Let us cut to the chase and agree that capital is needed to start, run, and grow a business of whatever ambition. Creative capital comes from the founders but CapEx and OpEx require hard cash and it is simply a question of whose money gets deployed.
Despite the brouhaha over the availability of funding for startup enterprises especially so in technology where the product is intangible, the truth is that traditional hurdles remain firmly in place; the proverbial friends and family living in the same economic conditions may be hard-pressed, reluctant even, to participate in any enterprise and the corporate centers of capital still call for security or other show of capability. Granted, self-preservation and de-risking is a fact of life and business.
Assuming that an entrepreneur has put time and applied their creative capital to get to a minimum viable product that validates the customer's need and has a defensible business model, how can they access the capital necessary to take their business to the next level?
The Tefo Mohapi Show: Isaac Mophatlane talks about government accountability, the ICT sector, and tech startups
Mastering storytelling as an African startup
This has two facets, and both involve a disconnect with a key public.
The first is between what startup founders think the value of their offering is and what consumers extract and the second is understanding the motivations of a potential investor. On the consumer side, getting a deep appreciation of where your product or service lies is important for sinking roots and driving utility. The best source of capital is a paying customer and aligning to their interpretation of value will appeal and attract others.
Investors are deeply agenda-driven and loosening the purses strings also calls for discovery of what that agenda setting is. Not all capital is created equal.
Think differently when raising money for your startup
Look around and gems are hidden in plain sight. Soil merchants continue to appeal to our desire for the tangible and achievable. This has seen large tracts of land subdivided into plots that are snapped up on a promise of future value appreciation.
Cunning and charismatic fellows make the gullible part with money under the guise of some amazing secret sauce that can deliver extraordinary monthly returns. The latter is criminal enterprise but the purpose of both is to prove that there is available capital.
The Capital Markets Authority Regulatory Sandbox in Kenya could offer a way for innovative financing models that can see businesses segue into the Growth Enterprise Market Segment at the bourse.
Mastery of your narrative and innovative fundraising is what you need as a startup.
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