Question 1

What is capital advisory and how does it differ from investment banking?

Accepted Answer

Capital advisory focuses on helping businesses secure the right type of funding at the right stage. Unlike full-service investment banks, capital advisors specialise in fundraising strategy, investor introductions, deal structuring, and transaction support. In the UAE, this includes navigating DIFC, ADGM, and SCA regulatory requirements specific to capital raises.

Question 2

How much does capital advisory cost in Dubai?

Accepted Answer

Capital advisory fees in Dubai typically include a monthly retainer of AED 15,000-50,000 plus a success fee of 2-5% on capital raised. The exact structure depends on deal size, complexity, and stage. Pre-seed and seed deals often carry higher percentage fees due to smaller ticket sizes, while Series B+ rounds have lower percentage fees on larger amounts.

Question 3

What types of capital can SKIMBOX help my business raise?

Accepted Answer

We advise on equity rounds (pre-seed through Series C+), venture debt, convertible notes, SAFEs, mezzanine financing, project finance, and bridge loans. For later-stage companies, we support pre-IPO rounds and public market listings on ADX, DFM, and Nasdaq Dubai. The right instrument depends on your stage, growth rate, and capital needs.

Question 4

How long does a typical fundraising round take in the UAE?

Accepted Answer

Pre-seed and seed rounds in the UAE typically close in 2-4 months. Series A rounds take 4-6 months from first investor meeting to close. Later-stage rounds and PE transactions can take 6-12 months depending on due diligence complexity and regulatory approvals. Having materials ready before outreach begins can reduce timelines by 30-40%.

Question 5

What documents do I need to raise capital in Dubai?

Accepted Answer

At minimum, investors expect a pitch deck, executive summary, three-statement financial model, cap table, and company formation documents. For Series A and beyond, add a virtual data room with audited financials, customer contracts, IP documentation, and regulatory filings. DIFC and ADGM raises may require additional offering documents.

Question 6

What is a pitch deck and what should it include?

Accepted Answer

A pitch deck is a 12-15 slide presentation that tells your company story to investors. It should cover the problem, solution, market size, business model, traction, team, competitive landscape, financials, and the ask. For UAE investors, include your regulatory status, regional expansion plans, and any government partnerships or grants.

Question 7

What is due diligence and how should I prepare for it?

Accepted Answer

Due diligence is the investor's investigation of your company before committing capital. It covers financial records, legal structure, IP ownership, customer contracts, team background, and regulatory compliance. Prepare by organising a virtual data room with all key documents, cleaning your cap table, and resolving any outstanding legal or compliance issues.

Question 8

What is a term sheet and what key terms should I negotiate?

Accepted Answer

A term sheet is a non-binding agreement outlining the key terms of an investment. Critical terms include valuation, investment amount, liquidation preference, anti-dilution provisions, board composition, veto rights, and founder vesting. In the UAE, also consider governing law (DIFC or ADGM courts) and any regulatory conditions precedent.

Question 9

How do DIFC and ADGM regulations affect fundraising?

Accepted Answer

DIFC and ADGM have their own regulatory frameworks for capital raises. Offerings to the public require prospectus approval from DFSA or FSRA respectively. Private placements to qualified investors have lighter requirements but still need proper documentation. Fund managers operating from these jurisdictions need specific licenses and must meet ongoing regulatory obligations.

Question 10

What is the difference between a SAFE and a convertible note in the UAE?

Accepted Answer

A SAFE (Simple Agreement for Future Equity) gives investors the right to convert to equity at a future round without accruing interest or having a maturity date. A convertible note is debt that converts to equity, carries interest, and has a maturity date. Both are common in UAE pre-seed and seed rounds, though SAFEs are gaining popularity for their simplicity.

Question 11

How do I value my startup for a fundraising round?

Accepted Answer

Early-stage valuations in the UAE are based on comparable deals, traction metrics, market size, and team quality rather than DCF models. Pre-seed valuations in Dubai typically range from AED 3-10 million. Seed rounds range from AED 10-30 million. Series A valuations start around AED 40-100 million depending on revenue, growth rate, and sector.

