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Funding is crucial for a business or startup to flourish especially in Nigeria where raising funds can be a bit difficult. Not only will it allow the business to grow but also to move on the right path. The process of getting a young business off the ground isn’t easy, and keeping it moving in the right direction can be even more difficult.
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The global economy is constantly changing, and businesses must follow the markets and be prepared for other funding opportunities. Starting and growing a business is more than just having a great idea. It requires the will to succeed and the ability to finance the business from start to finish. While it’s important to be able to fund the business yourself, you can explore other opportunities for capital as well. Whether the decision is to opt for a bank loan, an angel investor, a government grant or a business incubator, each of these sources of financing has specific advantages and disadvantages as well as criteria used to evaluate your business. Here’s an overview of seven typical sources of financing for start-ups:
  • Personal Investment: This is an investment with one money and personal assets.
  • Love Money: This is often referred to as patient money. It is money loaned by spouses, friends and family.
  • Venture Capital: This involves giving up some ownership or equity in your business to an external party. Venture capitalists who invest in your business will expect a healthy return on their investment, often generated when the business starts selling shares to the public. They mainly focus on technology-driven businesses and companies with high-growth potential in sectors such as information technology, communications and biotechnology.
  • Angels: These are wealthy people who invest in businesses owned by others.
  • Business Incubators: They focus on the high-tech sector by providing support for new businesses in various stages of development, incubators will invite future businesses and other fledgling companies to share their premises, as well as their administrative, logistical and technical resources.
  • Government Grants And Subsidies: Government agencies provide financing such as grants and subsidies that may be available to your business.
  • Crowdfunding: This is a way of raising money to finance projects and businesses. It enables fundraisers to collect money from a large number of people via an online platform. 
The primary focus is on how startups can raise funds through crowdfunding and the crowdfunding platforms in Nigeria. Crowdfunding is the idea of democratizing the flow of money into a project or business. Crowdfunding means that businesses do not need to chase down investors anymore or even bank loans.
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Basically, you can place your brilliant idea on a crowdfunding site and watch people fund you from all over the nation. Several projects and businesses which wouldn’t normally become a reality, have blossomed as a result of strong backing from the public through crowdfunding. Today, there are a good number of crowdfunding sites in Nigeria to turn to when in financial need. It works by just submitting a project to the crowdfunding site and the site reviews it before posting. In the application process, they require you to fill in the amount needed to start the project along with the projected fundraising span. After that, it’s left to people to go through and make donations if they believe it would work. After the fundraising time elapses, the site hands over the money to you, the creator.  Here are the three top crowdfunding platforms in Nigeria
  1. Naijafund: This platform empowers Nigerians to raise money for anything including personal needs and businesses. With Naijafund, you can throw open your financial challenges for everyone who wishes to support to do so. Also, one can link his/her social media account to the platform and ask for funds from friends. The platform is completely free to use, however, it reduces a 10% fee from each donation you receive.
  2. Quickraiz: Quickraiz is a crowdfunding donation platform based in Nigeria. It provides donations and fundraising for various campaigns such as communities, business, education, health, social cause, environment, etc. It features private companies, various payment methods, and social media support.
  3. Fundme NG: This is one of the crowdfunding websites in Nigeria that can help a person get funds for any project. it is one of the suitable places to accept donations as the interface is easy to understand. The platform has five basic requirements for using the online crowdfunding platform:
  • Project: This is what you want to work on.
  • Funding Goal: The target amount to be raised.
  • Owner: A brief about you or your team working to bring a project to life.
  • Contributors: The generous donors who will be funding your goals.
  • Rewards: This is optional but important if you are raising a campaign to build a product. The reward is a kind of benefit the donors receive after completing the project. The money raised is 100 percent yours without any withdrawal fee attached, donors bear the cost.
Finally, if any individual has a solid idea that would work and people would buy into it, they can hop on any of these crowdfunding sites in Nigeria to get the financial backing needed. However, the idea must be good enough, mind-blowing and something that would actually work for people to buy into it. Putting something shabby or what wasn’t well constructed wouldn’t get any funding. This way startups in Nigeria can raise funds for new projects and products without too much difficulty.  Featured Image Source: Investopedia
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This article was first published on 2nd February 2022

eyimegwu-ekene

I am an accomplished content creator and recently delved into technical writing. I enjoy using my skills to contribute to the exciting technological advances and create awareness of evolving technological trends in Nigeria.

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