Yesterday I had a discussion with a friend about raising capital for startups.
Any startup worth their name here (Uganda & Africa at large) will tell you it’s one of the hardest things to do.
We have very many ideas that if pursued would transform the country and continent but all these face one challenge…Financing!!!
How do I know this, I’ve experienced it first hand..This is my lane, this is my football field.
Like I told my friend, what makes Silicon Valley what it is – is the presence of both ideas and capital to bring those ideas to life.
Ideas without capital is like a car without fuel..It will go nowhere.
Yes, having an Aston Martin parked in your yard without fuel in it is pretty much useless because the car can’t take you anywhere until you fuel it.
Unfortunately for us our investment climate is not developed enough.
We don’t have institutions or individuals whose sole purpose is fueling these ideas with great potential. We don’t have investment banks, hedge funds, angel investors or even venture capitalists.
A lot of our banks are commercial banks and those who have lots of idle money that would be injected into ideas don’t have the investment mindset as all they know is trade (busubuzi like we call it here).
All they know is go to China, buy products and come back sell them with a margin. Now that China and the world is closed, everyone is on pause.
With that we’ve had to find a way to work within the prevailing circumstances. Rather than seat back and fold our hands we’ve sought to find away because where there’s a will, there’s always a way.
With the little hope available it’s important that business owners that seek capital prepare to get this capital.
Organise yourself and have everything in a straight line.
They need to put themselves in a position where it’s easy to get any slight form of money that may be going by be it grants or private capital from individuals who wish to invest in any promising ideas.
Business owners always have to make looking for capital a priority and full time job.
This however comes with building personal social capital first before you can actually receive actual monetary capital.
The truth is people who invest in ideas do so because of who is behind those ideas more than what the potential of the idea is.
Ideas are just ideas so people who invest in them actually invest in the person behind the idea literally.
Here’s where you ask yourself, do I pass off as credible!? Do I pass off knowledgeable and able!?
Do I pass off as someone who can be trusted!?
90% of the times you’ll most likely be getting money from people who don’t know you personally like it’s been in my case.
I have raised money for some of the ventures we are working on like Campus Doctor and Boroboro.
A lot of this money comes from people who have only followed me online and recommendations to their circles that have invested in us because their friend did.
Money is hard to come by so don’t make it harder for you to even get it and when you get it NEVER ABUSE THE TRUST OF THOSE THAT GAVE IT TO YOU because that takes your social capital that you’ve built for years from 100 to zero real quick.
Once you’re blacklisted in financing circles then you’re done with as an entrepreneur. Forget about business (unless you use your own money) and go find a job haha.
I have personally raised about 70M in financing for some of our small ventures in the last 2-3 years.
This is money that has come from people I barely know personally and this has happened because of the things I just stated earlier in this article.
That said we still have an investment environment that’s just growing.
We dream of the day when we shall have people with lots of money lying somewhere looking for ideas to invest in as a full-time job like it’s the case in silicon valley but until then find a way to work your way with what’s available and also cast your net wider/globally.
Africans living abroad are a good starting point as many seek for the opportunity to invest in genuine African ventures.When you get them, protect their money with your life because most times we only get one chance in life.
You can either blow it and be buried for good or take it, make something of it and build on it for life.
Jaluum Herberts Luwizza is a Speaker, Writer and Contributor with the Nile Post.He is also a Business Consultant at YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.