How To Raise Money For A Business...Private Investing (Part 2)

This is part 2 of how to raise money for your business from investors/lenders other than the government and the different ways in which  "private investors" can assist in funding your company by either being a:

Venture Capitalist- are firms that normally invest money in start-ups in exchange for equity in the company. They do a proper analysis of your business before investing like your business plan, the business financial statement and the other details to determine what is the expected return on investments for them.

Angel/Seeding investing(investors) -They operate similar to venture capitalist. These are private individuals investing their money into a start-up. These are investor like any other investor need a ROI but the capital given by the angel investor can be either converted to debt or ownership of equity.

Crowdfunding – here, you can appeal to the public virtually in most cases to fund your business. This trend is growing in other parts of the world. With South Africa most crowd funding platforms are assist courses such as NPOs and student fees.

So, here are some popularly known private investors or lenders

Banks – The top 4 banks in South African do offer funding to small business, obviously with a list of criteria that you need before they grant you with the assistance. They offer competitive interest rates. Therefore, if you will be sourcing funding from them it’s always good to shop around and make sure that what they are offering will be best suited for your business profile. Not only that, the banks do give workshops for those businesses that have requested funding from them, so it’s not just giving you the funds but making sure that they guide you throughout the process.

Rising Tide Africa – So here you have a group of women angel investors wanting to invest in African start-ups. Where there’s a woman’s touch you now that there’s an added softness to the approach. So, they generally have networking sessions throughout the year. They are all about educating and training women to become knowledgeable angel investors and if you want to become an angel investor they also offer mentoring. Their investments primarily focus in digitally and tech-enabled companies especially those that are owned by women.

Kgatelopele – They invest in businesses with the potential to provide good returns to the shareholders, obviously. Basically, they aim to develop and manage businesses from short term to long term. Kgatelopele generally focuses on investing in the early stages of the start-up. On the site they do show you exactly the different types of funding they offer and the whole evaluation stages.

Goodwell Investments – With this investor, the focus is more on investing in fintech start-ups and overall inclusive growth where the potential business will ultimately generate good income generation opportunities for the community. Goodwell invests in early stage businesses throughout Africa and India.

AKRO – This company/organization is about helping entrepreneurs and start-ups. They offer venture funding. So, they do not only offer the assistance with venture funding but should you finding yourself as a business or entrepreneur missing that “link” in your business, they offer consulting services too.

Vumela Fund – They focus on funding for high growth small micro-enterprises and with returns and good economic impact and ultimately create jobs. So, with Vumela they offer non-financial growth support, they give preference to majority black owned businesses, they also offer consulting services in a form of market access though supplier development.

Lulalend - This lender offers loans from R20 000 to R1.5 million, much like banks but the turn around time to a request is 24 hours. They offer different payment terms from 6 months to 12 months and everything is done online. For those that are skeptical about doing business online, it is highly recommend that you do more research and read some reviews. 

Psssh I am aware that some companies fund businesses as a social investment strategy or something along those lines, whereby a company would have a competition where start-up companies sign up and pitch their ideas and explain to the “lender” why they need to fund their companies and eventually the best business idea/model wins funding. Always look out for these competitions online and on radio. Furthermore, if you are an entrepreneur understand what it is that you want for your business, it’s also important that you educate yourself on whether you want a loan or rather you would want an equity funding. I did not include how much funding these investors and lenders offer because it varies and in most cases an analysis will be done before the funding is granted. Not all private investor give preference to black female businesses but if you fall under that category and your business is worth investing, then you have no reason but to succeed in your business.