ENTREPRENEURIAL TIPS

   RAISING CAPITAL FOR YOUR BUSINESS          

Peradventure, one of the most common questions asked by new entrepreneurs is “How do I raise capital?”.  What a lot of entrepreneurs fail to realize is that when your business is ready, it is actually not that difficult to raise capital. But if your business is not ready, then it can be almost uncertain.

Before one starts to raise capital, there is a need to understand the different types of capital that may be available to your business.

                        

               

• FAMILY AND FRIENDS : If all you have is an idea, but you are yet to build a product or have any real usage that can validate your business model, then you are likely looking for friends and family to invest in you. The only reason they are going to invest in you is because they believe in you as a result of prior experiences with you.

             You would really need to hold up that trust they have in you by using their money judiciously.

                              

• SEED INVESTORS : Seed investors may be professionals who invest and help their investments to succeed or people with another full time occupation whose passion is investing in startups.

If you have a product or at least a working prototype and strong evidence that your product will be used and ideally paid for by customers, then you could approach seed investors.  

A seed investor needs to see more than just an idea, but not fully developed business.

• VENTURE CAPITAL: This is the type of capital raise that’s dreamt about by most entrepreneurs. This type of capital comes from firms/ groups of professionals that specialize in finding promising companies that are ready to grow rapidly make investments in such companies, and often over a number of years help them grow as fast as possible.

                     
         These type of investors usually need to see a mature product and compelling facts that you have a great way to make lots of money and grow very quickly.

Other types of capital that might work for you include:

1. crowdfunding sites like kickstarter

2. Loans from banks. 

In conclusion, connecting with the right investors require weeks or even months of painstaking practice.

Wish you all the best in your entrepreneurial journey.

P.S – Kindly drop a comment if this article was helpful.