Looking for start up capital to fund your business? There are more and more finance options opening up to African entrepreneurs. Venture capital from small business investment companies is just one example.
As SME’s are increasingly recognised as central to building functional economies, companies that offer finance options for small businesses are just starting to grow in Africa. But navigating your way through the formalities of any financing institution can be confusing, so here’s a basic look at just one financial option to guide you.
As any potential entrepreneur may know, finding capital to start a business can be both a daunting and challenging task. Therefore, the best way to go about business is to inform yourself by exploring every possible opportunity. The trick is to know what is available to you and understand your options. This article looks specifically at venture capital, what it is and how it could help your business grow.
What is venture capital?
Venture capital is money provided by a group of investors to small businesses. It is sometimes abbreviated to VC or known as risk capital. This money is provided to entrepreneurs to help them with the start-up capital they require to finance their enterprise. It includes financial backing for advertising, research, infrastructure and products. Venture capital firms or small business investment companies offer venture capital to entrepreneurs with new small-scale businesses.
How does venture capital work?
Venture capital is a specific form of financing which does not involve loans or debt. Venture capital is viewed as an alternative form of financing from traditional banks. The money that venture capital firms or small business investment companies provide acts as a long term investment. In this way, the money is given in exchange for a share in the success of the business. This means that the venture capital is offered in return for part ownership of the new business, which usually infers that the venture capital firm will be involved in some managerial decisions. The investment company does this to ensure that the new business is nurtured. An investment company aims to increase the value of the new business and make a return on its investment.
Who is involved in venture capital?
Small business investment companies which are also known as venture capital firms usually deal with risk capital. These firms or companies manage the pooled money of other investors in a professionally-managed fund. The companies are made up of partnerships between a group of people who are investors. This partnership may be an involvement between investors, investment banks and financial institutions that pool their investments. Different venture capital firms may take different approaches to investment. For example, some firms may focus their investments towards a specific industry or region and engage themselves in unique ways.
What do venture capital firms look for in a business?
Venture capitalists look at the potential a business has to succeed as a criteria for an investment. This is in contrast to banks, which use past performance to assess investment; a near impossibility for a business still in a start-up phase. Venture capital firms tend to be quite selective when choosing potential investments. This means that venture capital is often focused at companies with especially strong growth potential. Venture capitalists also seek specific requirements from new businesses for their investments. Just two of these aspects include a concrete business plan and a capable managerial team.
Remember, to find the most suitable financing for your business, try to explore as many options as possible that are available. Not every finance solution is tailored to suit every small-scale business. Two organisations which are members of the African venture capitalist association include Technoserve and Oiko Credit. To check out these organisations and other financing institutions listed on the Africa Report website, go to our online business directory at http://www.africareport.com/directory/resources/
femi
July 1, 2010
good your assistance will do me good if only you can help send the finance options open to the following business small, medium, large scale and liability company
OWEL EVANCE
July 5, 2010
I AM A SMALL SCALE BUSINESS MAN OWNING A STUDIO IN TANZANIA AND LOOKING FOR FINANCE TO BOOST MY BUSINESS
EDWIN JOSEPH MWAKATIKA
July 5, 2010
I’m a Tanzanian, With two viable ideals which need to put into practise but with no start up capital, thus if you can also look even for an individual with viable ideal but with litle finance you should also help not only group of peaple.
Because there is a lot of individual person with viable ideal but if you trie to be in group you find that other are not commitet to the issue.
Try to look for it if possible to implement.
with regard
Edwin Joseph
mose
July 15, 2010
i find this whole concept fascinating and infact beneficial to the majority of us young enterprising Africans. speaking for myself, i have actually drawn a lot of inspiration from your tv programs. way to go Africa
Evans Owusu-Sakyi Kwaku
July 17, 2010
I am the chief exercutive officer in the ngo called CEHLFA INTERNATIONAL and for our strategic measures to elliminate illegal unfriendly environmental activities that degrade our world,We need funding to project our course for objectives come true!
Ismail
July 26, 2010
This makes alot of business sense.There’s really a point in this.
Thank you so much!
Dr. I. Annatte
July 29, 2010
I am an extension specialist with the National Agricultural Extension and Research Liaison Services, ABU, Zaria, Nigeria. My research interest is in Supervised Rural Dairy Cooperative Extension. This project is to integrate Farmer organization, milk production, collection, testing, transport, processing, packaging, distribution and Marketing.It also involve development of software for multi-location project management solutions.Its viable but requires long term investment. Does your financial plan capture such extension research plans?
Simon Chi
July 29, 2010
I have a very viable business looking for partners to fund the business or sell it off outright. It is been approved and registered by Nigeria Agency for Food & Drugs, Administration and Control (NAFDAC).
