Written By Damilola Faustino
Finance has always been a problem for many businesses and startups. A large number of them have folded up due to lack of funding. However, we hear in the news almost on a daily basis that a Nigerian startup has won thousands of dollars from investors and Venture Capitalists. These startups must have done the following:
1. Try to market your business at networking functions
Networking allows you to informally pitch your startup ideas to potential business partners and investors. If your idea is clear and unambiguous, you may find someone that is interested in working with you. So, when you have a networking opportunity, arm yourself with all the information you need to effectively sell you business.
2. Show results first
It may be a bit difficult for a relatively new startup to secure funding because it cannot show any business results. So, before seeking investors, you should work on getting customers and results. Do not manipulate the results because the investor will always audit.
3. Enroll in a startup accelerator
Unlike in the past, there are now so many startup labs in Nigeria. The pioneer is CCHub. There are others. You can join these startup accelerators so that they can offer you everything you need to run a successful business. They can also expose your business to investors.
4. Have co-founder (s)
Your chances of attracting funding or investors are higher if you have co-founders. They are much more confident because all business decision is not invested in the hands of one person or individual! So no matter what, look for two serious, talented, committed and reliable business partners.
5. Ask for advice
Seeking advice from a potential investor is one of the creative and strategic ways to attract them. Through this, you will build a relationship with them. As the relationship grows, you can begin to let them know what you really need. Never ambush or cold-call an investor. It usually comes off as desperate!
6. A clear path to making money
Investors love their money and they will never allow anyone to throw it away. Hence, one of the first question you will be asked is how to I get a return on investment? If you cannot define or state that clearly, sorry you will never get any investment.
7. Get an investor that is also a partner, not just a check
Granted, you need the cash to boost your business. The is not everything. The investor should also be able to offer something beyond money. It is better. This is good because they can make corrections when you are going the wrong way.