also feature international law-
yers based in the most common offshore incorporation des-
tinations. The cohort will then host a series of educational
workshops every quarter to educate the local lawyers about
startups and their unique structures and best practices.
Long Term Fix
The long-term fix has an educational dimension: include
Circular 331, startup structures, and best practices in
undergraduate and graduate law studies in local university
curriculums.
Short Term Fix
Lebanese students are making a name for their country
in the top tier universities of the world, across diverse
disciplines and fields. The short-term fix to remedy the
mismatch between the skill sets the startup ecosystem
needs and what is locally available is to attract that talent
back to Lebanon. In many cases, there are talented individ-
uals that already want to come back to Lebanon, but are
looking for an opportunity to make the leap. Almost like the
Chilean model for expats. An initiative should be created
to offer Lebanese talent of certain skillsets and experience
areas, such as UX designers, coders, and growth hackers,
the funding and incentives to return and found their own
startups in Lebanon.
Long Term Fix
As with Berlin, the long-term fix will be by-product of a
developing and growing ecosystem and talent flowing
inwards. The startups will grow and they will recruit more
talent, from within Lebanon or from outside. The key is to
make the inward movement as easy as possible by provid-
ing talent with very clear guidelines about relocating to
Lebanon, establishing a company in Lebanon and raising
funds through BDL Circular 331.
ATTRACTING INTERNATIONAL TALENT: CHILE
Chile’s government, along with its Ministry of Economy,
created the Startup Chile initiative to pave the way for a
knowledge economy in Chile and position it as a startup
hub in Latin America. Their aim was to change the mindset
of young Chileans and inspire them to become entrepre-
neurs with a global vision.
They were quick to realize that the only way the program
could take off was by importing talent from all over the
world, as Chileans did not have the skills and mindset to do
so just yet. They bet on Chileans following suit after being
inspired by interactions with international entrepreneurs
gravitating toward the region. The program brought in high-
class entrepreneurs from around the world and granted
them US $40,000 in funding, no strings attached (i.e. no
equity), space to work for six months, and soft landing
(company registration, residency, and a bank account).[31]
The program imported the relevant and right kind of talent
into Chile and has been hailed as one of the most success-
ful programs for attracting entrepreneurial talent to date.
Challenge 1
Mismatch between current skills in the
market and the skills startups ask for
Extrapolating success
into Lebanon
Challenge 2
Not enough access to lawyers experienced
in dealing with startups and their unique
structures
8 companies acquired
75 companies that participate in
other accelerators
50 million capital invested
10.000 applications
+18 000 entrepreneurs
Startup Chile Program Stats
+800 projects
+110 Applicants’ countries
65 entrepreneurs’ countries
CHURN OUT SPECIFIC NEEDED TALENT: BERLIN’S ROCKET
The founders of Rocket Internet saw the need to replicate
successful companies in emerging markets quickly. Founded
in 2007 and headquartered in Berlin, Rocket Internet both
imitates and churns out successful companies. Known as
the “copycat factory,” Rocket Internet is simultaneously a
venture capital firm and tech incubator. Its approach is to
identify prosperous Internet businesses and emulate their
approach toward emerging markets.[32]
The office space in
Berlin provides companies with space, access to investors,
marketing, and talent to grow, making it a locus of talent
and knowledge of emerging countries and their respective
networks.
Rocket Internet feeds the local ecosystems with a continu-
ous flow of talent. The company’s turnover rate is very high,
and their investment in training is high as well. Employ-
ees tend to stay for short periods of time, take what they
learned within Rocket Internet’s safe walls, and apply to
it to either their own startup or one they later join. Rocket
Internet serves more than just being a company that turns
ideas into successful companies - it also turns talent into
“startup-ready and hirable” talent for the whole of Berlin,
and talent is at the heart of any ecosystem’s success.[33]
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58 59
Knowledge
Resources
Challenge 3
DRASTICALLY SUBSIDIZING UNIVERSITY R&D CENTERS,
FINLAND
Finland has been consistently ranked first and second for
its development and funding of innovation and technology.
