How to raise capital for your business idea
Today, I want to talk about raising capital and in specific will share with you some of my own personal experiences with the hope that you can pick a thing or two.
Those who have been following me (those who aren't better start doing so now) for some time know I have been working on a few start ups i.e Campus Doctor, Bororboro and Gokafoods.
In the past 3 years I have collectively raised over Shs 200 million in financing for them. That's been locally and knowing the investment environment in this country first hand, I can say that's been commendable and promising.
My major source of financing has been close friends, online followers and grants. This year for the first time my family was willing to entrust me with money for investment. It took years for them to get to this stage where they could trust me with money.
I have friends who have entrusted me with money they weren't using or didn't need to use urgently. I have collected money through crowd funding online and have managed to win some grants that have pushed us some where.
However this isn't a feat I managed to achieve over night. All the people who have entrusted me with money at some point are people who have been following me for a long time.
People who have with time gotten to trust my ability or seen a progressive pattern in my journey. This is not something you build in a day, a month or even a year. It's something that takes time, dedication, laser sharp focus and commitment to a particular cause.
I have people reaching out to me to help them with crowd funding for their ideas because they saw success with my own drives. Truth is people invest in people first before ideas so the need to make yourself investment worthy is key.
Do you have a track record of competence, trustworthiness and ability to deliver? You will need to first work on something on your own to gain investor confidence.
No one invests in ideas, people invest in people and working ventures so push on your own to a point where others can see where your headed with whatever it is your pushing.
Rid yourself of the excitement of money. I have seen many get money and get excited then end up using the money for totally different things.
Two years ago we got a grant with a group of other start ups. The money came around November 2019 but by end of December 2019 most had blown the money buying cars, land and on merry making during the festivities.
We are using the last bit of that money two years down the road because we never diverted a penny and it's pushed us far. We are in line for another grant which will take us another two years probably with the business not making money yet.
So as you look to raise money ensure you put it to good use as doing so will push you to the next stage and with every stage you grow, the more likely you'll get financing.
Investor willingness and confidence increases with your growth as a start up. Truth be told, 70% of the money I have used to build and get these start ups to where they are hasn't been my personal money.
So build some value, organise your self to be investor/financing ready. When you get money or the trust of investors never abuse it.
I will says this again, NEVER abuse investor trust. Commercial financing (banks) is expensive and impatient so investors, friends and grants are a good source of financing if you can demonstrate that you are solid and dependable.
Jaluum Herberts Luwizza is a Speaker,Writer and Business Columnist with the Nile Post. He is also a Business Consultant at YOUNG TREP a Business Management and Consultancy firm that helps people start and grow profitable businesses and YTS Associates Certified Public Accountants.
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