Question 12

What venture capital firms are active in the UAE?

Accepted Answer

The UAE hosts a growing VC ecosystem. Active firms include BECO Capital, Global Ventures, Shorooq Partners, Wamda Capital, Flat6Labs, and 500 Global MENA. Saudi-based firms like STV and Sanabil also invest in UAE startups. Family offices from across the GCC are increasingly participating in venture rounds, particularly in fintech and healthtech.

Question 13

Can free zone companies raise capital in the UAE?

Accepted Answer

Yes. Free zone companies can raise capital from local and international investors. DIFC and ADGM companies benefit from common-law legal frameworks that international investors prefer. Other free zones like DMCC and IFZA allow capital raises but may require additional structuring. The choice of free zone affects investor confidence and regulatory requirements.

Question 14

What is the SCA's role in UAE capital markets?

Accepted Answer

The Securities and Commodities Authority (SCA) regulates public offerings, listed securities, and investment funds in the UAE outside of DIFC and ADGM. Any public offering of securities requires SCA approval. Private placements have specific exemptions but must still comply with SCA guidelines. Companies planning an IPO on ADX or DFM work directly with SCA.

Question 15

How do I prepare my company for an IPO in the UAE?

Accepted Answer

IPO preparation typically takes 12-24 months. Steps include appointing an underwriter and legal counsel, completing two years of audited IFRS financials, establishing corporate governance frameworks, preparing a prospectus, and obtaining SCA or exchange approval. Companies must also meet minimum capital and free float requirements for ADX, DFM, or Nasdaq Dubai.

Question 16

What is private equity and how does it differ from venture capital?

Accepted Answer

Private equity firms invest in established businesses with proven revenue and cash flow, often taking majority stakes. Venture capital targets earlier-stage companies with high growth potential, typically taking minority positions. In the UAE, PE firms focus on real estate, healthcare, education, and industrial sectors, while VCs concentrate on tech-enabled startups.

Question 17

What government grants and incentives are available for UAE startups?

Accepted Answer

UAE startups can access grants from Hub71 (Abu Dhabi), DTEC (Dubai), and Mohammed Bin Rashid Innovation Fund. The Khalifa Fund offers financing for Emirati entrepreneurs. Dubai SME provides funding and mentorship programmes. Many free zones offer reduced licensing fees and office space subsidies. Grant amounts range from AED 50,000 to AED 2 million.

Question 18

What is venture debt and when should I consider it?

Accepted Answer

Venture debt is non-dilutive financing provided to venture-backed companies, typically after an equity round. It extends your runway without additional dilution. Consider venture debt when you have strong revenue growth, a clear path to profitability, and want to bridge between equity rounds. Several DIFC-based lenders now offer venture debt facilities for UAE startups.

Question 19

How does capital structuring affect my company's growth?

Accepted Answer

Poor capital structuring leads to excessive dilution, misaligned incentives, and governance conflicts that slow growth. Good structuring balances equity and debt, preserves founder control at critical stages, and creates clean cap tables that future investors want to see. Every dollar raised should come with terms that support long-term value creation.

Question 20

What is a cap table and why does it matter for fundraising?

Accepted Answer

A capitalisation table records all equity ownership, options, warrants, and convertible instruments in your company. Investors review cap tables to understand ownership distribution, dilution history, and potential conflicts. A clean cap table with clear vesting schedules and no unusual provisions makes fundraising significantly faster and smoother.

Question 21

Can SKIMBOX help with cross-border fundraising from the UAE?

Accepted Answer

Yes. Many UAE startups raise from international investors in the US, Europe, and Asia alongside GCC capital. We structure deals that work across jurisdictions, handle regulatory compliance in multiple markets, and prepare materials that meet the standards of international institutional investors. Our DIFC and ADGM expertise makes cross-border structuring straightforward.