“The government allocates funding flexibly and across a
range of public and private players, most notably via Tekes
and Sitra—the national industrial R&D fund and the national
innovation fund, respectively.”[34]
Tekes is the most important publically funded expert organ-
ization for financing research, development and innovation
in Finland®. It not only provides funding for technological
advances, it supports service-related, design, business
and social innovations through working with top innovative
companies and research centers in Finland. The impact
that Tekes has created is significant; it funds some 1,500
business research and development projects, and almost
600 public research projects at universities and research
institutes. Tekes has fueled private, public and academic
investment and interest in innovation and technological
advances.[35]
Lack of investment in research and
development
Short Term Fix
The Intermediate Circular 331’s main objective is to move
Lebanon towards a knowledge economy, therefore any
activity that may create Intellectual Property can be guar-
anteed by the circular. This information may be well-known
among startups and the startup ecosystem but may not be
heard of yet by institutions and individuals outside this
circle. A short term fix is to educate institutions about the
circular and how they can raise funds to support their R&D
activities through it.
Long Term Fix
A long term fix requires a more sustainable initiative, one
that depends on tax relief instead of upfront guarantee
funded by the private sector. This can be done by providing
tax reliefs for the various types of activities that generate
intellectual property, and can be extended to individuals,
academic institutions and corporations.
into Lebanon
• Qualified engineers
• Information tech-
nology skills
• Development and
application of tech-
nology
• Funding for techno-
logical development
• Public and private
sector ventures
1st
2nd
3rd
• R&D person-
nel per capita
• Skilled labor
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60 61
Challenge 4
TYING ACCELERATORS WITH LARGE COMPANIES IN THE
COUNTRY: ISTANBUL’S STARTUP FACTORY
Özyeğin University saw that entrepreneurs initiating a star-
tup needed an array of support that the private sector was
equipped to provide. On May 4, 2011, it became a pioneer
university in involving the private sector in the startup
world in Turkey. Özyeğin University partnered with Turkcell
to “accelerate commercialization of ideas and technologies
and to promote entrepreneurship” and founded the Startup
Factory.[36]
The entity acts as an accelerator that develops
strategies through mentorship of Özyeğin faculty and
experienced serial entrepreneurs. It also introduces entre-
preneurs to angel investor networks in Turkey and provides
support for professional services. Successful companies
in the mobile business get to participate in the Turkcell
Partner Program.[37]
Through identified partners, Turkcell develops new pro-
grams and services in the mobile business realm in the
hopes of delivering to a wider audience.[38]
Not enough opportunities
for private sector involvement in academia
Short Term Fix
Push universities to make use of the guarantee provided
by the Central Bank for knowledge economy endeavors.
Universities will be encouraged to establish research and
development(R&D) centers to extend their own activities.
It is advised that they recruit an international partner to
support their efforts in establishing the R&D unit also
lending the local university international credibility, access
to specialized talent and a vast network. The university
and the international partner could make use of the funds
guaranteed by the Central Bank while still retaining the
majority of their intellectual property rights.
Long Term Fix
Extend the subsidies to international universities and
corporations by marketing Lebanon as a back end for the
research of regional and international companies, allowing
them to access the local pool of funds to fuel their activity.
into Lebanon
Challenge 5
A. MISMATCH BETWEEN SKILLS OF RECENT GRADUATES
AND TODAY’S PROGRESSIVE MARKET NEEDS
Build Talent for innovation: Singapore’s A*STAR
Singapore created a plan to promote the knowledge econ-
omy, and one of the most renowned cases is the story of
A*STAR. Replacing the National Science and Technology
Board in 2002, the Agency for Science and Technology
Organization (A*STAR) is “Singapore’s public sector agency
that spearheads economic oriented research to advance
scientific discovery and develop innovative technology.”[39]
A*Star takes the concept of ‘education for employment’ a
step further, becoming academia for innovative industry.
Under A*STAR’s motto to push human capital development,
Singapore’s youth is targeted by scholarships and awards,
allowing them to pursue graduate and postgraduate de-
grees in the leading universities of the world. These awards
promote scientific talent among early-career researchers at
public research institutes, industry and universities.[40]
This program resulted in the rapid development of a large
and highly educated Singaporean youth very quickly. The
Singaporeans quickly realized that it will take them many
years before their education system is on par with inter-
national standards, so they leveraged international aca-
demic institutions to feed their own talent pool, while they
built their own world-class universities in parallel.
