Compare to what happen in America and Europe, a lot of Africa businesses struggle to attract right investors. Businesses in Africa have difficulty attracting investors as result of the following:
Potential market size- investors are interested in ideas or businesses with a large market size potential. This gives the investor assurance that their investment would be recouped in the future. Nobody invests in a Company that cannot grow beyond few million Dollars.
Trust –when you invest in a company, you are actually investing in the people. Investors put their money only in people they trust. Trust is very important in business. Companies seeking for investors should show high level of trust both in act and appearance.
Experience of the team - investors evaluate the experience of the team to be sure that they can deliver on the business objectives. Consideration for the investors are usually around professional qualification of the team, previous experience as entrepreneur, diverse nature of the team. A diverse team background is usually preferred.
Hiding the business ideas – So many Africa entrepreneurs are usually afraid of people stealing their Small business ideas in Nigeria. People invest in businesses after they have thoroughly understood the business idea. You do not need to expose the whole idea at the beginning of the relationship but you have to do that as the relationship progresses.
No business plan – business plan projects what the future of the business may likely be and investors want to have insight to the future of the business. You do not need a super business plan but a simple plan prepared to show the expectation of the future is right for a small business. Depending on the size, you may then need to engage the services of a professionals to assist in preparing the plan.
No clear focus or product – if there is no clear focus for your business, investors may also not be able to invest in the Company. If you cannot explain your business in a sentence, then you may need to rethink it.
Your technology or product is obsolete – even if you have a good business idea but the product or technology you are creating are no longer relevant then you will not be able to get investors.
Selfishness – it is common to see many Africa entrepreneurs trying to be the sole owner of the business instead of bring other team members who can add value to the Company. Investors typically prefer a team of founders to a one-man founder.
Before you seek for investors for your next venture please consider the above point. You can always register on Ventureroorom.net to connect to with investors.
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Ventureroom Joined: October 1st, 2016 Articles Posted: 3
