Ghana has become a hot spot for technology and innovation with many capitalising on the opportunities that this revolution presents.
Out of this technological sweep are a crop of young people taking a swipe at entrepreneurship in various sectors of the economy tackling some of the nation’s plaguing problems such us filth, low agriculture productivity, financial inclusion and health.
The surge of entrepreneurship has courted the admiration of many both locally and globally and with awards, exchange programmes, travels and accolades of entrepreneurs inundating social media feeds, it has become almost impossible to escape the idea of becoming entrepreneur.
However, the unending puzzle for entrepreneurs irrespective of their levels, has been how to break the mould of funding opportunities to scale up business and sustain it.
Away from the glamour, one thing that most of these seemingly happy start up entrepreneurs battle with is funding.
While some analysts say it’s extremely difficult to raise funds from Africa, Ghana included, some suggest that, it’s a bit flexible if you get your game right.
Below are four ways to court investor attention and get the needed support for your business whether at a nascent stage or the point of diversifying.
Venture Capital Funding– This type of financing offers small companies or start-ups the opportunity to raise funding. It often seeks to invest in a business or organisations with high-risk/high-return profiles and is based on the company’s size, assets, and stage of product development. Some venture capitalists for the African market include Africinvest, Gold Venture Capital, Fusion Capital, eVentures Africa Fund, Adlevo Capital among others.
Angel Investors– An angel investor/ Investors is an individual or group with sound financial background that provides financial support for small start-ups or entrepreneurs. In some cases, they are family members or friends with the entrepreneur. Their support is geared towards assisting new businesses to get off the ground. The requirement for angel investment is quite flexible as they are focused on supporting startups and not primarily bent on profit making unlike venture capitalists. Some angel investors to check out are TBL Mirror fund, eVA Fund, West African Synergies, Africa Media Ventures Fund among others.
Grant– Grants are funds given out to organisations, businesses to support initiatives. This is often non payable and from government agencies, corporation, foundation or trust, to a non-profit entity. The Tony Elumelu Foundation Grant, UNDP-TEF African Youth Entrepreneurship Grants in Sahel Africa, Jana Robeyst Trust Fund Small Grants for Sub-Saharan Africa are all grant opportunities you should look out for.
Business Pitches/ Competitions– A business pitch is a presentation to investors to secure funding and resources to either initiate a business or expand an existing one: Find more about Tony Elumelu Foundation Grant, Empowering People Network and The ASME Innovation showcase (ISHOW) if business pitches and competitions interest you.
How do you attract investors to expand your startup?
Most businesses have used one or a combination of these opportunities to finance their businesses, however, there’s more to just knowing that these opportunities exists.
As mentioned earlier, raising funds for startups in our parts of the world (Africa) is a struggle and you need to position yourself well to sail through.
First, you need to be investor ready to attract the kind of funding you need.
“Raising funds depends on what kind of money you need or what you want to raise,” Isaac Sesi, Co- founder of Sesi Technologies told BusinessWorld Ghana in an interview
“You have to be investor ready because before an investor invests in you, there are so many things they look out for,” he adds.
His startup, Sesi technologies, works to develop affordable, simple hardware and software solutions for farmers to increase yield and improve food security in Africa.
In 2018 barely 3 months after Sesi Technologies officially launched, it was accepted into the Tony Elumelu entrepreneurship programme which offered mentorship and a $5000 grant. In the same year, his team had the opportunity to pitch at the Next Einstein Forum in Rwanda
More recently (July 12, 2019), his GrainMate device won the Community Prize in the Empowering People Network initiative organised by Siemens Stiftung which came with a 10,000 Euros prize.
Although Sesi agrees to finances being the most concerning hurdle for entrepreneurs, he argues in his blogpost, “Understanding startup accelerator programmes” that securing funds needed is more accessible than most people think.
“The real challenge comes in figuring out how much money you need, what you’ll do with those funds and also dealing with industry-specific challenges that could bring down your business and ultimately waste your funds”
For Kingley Abrokwah, Chief enabler at KudiGo- a fintech and big data platform powering retail businesses in Africa, it is important for new business owners to treat whatever they are involved in as an actual business and not for the fun of it because investors do not want to lose money.
He adds that, “If they invest in your business it simply means that you have cleared as much doubt as humanly possible and convinced them that it’s the right thing to do”
In April 2019, KudiGo was a part of the 5 African start-ups that received US$450,000 funding from Founders Factory Africa from a pool of 500 applications.
Their submissions (Sesi & Abrokwah) clearly posit that drawing in investors isn’t clear sailing, however, the central plank is to be well positioned as a business, investor readiness, have a clear vision on how much you need and know how it’s going to be used.
In a recent publication, the CEO of Quick Angels Limited, Mr. Richard Nii Armah Quaye, encouraged entrepreneurs to be versatile with their projects, ideas, businesses to attract the right investors.
“As an entrepreneur, your idea should be unique and stand out so an investor is convinced to invest. You should have the skill to be able to execute once you get the funding you are looking for. You should simply be different and innovative,” he further said.
Although Quick Angels, Ghana’s first indigenous Angel Investor was launched in May this year, there’s been reports of a massive throng of budding entrepreneurs at its premises.
Obirikorang Francis Appiah, Chief Executive Officer, Agrocenta LLC elaborates in his social media post, “Raising Money For Your Startup (In The African Context) – Part One.
“Quite often founders ask me ‘I need to raise money for my startup. Can you connect me to any of the investors in your network’? I always ask one question: “are you investment ready”?”
“Quite often that question catches them off-guard or back-pedalling. “Yeah I have a product/software I think will be great if I get investors” he said of the founders..
He juxtaposed raising money from external sources in Africa to war “because investors don’t trust the terrain and are unwilling to put money into any highly volatile environment.”
He further explained in his post that internal investors either do not exist or are focused in some specific sectors.
To successfully raise funds, he suggested, “you need to go into fundraising mode with an open mind and covering all bases” taking into consideration the demands of investors such as a pitch/investor deck, financial model document, the exact stage of funding you are looking, proof of concept among others.
Obirikorang’s company, AgroCenta is a digital food distribution platform creating shared value for businesses and smallholder farmers.
In 2018, AgroCenta beat 64 other organisations the world over to win US$500,000 in the Seedstars World competition for startups in Africa and Asia.
By Pamela Ofori- Boateng/ Business World Ghana Copyright 2019 ©