Embrace Diverse Funding Portfolios, Experts Task Entrepreneurs

In order to engender sustainability of businesses, some investment experts have tasked entrepreneurs with embracing diverse funding portfolios available in the capital market, government institutions and other sources

The experts gave the advice on Monday at the Youth in Business Forum (YIBF) with the theme: “Accessing Government and Institutional Funding,” in collaboration with Morgan Capital Group, in Lagos.

Senior Vice President, Business Development, FMDQ Group, Jumoke Olaniyan, said the possibilities of growing money by taking advantage of debt instruments and equity in the financial markets by startups are endless.

Olaniyan identified some of the products in the financial markets to include equities, debts, securities, bonds, commercial papers, promissory notes, and alternative assets, among 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 (SMEs) 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 startup stage before you grow in stage to bonds and other higher investments.

“The SME octagon principles, which look 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 advice 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 trusted business, must not be neglected.”

Also speaking, a member of Rising Tide Africa, a group of female angel investors,  Hetty Ugboh said the group is committed to supporting businesses from seed to pre-series investments with funding of between $20,000 and $100,000.

Ugboh stated that companies with developed products and markets under finance, agriculture, healthcare, education, technology or essential service would be considered for investments.

She, however, stressed that such startups must meet at least three of the 17 United Nations Sustainable Development Goals in their operations.

“There’s a 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.

The Managing Director, Morgan Capital Group,  Dipo Olomofe stressed that the invested funds must be used to expand the businesses and must not be diversified to other affairs.

The  Managing Director, Infrastructure Bank Plc, Ross Oluyede 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 and inadequate record keeping are part of the challenges facing applicants for government intervention funds,” he said.