Africa’s ever-expanding tech movement is gaining momentum as it was reported that 2017 was the best year so far for the continent’s tech startups. New research has found that 159 African tech startups managed to attract investment last year, and total funding raised by these companies amounted to a whopping US$195 million. With the vast support received by these organizations, it’s expected that more local entrepreneurs will be forging ahead with their business plans and raising funds to get their companies up and running. But should you go with traditional methods to secure the cash that you need, or is there an advantage to taking risks by going with innovative ideas to fund your business? Here’s what you need to know before taking the first step towards creatively funding your business.
Securing your startup fund: Why you should try the traditional approach first
Going with traditional ways to raise funds for your business, which include taking out a personal loan, or borrowing against a credit card, almost always guarantees that you can have the money when you need it. By going traditional, you have a general idea when the money will be in your hands. However, it’s possible that you may not have the exact amount that you’re expecting to get as lenders – including banks – don’t usually lend huge amounts to startups. Moreover, it was reported that taking out a loan in some parts of the country is getting harder as some African banks have started cutting back on credit extensions.
If you find that you need more funds to get your business running, then it’s time to get creative and seek unusual ways to raise the money yourself. Here are a few alternative funding ideas to consider to finance your startup.
Crowdfunding
Many entrepreneurs have successfully harnessed the power of the Internet through this method. In fact, some crowdfunding campaigns have gotten millions of dollars as people all over the world want to invest in something that they deem has the potential to succeed over time. The challenge here is getting people to put their trust in you, be comfortable with your company, and believe that your startup has the potential to be successful.
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When creating a crowdfunding campaign, you’ll want to be as transparent as possible and provide as much information about your startup as you can. Be truthful—keep in mind that any info that you put out there can be shared, so any embellishment or fabrication will be found and can cause your campaign to be shut down.
Have a marathon or a walkathon
This type of activity is suited for startups that are related to healthcare, wellness, or charities, but it can work for any other types of business too. You’ll need to secure a permit and determine the routes of your marathon or walkathon, and you will need to advertise to get the word out there. Apart from the fees that you’ll collect from participants, you can also sell your specially-branded merchandise such as t-shirts, fans, or water bottles to pad your startup fund.
Music can get you what you need
Entertainment or tech startups can attract a lot of attention by holding concerts, band competitions, or even a dance competition. Ensure that you have enough performers or participants on the big day and sell tickets weeks before the main event. Again, you can sell special merchandise in the venue such as your company-branded lightsticks or water bottles to raise additional funds for your business.
Getting your business up and running can be a challenge, but with a little creativity and some careful planning, you can get the funds together for your venture. Try some of these innovative fundraising ideas to get your startup off the ground.
