Raising money as an entrepreneur could be tough especially if you lack knowledge about it. I will be sharing from my own fund raising experiences in the course of the thread – real life lessons.
Now let's move.
There are misconceptions about capital. Some say capital is scarce. Others will say it is too difficult to raise and some want to raise huge capital immediately. You have not managed 500k & you want someone to fund you with their 5-10 million?
The hot gist begins.
Develop a healthy financial habit and save no matter what you earn. Focus must be on increasing your income anyway as savings does not increase income or make you rich. Investment does.
Force yourself to save. I started building an emergency fund on @PiggyBankNG. It comes with little interest unlike our banks who charge us for maintaining the ATM cards in our pockets. 😁😁
They are rich folks who love risk & invest in ideas/early stage businesses. They could take shareholding too. They are not much around here but there are few ones if you look around & build the necessary network. I am an aspiring one. Look out for me 😁
They are another good source for money. However, you can offer them equity to have them release it & commit them to the venture. The terms must be spelt out legally. If you have those who do not believe in you, move along quickly. No time for sulking.
They are the big man/woman version of angel investors. They come in big when they see a company doing well and needs growth capital.
I once wrote to several of them before raising our expansion funding from @BOINigeria.
They invest in forms of loans, equity or both.
As an entrepreneur, be smart when dealing with them.
There are several of these coming up every now and again. They give grants (free money) to fund ideas or small businesses. Some are general while some target specific sectors.
They are not too common in Nigeria but there are few around springing up in different cities. I worked for one in Nairobi @GrowthAfrica over 7 years ago where I cut my teeth in entrepreneurship.
The people you know now are useful to raise funding – it might not necessarily be cash.
There is a woman who approached me to retail our eggs. I give her some crates weekly, she sells & then comes back to pay, keeps the profit & get more supplies.
In all, this can work if you have built a good reputation and have integrity.
PART TWO STARTS HERE BY 8PM!
Basically self-funding. Raising money from customers.
I know few people who have built their businesses literarily from zero.
Partner with others who have skills you need or money to start and expand your business.
However, wisdom is profitable to direct. Do not disclose the entirety of your idea and later become a victim of idea theft.
They basically work to provide self-help and mutual help to its members. They are a good source of funding. I love this thread by @yinkanubi on cooperatives.
Like the name implies – it means raising money from a crowd or lots of people. It is like taking a loan from several people to fund your business.
Now that is if you have your business figured out. @ePoultryNG uses this model.
Many people do not know they can monetize their skills and knowledge. My friend and brother @ronaldnzimora calls it “sell your brain". He actually authored a book with that title.
The world is waiting to consume your knowledge and make you rich in return.
Importantly, do not feel bad charging for YOUR knowledge.
VALUE brings money!
The big elephant in the room
Do not take loans from our conventional commercial banks because the interest rate is too high. Infact, they won’t even give you.
Get loans from specialized banks like Bank of Industry @BOINigeria, Bank of Agriculture, among others.
They pay a little fraction to you as cash (maybe 20, 30, 40% or more depending on your kind of business) and others directly to your vendors whom you...
Refer to number 13 in this thread.
Remember not to take a loan to start. Try as much as you can to increase your knowledge on fund raising as well and position yourself to be the right entrepreneur.
Sales is NOT profit.
Make money enough from selling and have it cover your expenses and remain.
Develop your money skills to ensure you can grow the money you make. Seek advice along the way.
You too, find a way to ensure what they take from you reduces but ultimately make more money. Save. Reinvest.
Thank you for your time.
Takes a bow as I expect questions, comments and queries.