Question 22

What is an ESOP and how does it work in UAE free zones?

Accepted Answer

An Employee Stock Ownership Plan (ESOP) reserves equity for employees as part of their compensation. DIFC and ADGM have clear legal frameworks for ESOPs under common law. Mainland UAE ESOPs require careful structuring due to civil law limitations. Typically, companies reserve 10-15% of equity for the ESOP pool before fundraising rounds.

Question 23

How do family offices invest differently from VCs in the UAE?

Accepted Answer

GCC family offices often invest larger ticket sizes with longer time horizons and less pressure for quick exits. They may take board seats and offer strategic value through industry connections. Unlike VCs, family offices rarely follow strict fund lifecycle constraints, which can make them more patient capital partners for UAE growth-stage companies.

Question 24

What is mezzanine financing and when is it appropriate?

Accepted Answer

Mezzanine financing sits between senior debt and equity, offering higher returns to lenders with conversion rights. It suits established companies that need growth capital without further equity dilution. In the UAE, mezzanine structures are common in real estate, hospitality, and infrastructure projects where cash flows support regular interest payments.

Question 25

What are the tax implications of raising capital in the UAE?

Accepted Answer

The UAE has no capital gains tax on equity transactions, making it attractive for fundraising. However, the 9% corporate tax applies to operating income. Interest payments on debt may have withholding tax implications depending on the lender's jurisdiction. Structuring your raise through DIFC or ADGM can provide additional tax treaty benefits.

Question 26

How do I choose the right investor for my UAE business?

Accepted Answer

Look beyond the cheque size. Evaluate the investor's sector expertise, portfolio companies, follow-on capacity, board involvement style, and regional network. For UAE startups, investors with GCC relationships and government connections add significant strategic value. Check references from other founders in their portfolio before signing a term sheet.

Question 27

What is a virtual data room and how do I set one up?

Accepted Answer

A virtual data room (VDR) is a secure online repository where you share confidential documents with investors during due diligence. Organise it into sections: corporate documents, financials, legal contracts, IP, team, and regulatory filings. Use platforms like Dealroom, Datasite, or Ansarada that offer granular access controls and activity tracking.

Question 28

Can SKIMBOX help if my previous fundraise had unfavourable terms?

Accepted Answer

Yes. We regularly help companies restructure existing cap tables, renegotiate investor rights, and clean up governance issues before the next round. This may involve secondary transactions, share buybacks, or restructuring convertible instruments. The goal is to present a clean and fundable capital structure to new investors.

Question 29

What is the typical equity dilution per funding round in the UAE?

Accepted Answer

Typical dilution per round in the UAE market: pre-seed 10-15%, seed 15-25%, Series A 20-30%, Series B 15-25%. These ranges align with global norms. Founders should plan for 50-60% total dilution across all rounds before a liquidity event. Protecting founder ownership through disciplined fundraising and milestone-based raises is critical.

Question 30

What role does corporate governance play in fundraising?

Accepted Answer

Strong corporate governance signals maturity to investors. This includes a functioning board, clear reporting structures, audited financials, documented policies, and separation of personal and company finances. DIFC and ADGM both have corporate governance codes that companies should adopt early, well before they become mandatory at later stages.

Question 31

How does SKIMBOX's capital advisory approach differ from other firms?

Accepted Answer

SKIMBOX combines deep UAE regulatory knowledge with hands-on deal execution. We do not just make introductions. We build the materials, prepare the data room, model the financials, and manage the process from first investor meeting to legal close. Every engagement is measured against clear outcomes: capital raised, terms achieved, and timeline met.

Question 32

What are the exit options for investors in UAE companies?

Accepted Answer

Common exit routes include IPO on ADX, DFM, or Nasdaq Dubai, strategic acquisition by a larger company, secondary sale to another investor, and management buyback. The UAE's growing public markets and increasing M&A activity have expanded exit options significantly. DIFC and ADGM structures are particularly attractive for cross-border acquisitions.

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