Research: First Year Startup Costs

Audrey Cheng

June 5, 2014

As a venture capital firm, Savannah Fund is interested in the differing variables that can affect entrepreneurs in the countries of startups we have or will invest in. One of the key metrics we want to understand more about is first year startup costs. In this research study, we asked hubs and about three startups per country for their first-year startup costs. These costs include: web hosting, internet, entry level engineer, engineer with 3-5 years of experience, shared apartment (for 3 people), workspace desk rental, legal costs, business permits, accounting, travel, and admin/sales.

DISCLAIMER: While our sample size was relatively small, we were interested in seeing the differences between startup costs with a sample from our investments or potential investments. There are a number of variables that could change these numbers, such as industry of startup, personal preferences of startups (which could affect size of home and willingness to spend on personal costs), etc. Also, since these numbers may vary from startup to startup within countries, we averaged the numbers we received.

1styearstartupcosts — *South Africa is the most expensive Country to launch a start-up.*

Infrastructurecosts — *South Africa followed by West African countries are most expensive in infrastructure. East Africa being the cheapest- is this due to availability of hubs?*

Engineeringcosts — Entry level Engineers out of college lowest in East Africa. South Africa and Ghana next- Is this due to better education systems in those regions? South African Engineers command highest salary for experienced Engineers (3+ years)

Adminstrationcosts — Administration costs are pretty even, Although Kenya and South Africa are lowest, this is great for non core costs that should remain low as those are leading ecosystems with friendly service providers who can earn a living on volume of startups over time.

Tagged: accounting, admin, africa, business permits, costs, desk rental, engineer, first year startup costs, Internet, legal costs, salary, venture capital, web hosting

9 responses to “Research: First Year Startup Costs”

paul

Interesting, but the graph is hard to read. I imported the tsv into gdocs for easier viewing of the raw data, if anyone is interested: http://bit.ly/1pcA7J9

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1. Mbwana Alliy
  
  Thanks for the feedback, added some clearer charts that should help.
  
  Reply
  1. paul
    
    Much improved 🙂
    
    Reply
Connor James Leech

yeah cool use of d3 thou i think the scales are wickedly fucked up. 100 to 25000. is that dollars?

Reply
1. Mbwana Alliy
  
  Clearer scale too and more insights broken out
  
  Reply
What Are Tech Company Start Up Costs in 6 African Countires? | InnovationAfrica

[…] this research study, we asked hubs and about three startups per country for their first-year startup costs. These costs […]

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Kimanthi Gicovi

Very interesting bit of analysis. Is the data behind the graphs publically available? I would love to take a look at it if possible

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Gerald Muriuki

A very helpful bit of analysis.

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Research: First Year Startup Costs

9 responses to “Research: First Year Startup Costs”

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