Everyone now knows that tech startup is the current big thing as we hear daily news of tech startups receiving thousands and millions of dollars on a monthly basis as funding and investment.
Africa is not left out in this trend as a lot of startups especially technologically inclined once have attracted thousands of dollars from both foreign and local investors.
So do you have a tech startup idea but funding is keeping you silent, today, i am going to show you how you can easily get funding for your startup or business idea without selling your soul.
First of all, before you can think of getting sustainable funding from any source, you most have an ideal and realistic business plan. A business plan will tell the mode of operation of your business as well as the revenue generation model and the problem your business is built to solve.
So once you get your business plan ready, you can then ask for funding from the various sources below
FAMILY AND FRIENDS
This is the first source of funding especially when you come from a family that is well to do. However, your family members will not just throw money at your business without being sure that your business would not be a failure.
So this is my advice, get some tangible results in a small scale and then ask them for funds not to start your business but instead for funds to scale it.
You can also ask for loans from family members just in case they cannot give you the money just like that. Sometimes, asking for a loan will make them feel that you are more serious and trust you with their money.
Just in case you did not know, when the top startup companies today where starting up they actually got their first round of investment from family and friends. This is quite because the founders where students and did not have much, an example of such companies is Google.
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PERSONAL SAVINGS AND SALARY
At least, if this is your first startup, the most reliable source of your first funding is definitely meant to come from your personal savings or salary you get from a job. This is because to attract money, you have to spend money. However, if your salary is not able to get your business to the startup point you required, I would always advise you start small instead of running from one angel investor to another.
If you do not have a job yet, I would advise you get either one or a skill to get your business idea up and running.
When it comes to loans for a startup or business idea, microfinance banks tend to be the best source compared to commercial banks. This is because they happen to be more interested in the growth of small businesses and startups compared to commercial banks and also the requirements to get a loan from a microfinance bank is far more easier and considerable than that of a commercial bank or any other financial institutions
GOVERNMENT OR PRIVATE GRANTS
Grants are often referred to as money given to a set of selected entrepreneurs to kick start or scale their business. In Africa, they are a lot of businesses and philanthropic men and women that have non governmental organizations with the sole aim of funding and encouraging young businesses.
Example of just grants include the pan Africa business grant and the tony elemelu grants.
For your business you can get a grant ranging from $5000 to $50,000.
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ANGEL INVESTORS AND VENTURE CAPITAL
Angel investors are rich and noble business who are in the business buying shares and parts of business in turn for funding the business. The businesses that get funding often go public as they would have to be immediately listed in the stock exchange so that the angel investors can cash out their money in a larger form.
If you are planning on starting a business soon but all you want is venture capital, to a reasonable extent, you are wasting your most precious resource which is time. You have to get started fist so that when these angel investors start seeing your results, they will virtually beg you to receive their money.
The only form of people that get angel investment at the beginning of their business are those that have being in the first class business world or those who have other great success in the past.
According to the startup story of Iroko TV which has received thousands of dollars in funding, they did not start the way they are now and surprisingly, they did not start up with a lot of money, in fact, they started using a free youtube channel but that did not stop them from scaling.