Funding opportunities for Nigerian startups
Starting a business in Nigeria can be a daunting task, especially when it comes to finding the
right funding source. There are several funding options available for startups in Nigeria to get
the support they need. Each of these sources has its own set of advantages and can be used to
fund a startup’s operations. Here are some of them:
Loans: A loan is a type of financial assistance provided by banks and other financial institutions
to individuals and businesses to help them with financial needs. Loans are offered with interest
rates, which means that borrowers must pay back the loan amount plus interest over a set
period of time. Several banks and financial institutions in Nigeria are working with the
government to provide business loans under government-aided funding programs such as
YouWin, BOI, NPower and so on. FINTECH has opened the door to quick and easy short-term
loans for small businesses and individuals in Nigeria. With major private organizations like
Paylater, KiaKia, & Quickloans taking the lead in providing short-term credit facilities it is more
easier than ever for start-ups in Nigeria to get loans. The key criteria for approval of any
business loan are how profitable the business is and how the borrower will manage to repay.
Grants: A grant is a fund given by an organization to an individual, non-profit organization or a
business for a specific purpose. Unlike loans, grants are not to be paid back. The Nigerian
government had a variety of grants available for small businesses, ranging from federal
government small business grants to state-level incentive programs. The federal government
provides small business grants through its Small Business Grant Program (SBGP). This
program offers grants of up to 5million naira for qualified small businesses in Nigeria. They also
provide grants through agencies such as the Bank of Industry , Small and Medium Enterprises Development Agency of Nigeria(SMEDAN), National Information Technology DevelopmentAgency (NITDA), Tony Elumelu Entrepreneurship Programme (TEEP), GroFin Fund, African Young Entrepreneurs Empowerment Nigeria (AYEEN), Lagos State Entrepreneurs Trust Fund(LSETF).
Venture Capital Firms: Venture capital firms are investment companies that provide funding to
startups in exchange for equity in the company. This is one of the funding opportunity available for Nigerian startups. They often provide strategic guidance, mentorship and networking opportunities to the companies in which they invest. They may also take an active role in the management of the company, serving on the board of directors or providing other forms of support. Major venture capital firms in Nigeria include EchoVC Partners, Microtraction, Ingressive Capital, GreenHouse Capital, Alitheia Capital, Co-Creation Hub Nigeria, Ventures Platform (VP), TLcom Capital, Novastar Ventures Ltd
Angel Investors: Angel Investors are individuals who invest in startups and small businesses in
exchange for a share in the company. They provide capital, business advice and networking
opportunities to startups. Angel investors are different from venture capital firms in that they
invest their own money rather than investing funds from other investors. Angel investors can be
found through personal networks, business incubators, and angel investor groups.
Private equity firms: Private equity firms are investment firms that invest in companies that are
not publicly traded on a stock exchange. They raise funds from institutional investors, such as
pension funds and endowments and use the funds to invest in private companies. The goal of
private equity firms is to improve the performance of the companies in which they invest and
ultimately sell their stake in the company for a profit. Some private equity firms in Nigeria include
African Capital Alliance , Verod Capital Management , Helios Investment Partners, Sahel Capital, Development Partners International.
Crowdfunding platforms: Crowdfunding is a financing method in which startups raise funds from
a large number of individuals via an online platform. These platforms provide an online
platform for people to donate money to support a project or business idea. Crowdfunding
platforms are becoming increasingly popular in Nigeria as a viable source of funding for creative
projects, startups and other initiatives. Entrepreneurs and innovators can easily raise funds from a global audience and turn their ideas into reality with the help of these online platforms. These crowdfunding platforms make it simple and easy for Nigerians to obtain the funds they need to pursue their dreams. They allow users to create campaigns, set goals and accept donations from people all over the world. Crowdfunding can be a good option for startups that have a strong social media presence and are able to effectively promote their
campaign. Some examples of crowdfunding platforms in Nigeria include Kickstarter, Indiegogo,
GoFundMe, Farmcrowdy, Quickraiz, NaijaFund, LendingClub, ThriveAgric, Porkmoney, Patreon.
Business Incubators: Business incubators are organizations that provide support, funding,
mentorship and resources to startups. The goal of a business incubator is to help startups
overcome the many challenges that come with starting a new business such as developing a
business plan, securing funding and building a team. Business incubators can also provide
access to shared resources such as office equipment, meeting rooms and administrative
support. Some examples of business incubators in Nigeria include Co-creation Hub, Tony Elumelu Foundation, Ventures platform, Wennovation Hub, Growth Capital Fund.
It is important for startups to carefully consider the funding platforms options available to them
and choose the option that best suits their needs. They should also be prepared to pitch their
business idea to potential investors or lenders and have a solid business plan and financial
projections in place. Startups need to have a strong business plan and a clear path to
profitability. They also need to be able to demonstrate that they have a unique and innovative
product or service that addresses a real market need. Most of these sources invest in
companies that have a unique and innovative product or service, a strong management team
and a clear path to profitability. They also look for companies that have a large and growing
market opportunity. Once you’ve compared your options and finalized which of the listed
funding sources you want to go with, it’s time to apply for the source that fits your financing
needs and that you qualify for.