Introduce “Innovation Programs” into Universities: NYU,
Syracuse
Many fresh grads or young professionals are unprepared to
face the challenges set by a changing, volatile, and com-
plex world. National and international reports point out the
skills gap, particularly in soft skills such as communica-
tion, critical thinking, and hard skills such as coding. Many
employers blame this gap on higher education.[41]
Entre-
preneurship, a Kauffman Foundation research report found
in 2008, “is one of the fastest growing subjects in today’s
undergraduate curricula.” [42]
University and schooling systems in
Lebanon do not cater to the modern
world’s talent needs (entrepreneurship,
innovation and tech knowledge)
Few schools around the world offer an entire academic
department specialized in entrepreneurship, let alone as
a part of a center dedicated to entrepreneurship. Syracuse
University in NYC is one of the few institutions to create an
Entrepreneurship and Emerging Enterprises program (EEE)
department in collaboration with the Falcon Center for
Entrepreneurship.
According to Terry Brown, the new executive director at
the Syracuse University (SU) Falcone Center for Entrepre-
neurship, the academic development of the central NY area
should be directed towards “creating an entrepreneurship
innovation economy.” [43]
The center’s motto is “dream,
believe, pursue,” and the center operates with the mentality
of innovative cooperation between universities and busi-
nesses.
To help develop entrepreneurial impulses within the stu-
dents, Syracuse provides the financial resources, technical
skills, and mindset by “combining classroom with experi-
ential learning”[44]
through a variety of innovative programs
and initiatives. “More than 7,500 students a year take 85 or
more different courses infused with entrepreneurship and
innovation each semester. About 100 new student ventures
are launched every year.” [45]
This is the story of how one
academic giant managed to turn its rigid education systems
into an agile one that accommodates the needs of today.
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62 63
B. INTERDISCIPLINARY INTERACTIONS IN UNIVERSITIES
ARE LIMITED AMONG DIFFERENT DEPARTMENTS
A Degree Program and Space for Interdisciplinary inter-
actions – Aalto, Finland
One of the best examples of Finland’s large-scale, holistic
approach to innovation is Aalto University.[46]
It is the result
of the merger of three established universities: Helsinki’s
School of Economics, University of Art and Design, and Uni-
versity of Technology. Aalto developed curricula and stimu-
lated research to explore novel, commercially significant
ideas. In bringing together experts from disparate arenas,
including design, media, and technology, the university
develops new approaches to common problems and mani-
fests the Finnish government’s conviction that innovation
will come from cross-disciplinary efforts. They promote this
primarily through a space and a program.
1. Space
Aalto Design Factory (ADF) was born from a research
project focused on creating an ideal physical and mental
working environment for product developers and research-
ers. Today ADF is one of the flagship projects and first
physical manifestations of Aalto University encouraging
and enabling fruitful interaction between students, re-
searchers, and professional practitioners. ADF operates in
an old wood research laboratory, which has been designed
to support experimentation, prototyping, and interaction.
The multi-purpose nature of the spaces makes it possible
to maintain a high rate of use and to keep things flexible.[47]
2. Program
The International Design and Business Management (IDBM)
Master’s program initially started off as a minor program in
1995, bringing together designers, engineers, and business
students into one space. Then, the market in Finland began
to target students who had completed that course for
recruitment and employment. The positive feedback loop
was what pushed the university to expand the program into
a full-fledged Master’s degree, where it now consists of
international and multidisciplinary courses accompanied by
a year-long industry project in collaboration with companies
from all over the world.
Short Term Fix
Survey Lebanese startups and investors on the type of
graduates they are looking for and what skills they need.
Once the skill gaps have been identified, the next step
would be to increase science scholarships for Lebanese
students to study in top tier universities, on the condition
that they come back to Lebanon to spearhead innovation for
at least two years afterwards.

