Posted By: key2naira | 9th August 2020 | 13 | 1368

Starting a business can exhilarating and fun, exciting. You feel very happy because, you are about to become a CEO of your company and business. It makes you feel like an important person; the major reality is that you are not going to start the business with ordinary sand. You need money to start the business.


Getting money for business for a business is very challenging. Yes, even if you know the type of funding that suit your business need.


Funding a business can be very challenging especially if you don’t have enough money or savings. Many people with good business ideas did not break through because they don’t have money to start their business.

I am going to list and explain 11 ways you can get fund to start your business. I am sure you will find one or two that will work for you.

  1. Bootstrapping/Self Funding

Bootstrapping is also known as self funding is when as individual self funds their business. It is kick starting your business with your savings and little operating income from the business.

Bootstrapping is not for the feeble minded. It is not for anyone who is not discipline to forgo the pressure of the present for a future reward.

To successfully Bootstrap your business, you have to develop a business model with a clear revenue model. Because, the money in the bank will deplete in no time. You have to have a structure in your business that allows you to watch every expense like a hawk.

You have to choose your team wisely. Choose team members with complementary skills so, you have on cost of some basic required skills needed in the operation of your business. Additionally, you have to learn new skills continuously; don’t hire or outsource a job you can do.

Networking and building relationship is another important ingredient of Bootstrapping. When your network is solid, you can get resource for the startup without breaking the bank.

  1. Family And Friends

If you don’t have savings to start your business or you have exhausted your savings, the next set of people to consider is family and friends. Consider family and friends when you are credible and trustworthy because you wouldn’t want to lose your relationship.

Most times, when family and friends give you money, they are investing in you not necessary in the business. However, you still have to go about it the right way. Draw a business plan and be upfront with them. Let them understand the business venture and any challenge that come up.

Specify whether you are taking their money to return it or are you going to give them a stake in the business. They have the right to know when to expect their money back or return on investment.

Whatever you do, don’t betray their trust. If things go bad, communicate to them immediately.

  1. Crowd funding

Crowd funding is one of the new ways to startups to get funding. It is letting large number of individuals fund a new business venture.

When you have exhausted your savings and help is not coming from friends and family, the next funding avenue to explore will be Crowd funding. Crowd funding gives you access to a good number of people either via social media or Crowd funding site.

Entrepreneurs have raised hundreds of thousands to millions of dollars through Crowd funding. With Crowd funding, you can pitch to a large number of investors. Some funding projects are reward based while is equity based.

Examples of Crowd funding sites to Nigerians are khp connect, Keep helping people international, 234 connect etc.

  1. Angel Investors

Angel Investors are high net worth individuals who invest in early state of a startup. These individuals are normally affluent and inject money into a startup for equity or convertible debt.

Angel Investors look for high rate of return on their investment that the normal traditional investment opportunities. The terms of investment for Angel Investors are more favorable when compared to other lenders. They invest in the entrepreneur starting the business than the viability of the business. Therefore, team strength is very important to them.

Angel Investors can be found in crowd funding sites. Some angel investors also provide mentorship for business owners. Several prominent companies including Google, Yahoo and Alibaba, stemmed out of funding from Angel Investors.

  1. Microfinance Banks

If your business doesn’t have the wherewithal to collect commercial bank loan, Microfinance bank loan will be a viable option. Microfinance bank loan provides financial services for people who don’t have access to conventional banking services.

 Microfinance bank gives individuals, group, entrepreneurs, and organizations access to credit facilities and loans that facilitate their businesses. Microfinance bank loan usually come at a higher interest rate and the loan can be repaid in small installments depending of the terms and your contract.

The processes involved in getting Microfinance bank loan are not as tedious like the commercial bank. Microfinance banks in Nigeria are Lapo Microfinance bank, AB Microfinance bank ETC.

  1. Bank Loan

This means of business funding has been in existence since time immemorial and is the first go to place for most businesses when seeking loan to fund a business.

Commercial bank loans should not be the first option for funding a business venture. Depending of the type of business, you should have explored other means of business funding mentioned above before seeking bank loan.

To facilitate a bank loan, you should have engaged with financial institution first not just for a loan but for other banking services like savings or current accounts operation.

With time in the future, the bank will be familiar with you as an entrepreneur and your business. Then, you can apply for a bank loan to fund your business.

To secure a loan, a commercial bank will require your financial information as a person and as a business. They will require collateral from you to guarantee and secure the loan.

  1. Venture Capitalists

Venture Capitalists is a private equity investor who makes his funds available for investing in companies or startups with high growth potential in exchange for equity stake.

Venture Capitalists are normal formed by limited partnership where the partners invest into the Venture Capitalists fund. They set up a committee that makes investment decision of their behalf.

Venture Capitalists do not invest in early stage startups, they invest in startups that are about to commercialize their ideas. They use their funds to buy controlling stake in the company, help nurture it and they look for a way to cash out.

Before Venture Capitalists invest in business, they look at the management team, the market size and a product with a strong competitive advantage. Most Venture Capitalists are experienced entrepreneurs, so they will look at the industries they are familiar with.

Most importantly, venture capitalist seek to influence the direction of the company, therefore, they look for an opportunity to own a large percent of the company.

Some Venture Capitalists in Nigeria includes Venture platforms, Greentree Investment etc.

  1. Strategic Partnerships

If you have a viable business idea, you may seek out a co-founder or partner who has funds to fund the business idea. The partner may be a silent partner who is not involved in the day to day operations of the business or they can choose to participate in the daily activities of the business.

You will have tp draft an agreement that states the stake of every partner involved in the business. You will also have terms and conditions for each partner for your business continuity. Trust is very important in partnership structures so it is important that you choose a partner that trust you and you trust.

  1. Startup Incubator/Accelerator

There are many companies that run incubation and acceleration programs. They provide office spaces, mentorship and support to startups at different levels of growth. Their main goal is to prepare these businesses for investment by their angel investors or venture capitalist.

Hubs that run incubation programs target businesses at their early stage that are still building and modifying their businesses. Acceleration programs are targeted at startups that are at the stage of commercializing their products offering to the market.

Incubation and acceleration can be linked to the different stages of child development. An incubation and acceleration helps and nurtures a business to crawl and probably walk while an incubation and acceleration helps a business to run and make giant business.

When a business is admitted to their an incubation and acceleration program, their chances of getting funding increases the hubs running these programs have to programs.

  1. Government Grants

The government has been paying attention to small businesses and entrepreneurs recently by providing financial support for their businesses. One of the ways they support small businesses in through grants.

A Government grant is a financial support given by Government to small business owners in the country. The government focuses on different sector that have potential impact on the economic stability of the country.

Grants are not repaid but can always be monitored by the Government.

There are many Government grants. They include federal government grants for agriculture, national institute of health, Cyber Tip line grants, bank of industry, Federal Government grant application from World Bank, social intervention fund of the federal government etc.

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