5 Sources of Funding for Young Entrepreneurs
Entrepreneurs often come across as a rare breed of human beings. This is often due to the fact that it takes a certain bent of mind to become one. It takes among other factors, integrity, discipline, courage, the right choice of spouse and hard work to be successful as an entrepreneur and these qualities take both time and persistence to develop.
In addition to developing these qualities, at some point in their quest to grow and develop their businesses, entrepreneurs need life lines in the form of reliable and cost effective seed money. Below are five sources of funding for start-ups.
Seedstars Africa is a member of Seedstars Group, a Swiss-based venture builder that is active and invests in 35+ countries around the world especially in emerging markets in Asia, South America, The Middle East and Africa.
Through Seedstars World, its popular, highly competitive and exclusive start-up competition for start-ups in emerging markets, the company is able to identify promising companies to support with capital and technical help.
In 2014, Seedstars invested $330,000 in SimplePay, a young Nigerian third-party payment processing company that created a solution to disrupt payment services in Nigeria and Africa.
African Women’s Development Fund (AWDF)
The AWDF is the first pan-African women’s grant maker in Africa. Since the start of its operations in 2001, AWDF has provided $17 million in grants to 800 women’s organizations in 42 African countries.
The AWDF is an institutional capacity-building and programme development fund, which aims to help build a culture of learning and partnerships within the African women’s movement. In addition to raising money and awarding grants, the AWDF will attempt to strengthen the organisational capacities of its grantees.
The AWDF only awards grants to organisations, not individuals. It awards grants ranging from $8,000 up to $50,000.
Tony Elumelu Foundation Entrepreneurship Program
Now in its second year, the $100 million Tony Elumelu Foundation Entrepreneurship Programme (TEEP) is an annual programme of training, funding and mentoring, designed to empower the next generation of African entrepreneurs.
Founded by Mr. Tony Elumelu, the successful Nigerian entrepreneur and philanthropist, the fund seeks to identify and support 1,000 entrepreneurs from across the continent each year over the next decade.
Each successful participant in the program gets an initial seed investment of $5,000 after a 12 –week mentoring program. Another $5,000, structured as equity or an affordable loan, is also given to participants who meet certain milestones.
Over the next 10 years, the fund expects to support 10,000 start-ups and young businesses selected from across Africa who will ultimately create one million new jobs and add $10 billion in annual revenues to Africa’s economy.
The TEEP Fund focuses on citizens and legal residents of all 54 African countries. Applications can be made by any for-profit business based in Africa in existence for less than three years, including new business ideas.
Founded in 1948, CDC is the UK’s Development Finance Institution (DFI) wholly owned by the UK Government’s Department for International Development (DFID). It is the world’s oldest DFI with a history of making successful investments in businesses which have become industry leaders.
CDC actively supports businesses throughout Africa and South Asia, and its portfolio of investments is valued at over £2.5bn (year end 2013).
In November 2013, CDC announced a US$18.1m investment into Feronia, an agricultural production and processing business focused on palm oil plantations and arable farming in the Democratic Republic of Congo (DRC).
5. African Development Foundation (ADF)
The African Development Foundation (ADF) is an independent Federal agency of the United States government that was established to support African-led development that grows community enterprises by providing seed capital and technical support.
USADF connects community enterprises with capital and technical support. It helps organizations and businesses in Africa to create and sustain jobs, improve income levels, achieve greater food security, and address human development needs.
In 2014 alone, the USADF gave out 336 grants worth over $50 million and impacted over 1.3 million people in Africa.