Long Term Fix
Propose partnerships between research and support units
within academic institutions to strengthen or create active
entrepreneurship centers and workshops. Alternatively,
enhance collaboration of businesses with universities by
partnering support units with universities to create a center
for entrepreneurship.
into Lebanon
Short Term Fix
Learning from the humble beginnings of Aalto University
and how it transformed itself from a classical school to a
pioneer in educational innovation, we can quickly recog-
nize what we are able to do today to change the Lebanese
status quo. Introducing interdisciplinary courses in the
form of electives that bring together students from differ-
ent backgrounds to work on a project together would be a
positive first step. This will create a feedback loop for the
university to expand such programs.
Long Term Fix
Creating spaces for interdisciplinary interactions is instru-
mental for innovation to flourish. Universities must invest in
innovation labs where students can experiment and proto-
type, explore different materials, and exchange thoughts.
into Lebanon
IDBM is offered as a Master and a Minor program.[48]
Degree options:
+ Master of Science in Economics
and Business Administration (M.Sc.
Econ.)
+ Master of Science in Technology
(M.Sc. Tech.)
+ Master of Arts (M.A.)
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64 65
Not enough people know about what is
going on in the Lebanese entrepreneurship
ecosystem. This problem is twofold:
a. Not enough marketing efforts outside of the ecosystem
and internationally
Create a Brand: Startup Chile
Startup Chile managed to create a reputation for the
country and position it as a startup hub. The first year, 19
international media outlets featured news pieces about it.
Two years later, this figure had grown to 928, which is quite
remarkable given that the program had no marketing budget
whatsoever.[49]
The program even inspired other governments
around the world to have similar programs such as Startup
America, Britain, Greece, Italy, Brazil, Jamaica, and Peru.
Soon enough, Startup Chile found its way to weekly news,
appearing in “at least one article a week in the world’s
major newspapers,” said Sebastian Vidal (Startup Chile
Program Director). By successfully changing the mindset of
young Chileans, the program also pushed them to get out of
the country and build stronger networks, with Chile at the
center. This also enhanced the effectiveness of the program
in creating a brand for Chile.
The strength of Startup Chile was:
1) The content was highly marketable: They
made it extremely easy for expats to pursue
entrepreneurship in Chile. The whole process
was very clear and information was available
online. The process was simple and easy.
2) Grassroots marketing efforts: The pro-
gram had an Alumni initiative, where former
program participants organized Startup Chile
events in their new home countries to spread
the word about the program and about Chile.
This was considered free and very persuasive
community-based marketing.
b. Lack of information available online - no unified re-
source for information about the Circular or about setting
up a business in Lebanon.
Markets and
Networks
Challenge 6
Making Information available: Tech City UK
The UK government saw the need for growing its digital busi-
ness medium and for playing an international role in this sphere.
In 2010, Prime Minister David Cameron launched Tech City UK to
further support the locally grown Silicon Roundabout tech hub
in London. Tech City UK continues to support entrepreneurs in
setting up their businesses and fostering growth.
Tech City UK looks at the ecosystem holistically with clear
mechanisms for documenting successes and creating a strong
feedback loop to inform policy. Additionally, it is providing a
centralized entity that provides easy and accessible information
to stakeholders, be it a startup, investor, or partner. The promo-
tion wing of the initiative activates local media channels and
works on disseminating information, while the website clearly
articulates information catered to various objectives. Under its
government resources wing in the website,[50]
the government
guides you through the steps to set up your business and get
funding.
Short Term Fix
Make information easily accessible in multiple languages,
for foreigners and locals. Create a website with user-friendly
information catered to supporting the various startup ecosystem
stakeholders. This website would serve as as centralized entity
with information on the how-to’s of creating a startup in Lebanon
and ways to apply for funding.
Create a startup PR agency that is commissioned to pro-
mote what is happening in the entrepreneurship scene in
Lebanon to the traditional outlets to combat exclusion. The
PR agency will make sure that startup news is communicat-
ed to the masses locally and internationally.
Long Term Fix
Develop the various programs needed to build the startup
ecosystem. Build on this report to create programs that cater
directly to the gaps identified. Creating a holistic array of pro-
grams geared with specific objectives for supporting the various
startup stages will create alignment of stakeholders’ actions.
into Lebanon
2010
1
19
2011
92
113
2012
172
928
2013
+250
+1000
National
International
Startup Chile Media Coverage
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66 67
Challenge 7
into Lebanon
Need for access to larger markets
Unite to Create a Regionally Competitive Startup
Ecosystem
The youth bulge in West Asia is the region’s greatest challenge
and greatest opportunity at the same time. Iran and Egypt are
resource rich, and have an incredibly talented pool of young
entrepreneurs who need equal opportunities to launch and grow
their initiatives. The Middle East is a double edged sword. On
one side, it is home to the youngest population in the world, but
it has the highest regional unemployment rate.
