It is undoubtedly true that after you have taken the big step and resolved to establish a tech startup, the next thing that should be on your mind is how to fund the startup. Particularly in a country like Nigeria, funding a startup can come to be a very herculean task, given the whole nature of the economy, but has that stopped some startups from being funded? NO.
To succeed in such a country as this, you do have to be brutal, in everything. Even in the way you source for funds, you have to be willing to take that extra step nobody else is willing to take. This is except if you desire to end up like all other average start-ups still struggling to get a headway. Side note: The greatest enemy of man is ‘average’.
Well, there are different ways you can choose to raise funds for your startup. While some come with a price, others don’t. Stay with me as we go through this together.
1. Friends and family
The thing is, before you even resolved to create an entrepreneur, some people trusted your abilities and had faith in whatever you want to do. This is now the time to materialise that faith they have in you. You can approach your friends and family for their financial support, and trust me that it’d form a significant part of the startup capital.
The good news about this is those friends and families likely not to request for equity in the business unless of course, you have business savvy friends, and if they do, it would be a fair deal to you. This should be your first stop.
2. Business competitions
Quite recently, there had been the emergence of a lot of business competitions in the country, with a handful targeted at just tech start-ups while others are general. Thing is, you as a tech startup founder can apply for any of them. And guess what? The take home prices (in monetary terms) are always very attractive. An example is the Tony Elumelu Entrepreneurship Program (TEEP), rewarding 1000 start-ups with $5000 each annually.
Most times, this also does not come with a request for equity, rather you even enjoy mentorship from the world’s finest entrepreneurs.
First, as an entrepreneur, you must have developed the culture of savings. If you haven’t, please do as soon as you can, before you fully launch your startup. Thing is, your own savings can go a long way to help your kick-start your startup. Along with the family and friends support, it should be one of the first sources of capital. You can also choose to request equity from yourself. That’s on a lighter note though.
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Most times, I strongly advise against this one because it could come back to haunt your business finances, especially if it isn’t well managed. But then, if you haven’t any other choice, a bank loan would go a long way to help you.
5. Investor pitch events
They would say to “save the best for last”, and that is mainly what we have done here. This is where the real deal is. If you’re very confident of your ideas, and your presentation skills (as emphasised that you should acquire in this post), then you should consider pitching your idea to major angel investors in the country. Different pitch events are being held and trust me when I say that if you impress these set, and they resolve to invest, then be sure to receive a huge amount of investment. Only that it comes with equity in your startup at a price, which is very fair to me. An example of this event is the UBA idea challenge that just closed applications some days ago.
So at this point, you have five ways or routes you can take to finance your newly birthed tech startup. So do tell us how far you have gone about it. We’re waiting to hear from you.
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