Getting funding as an entrepreneur anywhere in the world has always been a tough job and double tough in Africa. But in recent times, entrepreneurs have a vast pool of options to source for funds, even in Africa. The only thing is that these options have their advantages and a few disadvantages. As an entrepreneur,
Getting funding as an entrepreneur anywhere in the world has always been a tough job and double tough in Africa. But in recent times, entrepreneurs have a vast pool of options to source for funds, even in Africa. The only thing is that these options have their advantages and a few disadvantages.
As an entrepreneur, 90% of the time when sourcing for funds you need to decide what you are willing to give up in exchange for funding. Having said that, before you as an entrepreneur think of sourcing for funds you need to first:
…Build the right team that can execute the business idea…
Building a founding team is as important as building a business and as an entrepreneur, the onus is solely on you to ensure that you build the right team to execute your vision for the business. When the right team is assembled, then it is confirmed that the company is in full flight and the founding team can ask themselves…
…Are we ready for investors?
For every business that want to get funding from investors, certain things have to be in place. For instance, you do not get investors to fund and idea. It does not work that way. First thing that shows readiness is that your business already has to be in full swing i.e in operation for maybe 2 or even 3 years to attain a certain level of stability. If you are selling a product, it has to be in the market to test the waters and to see how viable it is. On the otherhand, if what you are providing is a service, in the same vein you ought to have provided it to a number of people or group of people.
Second thing that shows preparedness for investors is traction. In those 2 or 3 years struggling to build the business, you should have gained some traction, no matter how little. The third thing is profitability. This is important to the investors because it shows you know what you are doing. Yes, the business is very young and still struggling but do not be stagnant. Make some profit, no matter how little because investors will want to see this. Having fulfilled these 3 conditions, the next thing is to do is;
…Identify and make a shortlist of relevant investors
Not all investors should and can invest in your business. So once you decide to source for funding, draw a list of investors who are relevant and committed to your industry/kind of business. The amount you will get should not be the priority when drawing up this list. Instead, look for investors who have the structure and connections you need to grow and achieve your aim in the business.
Next up, ensure you have a clear and simple plan investors can understand
The truth is as an entrepreneur, the investor is very much interested in how you are going to make money as much as you are interested in his money. And you will be doing yourself a whole world of good if your business plan is clear cut and straight forward for them to understand. It is the best thing you can do for your business when seeking for funds. Keep it clear and simple.
Assuming you got that one right, then you must be accountable and trustworthy
Investors would not give their hard earned money to people who are not accountable and cannot be trusted with money. Also, ensure that you keep a detailed and up-to-date record of your income and expenses as far as the business is concerned.
…And finally, let the best man do the talking
While selecting your founding team as an entrepreneur, it is expected that at least a member of the team is very eloquent, articulate, understands the nitty gritty and vision of the business and is convincing when talking to people to buy into an idea.
This person has to be the marketing guru or expert in the team who will win the heart of investors over and eventually convince them to invest in the business.1 comment