Fola Olatunji-David is currently the Head of Start-up Success and Services at Google Launchpad Africa, helping African start-up succeed through deliberate support under the Launchpad Program. Over the years, he has worked to raise Africa’s next generation of innovators through mentorships, speaking engagements and more.
In this same light, he joined us at Ingressive capital to host a Twitter chat on ‘Startup Positioning for Funds’. The chat which took place on the 28 of February was aimed at arming entrepreneurs with relevant facts about raising capital for their business.
While talking about raising capital and its importance to founders Fola said, “A business needs money to thrive, whether it’s just making money to validate their business or raising external funds from investors to grow.”
Nevertheless, he said, “not every business is ready for investment, so it’s important to know your onion.” By onion, he was talking about the facts and myths regarding funds for business, so I asked him, how and when does a business become investment-ready?
In response to this, Fola Olatunji-David said “Start-ups can get investment in various ways. In early days, you can get money from friends and family, they typically don’t care about what you have done, they just trust you (and don’t want you to be hungry). Not a lot of prep needed, but you also don’t get a lot of money”
According to him, you also can raise money from business angels, they typically know their onions and need to see a strong business plan and model. Readiness at this stage is showing that you’re serious and are going to solve a problem.”
You can also get investment from incubators/accelerators who will typically take a piece of the company and give some money. Readiness here is showing a good team and that can solve and iterate fast, and be reachable (you will meet lots of other people here), he said.
Finally, he mentioned, you can also raise institutional money. VCs, PE, PF professionals who need to see that your business can achieve massive scale and that you can grow quickly. There’s a due diligence process that all parts of your business are assessed.
At this point, I thanked Fola for giving such amazing insight and proceeded to ask him basic steps entrepreneurs seeking funds need to take?
As a start-up, get your books ready, keep records, track numbers (revenue and expenditure). Get known by people who can fund you and build a business that is credible. Every investor does their investigation (due diligence). So ask them their requirements when you speak, he advised.
It was a pleasure to host Fola Olatunji-David, didn’t want to stop asking him questions but I realized that every entrepreneur deserves a chance with Fola, so I opened the floor to take questions from our audience.
Adeola Adesunloye took the chance and asked, for a start-up team in the ideation stage with a plan, concept, team, structure and an MVP, plus other requirements, is it a good idea to approach VCs directly while seeking funding before hitting the market or the traditional ways of funding are the best bet?
Replying to him, Fola said, In normal circumstances, raising from a VC at idea stage is tough because VCs typically ask for some form of validation. The only exception is when you have a super team who have a track record and can show they can execute.
Amazing, amazing stuff from Fola Olatunji-David, I sure did not want the learning to end but for time sake, and because I definitely know that a day would never be enough to take up all he had to offer, we proceeded to wrap it up.
Thank you for chatting with us.