Lebanon’s market size is not significant enough for startups to
scale up at a high speed, which means that Lebanese entrepre-
neurs have to look towards other markets as potential targets
to sell their products or services. Egypt and Iran have a dynamic
population of 90 million and 80 million respectively, and the
challenge lies in leveraging each country’s advantages to create
a competitive regional startup ecosystem. Regional investors
also need more opportunities to invest in the region and support
fledgling entrepreneurs for their solutions to grow and scale.
“The need to have more integrated regional markets is a neces-
sary step so that impactful and strong solutions can scale and
expand in West Asia,” said Azadeh Tajdar from Tehran Hub.

Short Term Fix
Launch regional exchange programs that allow young entre-
preneurs from the region to visit other countries with relevant
markets. Exchange programs are a great way to build region-
al resources, networks, and markets for new and innovative
products, and such programs would also include connecting
entrepreneurs to leaders, role models, and mentors. The focus
would be on building skills and capabilities in leadership and
management.
Long Term Fix
Identify the markets with the largest and most active diaspora
pockets and develop relationships with them. Additionally, laws
need to be proposed that would facilitate regional exchange
programs - when initiatives are developed to a larger scale, all
participating support units and institutions should sign a pledge
to ensure transparency, leading by example and minimizing
level of corruption.
Challenge 8
Short Term Fix
Create discussion panels between entrepreneurs and
leaders in the banking sector to have a more comprehensive
understanding of what the industry needs and what flexible
advances startups can offer to the industry.
Long Term Fix
Launch an intensive Innovation Lab program by forming a
solid board of leading regional and global figures in finan-
cial institutions. Select a number of promising fintech star-
tups and plug them into an accelerated program where they
will receive constructive criticism to improve their products
and the opportunity to match with top institutions.
Not enough private sector interest in
startups, creating an even smaller market
Matching Fin-Tech Startups with Big Banks- NY FinTech
Innovation Lab
Financial Technology (Fintech) Startups face an intense-
ly competitive environment, but tech is the chosen new
playground for banks to compete in. As a result of heated
competition, fintech startups find that selling to big banks
is time consuming. Partnership Innovation Fund, along with
Accenture, created the NY Fintech innovation Lab. Accord-
ing to Maria Gotsch, CEO of FinTech Innovation Lab, “The
needs are big, the market is big, and spending is big”.[51]
The
NY FinTech Innovation Lab pairs startups with mentors in
the banking industry, and bridges technology with financial
services customers. Customer feedback can take up to 18
months to receive and evaluate. The goal is to compress
those 18 months to 12 weeks.
By easing and accelerating the matching process, the
initiative boosted the growth of enterprise in the fintech
sector in NY. The initiative also leveraged the benefits
that came from proximity to the largest concentration of
financial tech firms in the US. The goal was to create jobs,
increase investment in the marketplace, and participate
in getting NYC on the map as part of the ecosystem in
Fintech. The direct advantage for fintech startups was that,
once incorporated in the infrastructure, it is hard for them
to be displaced, so the company is able to grow and its
stability is ensured. The initiative was extremely aggres-
sive in developing its activities, hosting Select Leadership
Program panels, raising $175 million in funds, setting 163
meetings with mentors, plus 199 meetings with participat-
ing banks in just 12 weeks.[52]
into Lebanon
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68 69
Capital
Challenges
Challenge 9
Not enough of the funding is being spent
on seed stage investments
In 2008, Prime Minister Lee Hsien Loong announced a
national program called National Framework for Research
Innovation (NFIE) with a five year US$242 million plan to
grow funds and support innovation and entrepreneurship in
Singapore.