Interested person or companies should contact me for more details.
gumbo majubwa
August 16, 2010
How are you? I am Tanzanian young and energetic man. I have my own business ideas that I hope can be put into practice and bring back successful results and profits. Always im thinking big and become one of successful entrepreneur not only in my country but also Africa and beyond. Therefore I am looking for the partners or investors to put their capital in this business ideas.
Thank you,
Gumbo
Micheal Eddie
August 29, 2010
I am looking for a financial start-up loan or a partnership to purchase 10 FMCG Franchise stores in South Africa. This is a current concern and each store is making a monthly turnover of R5 million each. The total value for each store is Rand 10 million each. The capital loan that I am looking for is Rand 100 million over a two year period. This loan will be paid back over a 10 year period.
For more information please e-mail me at:
micheal.eddie@yahoo.com
Ann
October 22, 2010
I am a young business lady from Kenya, i opened a small business for selling affordable cloths, cosmetics and baby products in rural Kenya and i am currently monopolizing the market here. the demand is more than i can manage on my own. i would appreciate if i could get any funding for the business. anyone interested could please contact me on my email
wwwwanita@gmail.com.
Thank you.
Africa Report Team
October 25, 2010
Hi Ann
We see you have made a listing in our Marketplace under Sielta Interiors. Thank you, that is the right place for your request. Your business request has also been selected to appear on our Featured Marketplace, which means it will display on the homepage. Click here for more information about the Featured Marketplace.
Best of Luck.
Ann Wachira
October 25, 2010
Thank you AFRICA REPORT TEAM, i appreciate your guidance and assistance, i just wish more people would be able to access your site and advance together with us. God bless.
Ann
fajriyansah
December 1, 2010
I accidentally through this web .. and I think the web is nice and find a solution for me
Samuel Gada
December 20, 2010
I the Manager of AMUNYA CLEANERS SERVICES operating in Abuja Nigeria, we render services to the community on enviromental management and general cleaning services, we really need capital to boost our busines most especially on purchassing of equipments, how can we access you assistance and what are the conditions.
thanks.
Enid Ballard
December 23, 2010
I the Manager of AMUNYA CLEANERS SERVICES operating in Abuja, Nigeria. We render services to the community on enviromental management and general cleaning services. We really need capital to boost our business, most especially for purchasing equipment. How can we access assistance and what are the conditions. Thanks.
Abukari Issahaku
February 4, 2011
I am an entreprenuer and own a small IT printing and secretarial firm. My target is to expand as big as possible to reduce poverty of this part of the country and also employ a lot more people. My firm is in Yendi in the Northern Ghana. Any financial possibility my expansion from you?
WINSTON TAYLOR
May 22, 2011
Dear Sir/Madam,
I am writing to enquire about help and assistance from Africa Reoprt.
I run a small loan company that gives loans to poor people and families in Africa to start their own businesses. This is to empower families to care for their children and families, to enable families to educate their children through the profit they make from their businesses.
I am writing to enquire about help and assistance that I can apply for to Africa Report.
Could you please inform me on help, assistance and support that is available through Africa Report and how to apply for them. The purpose of the help is to develop the programme and extend it into other villages.
I look forward to hearing from you.
Yours sincerely,
Winston Taylor
Africa Report Team
May 23, 2011
Hi Winston,
You can look for resources in our Directory and by placing a Marketplace advert on our website. You need to contact any resources directly, with a business plan and find out what their requirements are.
We do not provide funds, as we ourselves are an NGO that focus on providing a platform to advise and connect entrepreneurs and financiers. Feel free to use our resource and platform to connect to potential financiers.
Here are instructions on How to make a Marketplace listing.
Africa Report Team
lens adapter
October 8, 2011
Absolutely useful subject material, Really enjoyed looking at.
Cleveland Benbrook
October 20, 2011
Thank You for all the educational reports and info.
Chainda C.
October 24, 2011
I watched an Africareport TV program which introduced me to your website, filled with business information.
It has been a source of useful information. I know I need to unleash the entrepreneur in me.
I would like to venture into beef production. I have almost secured about 100hacteres of land, just remaining with clearance of documents for land ownership. My capital is about $10, 000. Last step: I need more expertise on that type of business to get started!
Africa Report
October 24, 2011
Good day Chainda
We are pleased that Africa Report has been an inspiration and resource to you. Please continue logging onto our website for the latest updates and information on how to grow your business in Africa.
Good luck
The Africa Report Team
Karen Whyte
November 9, 2011
Nothing better than waking up to an insightful post like this. Thank You.
Ed Thimberle
December 19, 2011
Good post!
betathome-italia
December 20, 2011
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January 10, 2012
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