From VC4Africa: Overcoming the Access to Financing Challenge
We hear it all the time here at the EE - when we ask entrepreneurs of various levels, what challenges they face regarding their small business, "lack of access to finance" comes up almost immediately. There simply isn't enough funding, or viable platforms to apply for funding, to meet the demands of SMEs. But that's just one side of the story. To better understand the issue from the other side of the table - the Funders/VC side - investors in the VC4Africa community were recently asked, ‘What is the biggest challenge that comes with investing in the African space?’ View the poll results and an excerpt from the article after you click.
The results:
The excerpt:
To read the rest of the post, click here. What do you think? Share your thoughts and stories about making your business more attractive to investors in the comments section below.From the poll VC4A investors identified trust & corruption as the key challenge they face investing in African businesses. Members also highlighted fraudulent loan scams, overcoming the currency gap and generally a fear of the ‘unknown’ as additional hurdles that needed to be overcome. Respondents mentioned that generally there is still too little understanding of the local market conditions needed to make a good assessment of the business potential and that investors too often under-estimate good management in the investment process.
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Schmooze FM expands, ‘In our experience a key gap is investment readiness of potential opportunities, we see a lot of start up projects requesting huge sums with little track record and an unproven concept. Entreprenuers must be willing to pilot their project, ideally on their own, before applying for funding. This proves the business model and provides for a much more comprehensive investment proposal.’ @Wkwamiof expands,’In my experience many entrepreneurs seeking funding underestimated good management, or quality of management as a critical component of investment readiness. The quality of management goes a long way to mitigate other risk factors mentioned in the survey and should be given more weight by entrepreneurs.’
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