Regional investors are not doing enough to support start-up ventures, say two Dubai entrepreneurs.
Their warning comes after they were forced to turn to the West to raise US$500,000 (Dh1.83 million) in backing.
The inventors of the Pocket TV - a device that turns a regular television into a so-called smart TV - said they tried and failed to raise local funding for their project.
"Dubai is not very start-up friendly," said Samer Geissah, who helped to create the Pocket TV device. "Unless you are in restaurants or real estate it becomes very difficult to convince somebody to give you money up front," he added.
The Pocket TV, which was designed in the UAE, plugs into the HDMI socket found in most modern televisions.
Using Wi-Fi, it turns the TV into an internet-connected device,allowing users to download the same Android apps found on smartphones and tablets.
A prototype of the device can stream videos from sites such as YouTube, access Facebook and Twitter and run applications and games such as Angry Birds.
Ahmad Zahran, the chief executive of Infinitec - the company behind the Pocket TV - said the lack of "angel investors" in the Middle East meant he was forced to turn to the US fundraising site Kickstarter to secure financing.
"I probably did the rounds with every single investor out there. Innovation is not a place they are interested in putting their money," he said. Mr Zahran set a $100,000 target but ended up attracting $501,321 in funding via Kickstarter, making it one of the most successful projects listed on the site.
A total of 3,500 Pocket TVs were sold via the website, with about 95 per cent of orders originating from Europe and the United States.
After the Kickstarter funding closed on July 9, hundreds more have sold via Infinitec's website.
The Pocket TV is available for pre-order for $149, including a remote control with full keyboard, which can be tilted from side to side to control a pointer on the TV screen.
Its inventors say the final design is almost ready and they have found a factory in China to make the product. They hope to start shipping the first orders by the end of October.
Mr Zahran said he has had interest from some large multinational retailers in the US as well as some local shops interested in stocking the Pocket TV.
"We're hoping to hit between 100,000 and 300,000 unit [sales] next year," he said.
Kickstarter can only be used by people with a US bank account, which puts it out of reach for many entrepreneurs in the Middle East.
But a regional version of Kickstarter called Aflamnah launched last month. It is aimed at filmmakers, inventors and app makers looking for cash to get their ideas off the ground.
Vida Rizq, Aflamnah's principal founder, agreed that the Arabian Gulf region was not very amenable to start-ups.
"It's not a supportive environment. The angel investors don't make it easy for you to find them," she said.
Other barriers to being an entrepreneur in the UAE include the need for expatriates to arrange costly visas and medical insurance, Ms Rizq said.
Aflamnah has so far featured nine projects and has attracted funding of more than $25,000 in the first six weeks of operation. More projects are in the pipeline, Ms Rizq said.
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