We need more female founders. Half the challenge lies in securing the funds needed to sustain their businesses. Many women are deterred by the prospect of launching a business, especially in today’s uncertain economy, where stability has become a rare commodity.
What’s even more intimidating is figuring out how to fund a business. A study in the International Journal of Economics, Commerce, and Management suggests that bootstrapping can enhance the performance of small and medium-sized enterprises (SMEs) in Southwest Nigeria. While using personal funds to grow a business may have its advantages, many women lack the disposable income to take this route. Furthermore, starting a capital-intensive business in a high-inflation environment poses significant risks, making the journey even more challenging.
Instead, many tech founders are turning to Africa’s rapidly growing venture capital ecosystem to secure funding for their businesses. While raising VC funds can be incredibly challenging – particularly for female founders – it also presents an opportunity for those with innovative ideas to scale their ventures. With the right approach, more women can tap into this resource to actualise their visions.
If you’re ready to pursue VC funding, here are 7 essential tips to help secure investment for your business:
1. Your Business Must Be Scalable
It’s easy to get caught up in your ideas and see more value in them than outsiders might. The best way to demonstrate your value is through tangible growth. Ensure your business is set up to scale, and make sure this growth trajectory is clearly evident to VCs. Market size matters – you should be growing impressively compared to your peers. Conduct a thorough market analysis, confirm that your operations are scalable, and optimize your business model for sustained growth.
2. Prepare Your Pitch Deck
Your pitch deck will be needed in every room you walk into. It should outline your value proposition, market opportunity, business model, traction, team, and funding needs. Make sure it is engaging & show the numbers!
3. Show Strong Market Validation
Many founders have ideas they believe to be great but haven’t externally validated. Ask yourself this: Do people care about this idea enough to buy in? You must demonstrate that your product or service solves a real problem and that people are willing to pay for a solution. If there is interest in your idea, highlight this through metrics such as user growth, revenue, or strategic partnerships.
4. Finding VCs is like dating…find your match
Research VCs that align with your industry, stage, and geography. Understand their portfolio enough to know where you fit in. Personalise your pitch to every investor, showcasing why your startup is a fit for their portfolio.
5. Display a Strong Team
You want to assemble a team of subject matter experts and impressive industry leaders. Emphasise the expertise and track record of your team. VCs often bet on founders, so showcase your ability to execute and adapt.
6. Prepare for Due Diligence
Aside from your tailored deck, prepare detailed financial projections, legal documents, tech stack information, customer data, and other key metrics applicable to your field / idea.
7. Don’t give up but don’t give too much
Fundraising is hard and requires patience. Don’t give up. Be prepared for many “unfortunatelys,” but use constructive feedback to iterate and refine your pitch continuously. However, don’t distribute your pitch deck like a bulletin to a congregation. Instead, be intentional about who you pitch to and how many VCs you approach. Quality over quantity is key.
It may sound daunting, but it is certainly not impossible. Here are three founders who have achieved this:
1. Odunayo Eweniyi – Co-founder and COO of PiggyVest, a leading fintech startup that helps Africans save and invest. PiggyVest has raised $4.15m+ over 9 rounds. Investors include Flutterwave, Launchpad Accelerator, VilCap Investments and more.
2. Fara Ashiru Jituboh – Co-founder and CEO of Okra, a fintech infrastructure company driving open banking solutions in Africa. Okra has secured funding from top-tier investors. Okra has raised $21m. The World Economic Forum, Accenture Ventures, Arpan Shah, Base10 Partners, and Hongxia Zhong are 5 of 8 investors who have invested in Okra.
3. Chidalu Onyenso – Nigerian climate-tech startup Earthbond, which simplifies access to clean, affordable energy for African SMEs, has secured funding from Madica, a structured investment programme designed for pre-seed stage startups in Africa, to boost its financing capacity. Earthbond has secured US$200,000 in funding from Madica and will also participate in Madica’s comprehensive investment program, which includes 18 months of dedicated company-building support.
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