Some investment experts on Monday tasked entrepreneurs to embrace diverse funding portfolios available in the capital markets, government institutions and other sources to engender scalability and sustainability of their businesses.
They gave the advice at the Youth in Business Forum (YIBF) with the theme: “Accessing Government and Institutional Funding” in collaboration with Morgan Capital Group in Lagos.
Mrs Jumoke Olaniyan, Senior Vice President, Business Development, FMDQ Group, said that the possibilities to grow money by taking advantage of the debts instruments and equity in the financial markets by startups were endless.
Olaniyan said some of the products in the financial markets include: equities, debts, securities, bonds, commercial papers, promissory notes, alternative assets amongst others.
She, however, stressed the need for entrepreneurs to be eligible and their businesses properly positioned via the adoption of the eight Small and Medium Enterprises (SME) octagon principles to spur investments.
“This is why it is important that your documents, financials, strategies and other business model metrics would be reviewed for the different stages to access capital.
“Crowdfunding short term products are easier to access at this start up stage before you grow in stage to bonds and other higher investments.
“The SME octagon principles which looks at governance, transparency of business documentation, business structure and separation of business funds from personal funding would keep you in check for operations.
“Management must be open to advise from professional parties and the business must have its unique selling point.
“The drivers of the business which is the impact of supply chain and demand on your business must be noted and lastly, discipline which encompasses all the other points seeing that money business is a trust business must not be neglected,” she said.
Mrs Hetty Ugboh, Member, Rising Tide Africa, a group of female angel investors, aimed at supporting start-ups, said the group was committed to supporting businesses from seed to pre-series investments with funding between $20,000 and $100,000.
Ugboh said companies with developed product and markets under the finance, agriculture, healthcare, education, technology or an essential service would be considered for investments.
She, however, stressed that such startups offers must meet at least three of the 17 United Nations Sustainability Development Goals in its operations.
“There’s need for the right board, advisors and the individual passion for the business to ensure a scalable product.
“Paystack started with angel investors and venture capitalists, but because their idea solved a problem, they got investments from several investors globally running into millions of dollars,” she said.
Mr Dipo Olomofe, Managing Director, Morgan Capital Group, stressed that the invested funds must be used to expand the businesses and must not be diversified to other affairs.
He also tasked startups to adopt accurate financial models to help revenue projection for MSME during pitch for investments.
Mr Ross Oluyede, Managing Director, Infrastructure Bank Plc, said that given the potential role of SMEs in developing Nigeria’s economy, successive governments had pursued several policy options towards promoting the sector.
He, however, noted that a good number of SMEs in Nigeria were not aware of the existence of the different sources of funds for SME development; the incentives available for them; and how to source funds from banks.
He stated that entrepreneurs must be able to identify and understand policies on how to access the various government intervention funds beneficial to the business.
“To stimulate long-term private sector funding for the transportation space, the Federal Government provided N25 billion which can be assessed through the bank and it has been playing a catalytic role over the last 10 years.
“This means there are diverse government sponsored intervention funds available for SMEs and the Youth in Business to take advantage of.
“However, poor business planning, inadequate record keeping are part of the challenges facing applicants for government intervention funds,” he said.
