70% of entrepreneurs in a recent survey say that raising capital is one of their biggest problems while running their business. Another 50% fail because they run out of capital. With this in mind, this post is dedicated to breaking down the different ways entrepreneurs can access capital to scale.
1. Personal Savings; If you haven’t already invested money from your personal savings to boost your business, I dare say you are not in business. Investing some of your own money will usually make investors and lenders more willing to partner with you as the business grows. You should start with this before seeking capital from others.
2. Friends & Family; Raising capital through friends and family is a viable option. They are individuals willing to invest some of their personal finances because they feel loyalty and affection towards you or are motivated by the start-up idea. Capital from family and friends could be in the form of loans or equity in your company, the form should be agreed on to avoid issues in the end.
3. Research and Pitch for Grants; Angel investors can be a good source of capital for your business. Angel investors look for companies that have already built a product and are beyond the earliest formation stages, if your company fits this, you should research, and pitch to these set of investors.
4. Apply for Investment from Venture Capital firms like Ingressive Capital; this process is usually rigorous but gives you access to more capital, access to the VC’s network and business support services if you are successful. Again, you would have to do your research on each venture capital firm and if they align with your business values as each firm has different criteria. If you own a tech-enabled start-up solving vital problems in Africa or Sub-Saharan Africa, you can apply to Ingressive capital here
Now you know the different sources of capital available to you as a founder, decide on what stage your business is at, its needs, and which of this capital is better suited for your business.
