Despite the intimidating number of startups on the rise today, lots and lots of startups still keep finding new investors for new businesses. Nigeria’s Wakanow, despite bad balance sheet, recently secured the global alternative asset manager The Carlyle Group to invest $40 million  in the online travel agency focused on West and East Africa, with principal operations in Nigeria. While this may be quite easy for the company, it may be entirely bad for other startup businesses, with little or no business history. However, here are five ways you as a startup can apply to attract investors to your business.

Join A Network of Investors

As a startup, you may not even have enough funds for your business, not to talk of being an investor, but joining a local network of investors may turn out to be a way out of maze. There are so many angel investors who provide funding for a startup, often in exchange for an ownership stake in the company. An angel investor likes to see: 

• The integrity of the founders.
• The gap in the  market which your business seeks to solve
• business plan, clear, definite and ambitious
• Any early evidence of obtaining traction toward the plan.
• Interesting technology or intellectual property.
• An appropriate valuation with reasonable terms.
• The viability of raising additional rounds of financing if progress is made

Also See: How To Invest In Startups And Make Gains

There are so many angel investors network within your locality. In Nigeria, Angel Networks such as  Nigeria Angel Investors, Lagos Angel Network, Entrepreneurs – Lan
collect together all the angel investors around towards helping startups to grow.

Online Fundraising Platforms

While equity fundraising is banned in certain countries like Nigeria donation-based crowdfunding may be an alternative. These crowdfunding platforms have become so popular that startups now resort to using them. You may consider the A.Y.E Trust Fund, Donate-ng.com, Imeela and others. Getting money here is not guaranteed, but you would get the necessary publicity for your business.

Startup Accelerators

Startup accelerators, also known as seed accelerators, are fixed-term, cohort-based programs that include seed investment, connections, mentorship, educational components, and culminate in a public pitch event or demo day to accelerate growth. There are popular startup accelerator programs around, most of them asking for an open invitation for applications from serious startup entrepreneurs. Once accepted, you get to keep developing your work, as well as introductions to other investors, business advice and help in staging future fundraising rounds.  No matter how frustrating some of them could be, there are still startups that preserve and get funded. Just make sure you know the terms and look for a good fit before you apply, or accept the help. It is always better to do your research well and find the best of the best based on success stories. Popular accelerator programs in Nigeria include Tony Elumelu Foundation, Co-Creation Hub,  Wennovation Hub, Startpreneurs, Itanna, etc.

 Venture Capitalists 

Venture capitalists professionally manage venture capital funds and invest in companies with huge potential. They usually invest in startup businesses with expectation of equity and move out when there is an IPO or an acquisition. They provide expertise, mentorship and act as a litmus test of where the organisation is going, evaluating the business from the sustainability and scalability point of view.

However, venture capital investment is often appropriate for small businesses that have passed the startup phase and are already generating revenues.

However, venture capitalists often have a short term focus. They come, invest massively in the company and often look to recover their investment within a three- to five-year time window. Thus, having a struggling product or service, venture capitalists may not be interested in you. They usually focus on larger opportunities that are a little bit more stable, especially companies with a strong team of people and a good traction. Sometimes, they often expect to control your business. There are a lot of venture capitalist firms in Nigeria, such as Cordros Capital Ltd, Venture Garden Group, Unique Venture Capital, Lighthouse Investment Ltd etc.

Find co-founders

Investors are not only interested in your products or services; they are also interested in your team. “Angel investors and venture capitalists often look for talented co-founders, as opposed to a single founder, which is a rarer case,” says Ben Lang of Mapme.

You may, therefore, consider choosing the right leadership team for your startup as having the wrong co-founders can ultimately be more hurtful to your business than having no co-founders at all. However, if you can find the perfect co-founder, it can make the starting process infinitely easier—even beyond attracting investors. “Starting a company alone is very difficult,” says Ben. “Having partners gives you people to rely on, which can be a huge boost for your company.”

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.