If you are looking for ways to fund your business then this read is for you. Every business gets to a stage where profits aren’t sufficient to fund its expansion. The only next logical step as an entrepreneur is to seek funding in exchange for either ownership percentage or a percentage of your profits.
Looking for funding is a challenging and sometimes tedious process but it can be a little easy if you know where to look and what is required. Here are some funding options available to you:
Most governments set up programs to help SMEs in their countries. These programs usually give money to SMEs to assist them to either operate or expand. In Ghana, the government introduced the National Entrepreneurship and Innovation Plan (NEIP) to provide support to startups and small businesses. Government grants are usually awarded to businesses that have the potential for job creation or support employment initiatives for women. Grants are a great option for entrepreneurs because they are not paid back. Which in turn makes the grant application process a rigorous one because of the high volume of applications.
One of the ongoing government grant schemes is the Presidential Business Support Programme. This is an initiative of the National Entrepreneurship and Innovation Plan (NEIP) under the Ministry of Business Development. The program is aimed at assisting Ghanaian businesses with Business Advisory Services and funding to scale up and create jobs.
These are usually wealthy individuals who invest directly in small businesses in exchange for equity. Angel investors prefer to invest in the early stages of a business and tend to require the right to supervise the company's management practices. These investors often invest in business within their field of expertise so they do not only provide extra funds but contribute their experience and network of contacts. Angel investors usually keep a low profile thus making them very difficult to find. Below is a list of Angel investors and their target businesses:
Synergy Capital Managers target underserved markets and sectors across West Africa, to unlock the potential of leading SMEs in the sectors such as agro-processing, e-commerce, manufacturing, etc.
EVafund is dedicated to mobilizing capital and sustainable tech experience to invest in small and medium-sized African internet-related companies. EVA Fund eVentures Africa Fund was launched in 2010. However, since 2016, the fund has fully invested and is currently considering the launch of a second fund.
WBAF opened its first country office in Western Africa in Ghana, 2019, aiming to ease access to finance for businesses from start-up to scale-up. The ultimate goal of WBAF is to generate more jobs and champion social justice worldwide.
Venture capital is quite similar to angel investors. What sets them apart is venture capitalists are firms while angel investors are individuals. Venture capital firms prefer to invest in startups, early-stage and emerging companies that have been deemed to have high growth potential. Venture capital firms provide funds in exchange for equity as well. The main criteria for venture capital firms are the speed at which your business is projected to grow. If you can meet this requirement, your business will have a higher chance of getting some funds. Below are two venture capital agencies to look out for:
The Ghana venture Capital Trustfund provides financial resources for the development and promotion of venture capital financing for SMEs. Its mission is to provide credit and equity financing to eligible VCFCs to support SMEs.
Oasis Capital Ghana was established in February 2009 as growth and venture capital fund manager. It seeks to provide risk capital in the form of equity, quasi-equity, and profit-sharing facilities to entrepreneurial businesses in Africa.
This is a relatively new way of getting funds for your business and one which is gradually gaining momentum in Ghana. Crowdfunding allows entrepreneurs to raise usually small amounts of capital from a large group of individuals via the internet. The money raised via crowdfunding is used by entrepreneurs strictly to finance their businesses. Raising funds via crowdfunding platforms is the easiest but your business has to attract lot