Dubai: Middle Eastern entrepreneurs are leading the way when it comes to angel investing, according to an HSBC report on ‘Private Banking Essence of Enterprise’.

Two-thirds of entrepreneurs in the Middle East (66 per cent) are angel investors, funnelling both capital and expertise back to the entrepreneurial community, with the United States accounting for 54 per cent and the Asia-Pacific region accounting for 45 per cent.

The report, which researched the views of over 3,700 successful entrepreneurs across eleven countries globally, also found that differences exist between generations in how they perceive and approach angel investing.

More than half of younger Middle Eastern entrepreneurs (57 per cent) view angel investing as a way to connect and collaborate with peers, thus staying up-to-date with industry progress. In comparison, 52 per cent of an older generation of Middle Eastern entrepreneurs view angel investing as a way to diversify and grow their investment portfolio.

“Middle Eastern entrepreneurs are well and truly at the forefront of angel investing in comparison to their counterparts in the US and Asia. They not only understand the positive impact it can have on their business activity but also recognise the opportunity it provides them to collaborate and learn from their peers,” said Sobhi Tabbara, HSBC’s Global Market Head of Private Banking, Middle East.

When it comes to sourcing new investment opportunities, over half (53 per cent) of Middle Eastern entrepreneurs source these through their friends, rather than using a financial adviser (38 per cent). They also perceive their role to be supportive, cultivating business development and leadership skills.

Social impact

Nearly a quarter (24 per cent) of Middle Eastern entrepreneurs consider social responsibility, being active in the community, or environmental responsibility as their top priority as a business owner, compared to the global average of 21 per cent.

“With nearly a quarter [of] Middle Eastern entrepreneurs viewing social impact as their top business priority, it is clear to see that this group of entrepreneurs are also one that want to give back to society, understanding the benefits that doing good can have in helping to grow their business,” Tabbara.

The HSBC research also suggests a strong relationship between an emphasis on social impact and entrepreneurial ambition in the Middle East. Half of Middle Eastern entrepreneurs projecting high growth ambitions said that they started their ventures with the intention of creating positive social impact.

This suggests social impact should be seen as an integral part of the recipe of entrepreneurial success in the Middle East, and not separate from it.

Those entrepreneurs who project high growth ambitions are also more likely to have a mentor. In the Middle East, 89 per cent of entrepreneurs have a mentor relationship, viewed as a highly effective tactic for learning and development, in comparison to Europe (59 per cent) where it seems that entrepreneurs are yet to be convinced of the value of mentorship.

The research was conducted by Scorpio Partnership between December 2017 and January 2018, covering mainland China, Hong Kong, Singapore, the UK, Germany, France, the US, Switzerland, Australia, the UAE and Saudi Arabia.