Do you have a lucrative business idea but don’t have the funds and don’t know how to attract investors and funding for your startups in Nigeria?
Attracting angel investors or venture capitalists in Nigeria for your business idea is not an easy task especially for startups. In this harsh economy where everyone is looking for how to manage and multiply their money.
The business challenge ever faced by entrepreneurs is raising money for the first time. Some don’t even know how to attract investors to their business and what factors influence their decision to what to invest.
How to Attract Investors And Funding For Your Startup
Before you even think of how you can attract investors for your business idea in Nigeria, you need to know what investors are looking for in a business idea.
It’s not just about creating a million Naira business idea and waiting for investors to hand over their hard-earned money to you. Investors want to know if;
- The business idea is a company or a product. If it’s a product, can it be developed to include additional features?
- Can the business address the need of more than one simple market? What is the estimate of the investor’s return?
- Does it involve prior management experience?
Investors would rather prefer more experience entrepreneurs rather than someone new. They feel you have not started a business before, so you might not know what is involved to grow one.
But don’t let that discourage you. It is believed that, if your vision is good, then it can be shared and you can easily build a team around it. Some investors will want to check the entrepreneur and the team.
Investors will want to check your business model to see if it is expandable, profitable, predictable, repeatable, etc. Your business model will also encourage investors to create a strategic plan on how the business would be able to generate profit.
These are some of the questions an entrepreneur should be willing to answer before seeking to attract investors for your startups in Nigeria. The extra time you use in working on these questions will save you stress in the future.
After knowing what investors want, here are 5 ways you can attract investors for startups and funding Nigeria;
1. Learn How To Sell
Yes, you have to learn how to sell your business idea to investors. If you can vividly explain your business ideas, vision and goals, investors will quickly understand you and gladly invest in your business.
Selling your business plan to investors has two basic strategies to go about it. It involves your marketing effort and network. Your marketing effort ensures you market your business to potential investors who have the money to back you up financially.
Networking involves using all the networking methods you have got at your disposal. Like meeting up with business people, by attending networking events, seminars in your community, etc.
2. Prepare a thoughtful business plan
Don’t just tell potential investors about how successful your business idea and vision will be. You should be able to back up your belief and statement with a detailed business plan.
A business plan help shows potential investors about your competitors, market research, business goals, vision, and how it can be achieved. Your business plan needs to be able to answer any question that would be asked by investors.
Pay a professional business consultant to help you prepare a well-researched business plan that can convince investors. A thorough and convincing business plan is the key to attracting investors in Nigeria.
3. Try Crowdfunding
This is one new popular way entrepreneurs use to raise money for their business. It is mainly done online.
The entrepreneur posts the business concept online on a crowdfunding site and lets investors evaluate it. Crowdfunding in Nigeria is one great way to attract investors in Nigeria to fund your business plan. It gives potential investors what your plans are.
You might not get the exact amount of money you want but at least, it will help a long way.
4. Start With Family and Friends
Go around your family members and look for who will be willing to invest in your business’s vision.
You can never tell, one of your friends or family member may just be waiting for such an opportunity. Promise them a 12-month return of investment and use whatever amount you get from them to start up the business.
It is better for an investor to come from a friend or family member, than someone you don’t know and can’t predict commitment upon.
5. Save Up A Significant Sum of Money Yourself
Another way to also get investors in Nigeria for your business is for you to also save a significant sum of money before approaching investors.
Investors will take you seriously when they discover that you have also put your money on the line.
If you’re not investing your own money no matter how little, investors may ask you why they should invest their money in your business idea.
Caution
- Make sure you pick the right investor. Don’t just take money from any investor just because it is offered.
- You should selectively pick who you want on your investor’s list. You want someone that believes in your vision and that can help and give you advice too.
- One who will let you run your business, and not show you down because their money is involved.
Finding an investor and funding for your business idea in Nigeria is a great advantage as every good business idea and mode needs funding to grow, expand and solve more problems.