ENTREPRENEURIAL

FINANCING: FUNDING
YOUR STARTUP
EDS 411
DR. MAXWELL OLOKUNDUN
 The Concept Of Entrepreneurial
Financing
• Entrepreneurial finance is the study of value and 
resource allocation, applied to new ventures. It addresses
key questions which challenge all entrepreneurs:

• how much money can and should be raised; when should

it be raised and from whom; what is a reasonable 
valuation of the startup; and how should funding
contracts and exit decisions be structured.
 How to get funds for your startup business

• Most people, especially the youths, have business ideas

that can conquer the world, and of course, they need
money for this.

• Some other people may just be pressing or prospecting for

business opportunities that could, either put food on their
tables or argument their existing income Who do you think
invented yam pounder machine?.
 Contd.
•Some ideas are awesome while others are not so super. Likewise some are just
hallucinations. Its like listening to a croaky voice in a musical talent hunt

•However, with super business idea you need a super funding idea to make it work.

•Same goes for any business opportunity.

•Here are some ways you can get funding for your business, so you don’t give up
on your dreams.
 Family and Relations
• Apart from the money in your savings, if you have any, another method for
raising enough money for your business is through family and relatives but
you have to win their trust first.

• It might be a problem trying to get cash from your family and relatives in the
event that they don’t believe in your idea. This is where you need the trust
capital. Nobody can raise trust capital for you except yourself.
• What is your pedigree with money management with family and relations?
 CONTD.
• Obviously, you need to trust yourself, to begin with, in the event that you
need individuals to trust you.

• You should work hard to earn their trust and you need to show your
business thought as one that is achievable with the funds you are requesting
for.

• There is no shame in begging for assistance from your family and close
relatives at all. Just earn the trust of the influential members of your family
circle. Self trust communicates your convictions about your business idea
 Friends and well-wishers
• Outside your relatives, the closest people that can help you raise startup capital for your business are
your friends and well-wishers. But again, the trust capital is crucial.

• They have to trust and believe in your character and capacity before you get cash out from them.
Introduce your business idea and a well-outlined business plan regardless of how little the business
will be; they might just be willing to assist you monetarily.

• Start with your dearest friends; you can guarantee to give them something consequently as the
business grows.

• Friends and well-wishers should come in handy when you want to start a business.
•
What is your pedigree with money management with family and relations?
 Save from existing job or income
stream
• In this state of economy in Nigeria it is understandable if nobody can assist you as
quickly as you want.

• So in other to Fund your dreams, you might have to help build someone else’s dream
too. Get a job, and if you have one already, work for a few years in other to save money
and also gather experience too.

• You are going to need all that wisdom to run your business. You would be an even
better CEO if you have had experience as an employee.
• Savings is culture is not about how much you have
 Development Finance Institutions
• In Nigeria today there is awakening on the part of the government to
increasingly get the Development Finance Institutions, DFIs, to create funds
for startups, Micro, Small & Medium Enterprises, MSMEs.

• Before now they hardly provide funds for this category of businesses
especially the startups. The DFIs include Bank of Industries, Agric
Development Bank, Development Bank of Nigeria etc.
Contd.
• However, you will be required to prove your commitment to the
business by contributing at least 25% of the cost excluding land.

• They would also be looking for that borrower  whose business

character and reputation are incontrovertible;
 Angel investing
• Angel investors are basically the wealthy individuals who provide
capital for a business startup, usually in exchange for convertible
debt or ownership shares.

• Both for the people willing to give you a grant in your business and
the Angel investors, all you need to do is to convince these
individuals with a very outstanding business proposal or plan as it
maybe.
Venture Capital
• Venture capital is a way of corporate financing by which a financial
investor takes participation in the capital of a new or young private
company in exchange for cash and strategic advice.

• Venture capital investors look for fast-growing companies with low

leverage capacity and high-performing management teams.

• They expect profitability higher than the market to compensate for

the increased risk of investing in young ventures.
Buyouts
• Buyouts are forms of corporate finance used to change the ownership
or the type of ownership of a company through a variety of means.

• Once the company is private and freed from some of the regulatory
and other burdens of being a public company, the central goal of
buyout is to discover means to build this value.
• On February 19, 2014, Facebook announced it was
acquiring WhatsApp for US$19 billion, its largest acquisition to date.
Contd.

• When you eventually get this cash, you can’t

afford to disappoint people who have put
their trust in you to build a great empire.
Also you can’t afford to disappoint yourself.
Startups that got
Funded in 2018
Kobo360, a logistics
startup, has In July, the
startup sealed an
impressive $1.2 million
funding round led by
Western Technology
Limited and Nigerian
based Future Limited.
Tizeti
Wireless internet service
provider, Tizeti, closed a $3
million funding round in
September as it aims to
provide high speed internet
services across the continent.
Launched only in 2017, the
startup has laced its services
to cover Lagos and now offers
public WI-FI to about 150,000
users in the country.
 TradeDepot –
$3m
Three year old TradeDepot
is an integrated platform
for trade, providing
valuable information and
services for retailers,
manufacturers, and
distributors. The startup
secured an 
impressive $3 million fundi
ng from Partech Ventures
 in April 2018.
Lidya – $6.9m

Another impressive Nigerian

startup funding round came by
the way of Lidya. The Nigerian
fintech platform secured $6.9
million from a group of
investors led by Omidyar
Network in May 2018. The
Nigerian platform says the new
funding will be used to scale up
its services as well as expand to
other African countries.
SureRemit – $7m
Way back in January 2018,
SureRemit raised $7 million in
Initial Coin Offering (ICO) to
scale its remittance. The
startup aims to disrupt the
$601 billion remittance
industry dominated by
Western Union and
MoneyGram. By using
blockchain, SureRemit seeks
to reduce transaction cost on
remittance payments.
O-Mobile
Multimedia – $10m

Tech company, O-Mobile

MultimediaLtd, 
received a huge $10 mill
ion grant
 from Swiss So.Sui.Ben
Foundation to help
integrate small
businesses into the
digital economy.
Top 10 Early-Stage Startup
Investors And VCs In Nigeria
• Venture Platform.
•  GreenHouse Capital.
• SPARK Capital.
•  Growth Capital Fund.
•  LeadPath Nigeria
•  GreenTree Investment Company
•  Microtraction
•  Lagos Angel Network (LAN).
•  EchoVC Partners
•  SLA Accelerator.
Thank you