Saturday, 2 December 2017

How many times should an Entrepreneur apply for funding?

This question is a tough cookie, but like the squirrel in the picture above let's analyse the situation.


Assuming you are in my position where you are looking to raise additional funding or you either haven't raised funding at all, there this question we ask ourselves.  How do we raise funding and which channels should we attempt to raise money from. 

Let's take a minute to remember the cold glass of "Tequila Sunrise" I had at Jabi Boat Club to celebrate the seed funding HubbonNG had raised a couple of weeks ago.

Whilst enjoying the cool "ocean" breeze (yes we know it's a lake, just allow it).

Honestly speaking, I need to buy an Iphone to sell my market. I can be a part-time photographer.


Apply for funding as many times as you can to raise as much as you need to scale your business. But know this!, don't become a "FundingPreneur". 

If you don't have paying customers, you are not running a business. It's advisable to raise funding as a startup to ensure that you can run the business optimally to break even. You can always raise additional funding to scale operations. Simple!

There is a school of thought that says that you can never raise enough money. 

Raise as much as you possibly can!

Unto more important things!

Here are 5 different ways you can raise funding.

1. Bootstrapping

Bootstrapping means starting you launch your business personally with your own funds. This occurs usually when you're the ideator. You need to start work first before you can attract team members as well as follow on funding from different channels.

This is really why I feel people should have savings. You can't build a business when you are hungry. It's a no-brainer. The easiest way is to work for a company for a bit, gain experience, and then save money for the final EXIT.

Or as you work for someone, start working on your dream as a side-hustle till that glorious EXIT. 

Or you can be like me that was doing an internship (NYSC for Nigerians) and  use your "stipend" (allawee) to fund your startup expenses.

You need to start making moves on your business before anyone else can have confidence in what you're doing and put money in.

2. Family and friends

I am not really a fan from raising money from family. I think I won't mind friends. 

My parents agreed to fund my business for an "undisclosed" fee since January, till now I haven't seen alert.

This life!

For investors, they feel more confident that if you have bootstrapped your business to a certain level and then raised funding from family and friends. This helps them understand that the people closest to you believe in your dream and are ready to bet on it. This is how they can bet on you too.

3. Grants

Otherwise known as "AWOOF". If you're not a Nigerian just ask your Nigerian friend for an explanation, you should have one.

I know the feeling!

Just look at how awoof money has changed my life. CEO of Life!

 Grants are most definitely the hardest things to qualify for. But I am sure PrepClass can give us tips on raising funding from grants. 

The good part about raising grants for your business is that they are "NSA" (no strings attached). Well not exactly, they would most likely monitor your company to ensure that you're not using the money to buy land and Toyota Camry.

In fact,  I am starting a go fund me page. Don't you think this car is befitting for a CEO like me?

4. Incubators and Accelerators

These are also viable options. Also very tough to get into their cohorts as spaces on their programs are highly competitive.

ie. Your startup needs to be solving a real problem and perhaps have high potential for growth. I know Ventures Platform would require an "MVP" (Minimum Viable Product) for your startup to qualify into one of their cohorts.

Incubators as the name implies, help you to build your idea into a working business (MVP). Some incubators fund their startups, some don't. They literally take you through classes and attach you to advisors that help you grow your startup/ Some incubators are also linked to accelerators to lead you unto the next stage of funding.

I was going to name an incubator program, but they have refused to pay me for shoutout. No market from me.

Sorry for yourself!

Accelerators also as the name implies help you to scale your business through more trainings and equity-funding. 

Most accelerators I know fund your startup for equity in your startup (they have a share of your company). There might be accelerators that don't take equity but as usual I don't know everything.

This obviously means that you ought to have a business that they can "accelerate". 

There are a lot of accelerator programs. I am going to name 5 platforms that can help accelerate your business with good funding.

PS: I am tagging them because I am planning to get into their cohort, I just want to make sure that we are a certain way ahead in this our business before applying so that when they fund us we can use the money to buy land. Obviously I am joking. Or am I?

b. YCombinator
c. Google LaunchPad accelerator
d. Spark Accelerator
e. MEST ( I think they're a mix of an incubator and an accelerator). 

Do your Research!

5. Angel/VC Funding

This is possibly where you can raise additional funding for early stage funding. You should have already raised from all of the aforementioned platforms before going for this. 

Although nothing is written in gold, any funding you see, collect. Well not caterigocally speaking, always ensure that the terms and conditions and the equity sharing suit your ideals for the business. You should ensure that the investors, asides their money, are also bringing additional expertise to the team!. But that's my opinion. Experienced Entrepreneurs can shed more light on that!

Just like some incubators and accelerators, angel and VC (Venture Capital Firms) also fund startups that have shown traction and growth to further scale their operations. On average, they could fund much higher than accelerators and the funding comes based on their analysis of the worth of your money and its capacity to grow. It is negotiation-based. You would do well to call on a lawyer to help you take a look at the terms and conditions.

This usually a long-winding process. I remember when  Iyinoluwa Aboyeji shared his angel/vc round of fundraising for FlutterWave at Ventures Park. It is no joke!.

If you stay in Abuja and you need a space to work from. You should come here, their spaces are really conducive!

 I even have my own personal experience with Angel Investors, I am still in that lull period, yet to determine if they are still interested in funding HubbonNG or not.

I cannot come and die. My Co-founder and I have decided to put in everything we've got and we are definitely okay with the odds of our startup being successful. We are putting in the work!

I wish you all the best of luck as you raise funding for you startup.

Best regards,
Ejieji Muna

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