The plan had various initiatives that were acting on
multidimensional levels: funding early stage startups,
encouraging further research amongst professionals
through grants, creating the right incubation infrastructure,
prompting high tech venture firms to move to Singapore,
and bringing multiple industries together. Some schemes
under NFIE [53]
included the following encapsulated in the
below table:
The Strength of this initiative is that it stipulated that the
funding would enable startups of all stages, including Seed
Stage startups (i.e funding for “Proof-of-Concept). This
meant that investors had to fund ideas, not only established
ventures, something they may have avoided doing had they
not been obliged to. This ensured a steady flow of startups
for the long-term pipeline.
Short Term Fix
The funding available for the ecosystem market must be
divided upon the different stages of investment to avoid an
end scenario where the majority of the investments were
driven by a conservative approach to investment i.e Early
and Growth Stage Startups and were not invested where it
most needed i.e. Seed Stage Startups.
Long Term Fix
The long term fix to sustain continuous reinvestment in
innovation and the knowledge economy would be shift
from an upfront guarantee based scheme i.e Intermediate
Circular 331 to subsidy schemes for investments in new and
innovative ideas.
into Lebanon
Innovation Cluster
Programme
Global Entrepreneur
Executives
Technology Incuba-
tion Scheme
Proof-Of-Concept
Grants
Early Stage
Venture Fund
N/AUS$3 Million85% coinvestment
US $347,000 per
startups)
US$174,000 Maxi-
mum
US $7 Million Dollars
Amount
Encourages tech
economies and
organizations to
form innovation
clusters
bring ideas quickly
to the market, raise
productivity, create
jobs and grow the
sector.
Attract high-tech
venture backed
firms in communi-
cationt medical
and clean tech to
move to singapore
NFIE invests in
selected startups,
recommended by
technology incu-
bators.
The Technology In-
cubator co-invests
the remaining 15%
of investment into
the start-up, and
guides and mentors
the startup
Fund professionals
in public hospitals &
institutes of higher
learning in carrying
further technology
products with poten-
tial of commerciali-
zation
Fund seed venture
capital firms that
support high-tech
companies
Target
Source: National Research Foundation, Prime Minister’s Office
Singapore, “Programmes,” http://www.nrf.gov.sg/about-nrf/pro-
grammes, accessed October 2015.
[CC BY-NC-ND]

70 71
Challenge 10
Lack of a strong business angel network
Create a Strong Angel Network: The Cairo Angels
The Cairo Angels is the first formal angel network in Egypt
and one of the strongest in the Middle East and Africa, with 80
members who invest at least US $10,000 to $25,000 once a year
as a required minimum. This is a significant investment in the
Egyptian context, keeping in mind an overall lack of funding.
“Collectively, they make equity investments in the range of
$30,000 to $125,000 per company, and can syndicate larger in-
vestments to our partner organizations.” [56]
Each quarter, at least
one deal closed at $150,000 for a single investment in Egypt.
Angel investors have the choice between being a loner or leader
and co-investor without taking “majority stakes.”
According to Aly Shalakany from Cairo Angels, the mindset of
investors is “sell big and monetize,” therefore agreeing on a
common, global, and ambitious vision. The Cairo Angels network
also agrees on looking for startups specialized in agriculture,
logistics and energy sectors that have both a regional and global
vision. Regular panels are created to discover new talent and
give them feedback, pushing them forward if necessary.
The Cairo Angels leverage a London branch of around 30 mem-
bers. This branch plays a key role in connecting entrepreneurs
with foreign investment and mentorship, while exposing and
connecting them to larger markets.
Short Term Fix
Start a dialogue between local angel investors aimed at creating
a strong angel network. Once the network is solid enough
locally, network members look for foreign investors in strategic
locations such as London, NY, and Silicon Valley to join the circle
as the network’s foreign branch.
Long Term Fix
Strengthen ties amongst members of the same network and
other ecosystem stakeholders by creating a “support investors”
initiative, and by leveraging capacity building techniques and
activities such as networking tips, mentoring, and sponsoring
pitch events.
into Lebanon
Governance
Challenges
Cairo Angels invested
in more than 14 startups in 2 years
[CC BY-NC-ND]

Lebanon's Startup Ecosystem Roadmap - BDL Accelerate 2015

Lebanon's Startup Ecosystem Roadmap - BDL Accelerate 2015

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