How to get investors for my Business in Nigeria

Everybody wants their business to succeed but for that to happen, it will periodically need investments from external sources.

In Nigeria, so many businesses have the potential to grow but are greatly limited by funds. With all the opportunities for expansion, inability to secure funding often keeps a business in one spot for a long time.

Whether you are just starting your journey into the business world or you are an established business owner, finding the right investor may be the difference between struggling and succeeding in business.

This article will give you a detailed guide on how to attract an investor for your business in Nigeria.

Before we dive into explaining how to attract an investor for your business in Nigeria, let’s first look at why you need an investor in the first place.

Some Benefits Of Having An Investor Include;

1. An investor provides the capital you need to expand your business operations and enter new markets.
2. You are given the financial support you need to hire additional staff and develop new products.
3. Beyond financial backing, the right investor can offer mentorship on your entrepreneurial journey and timely counsel in the midst of a difficult situation.
4. The right mentor will bring you into relationships with industry connections and high net worth individuals.

How To Get An Investor For Your Business In Nigeria

• Develop a Strong Business Plan
• Network with potential investors
• Check out Incubators and Accelerators
• Prepare a Compelling Pitch Deck
• Apply for funding from government and institutions
• Check Crowdfunding platforms

Developing a Strong Business Plan

A business plan is a document that summarizes how you intend to run your business to make sure that it’s profitable and stands the test of time.

Your business plan is a very important document that not only guides you as you build the business, it also persuades potential investors that your idea is viable and worth their investments.

To succeed at getting an investor for your business, you must have a well written business plan, handy and available at any time necessary.

No investor wants to throw away their money, and so, a thoroughly written business plan is your first impression of proving that your business idea is a fertile ground for their investment to grow.

Some very important parts of your business plan include;

Executive Summary: Here, you will give a sharp summary of your business idea, mission, vision and goals. Choose your words wisely.

It is the first part your investors will read so you can’t mess this up. Mention what makes your business different from your competitors and why you are convinced that it will succeed.

Market Analysis: Carefully analyze the market your business will operate in.

Identify things like the size of the market, your target audience, and your major competitors.

Show investors that you understand the market dynamics very well and that you’ve found your sweet spot – a viable niche.

Business Model: This section answers the question of “How will your business make money?” The people who will invest in your business will be interested in how sustainable your business model is.

Financial Projections. Here, you will detail how much you predict your revenue to be, estimated profit margins and analysis of how you will break even.

Show that you have figured out your business finances well and are ready for different circumstances without going bankrupt.

Requirements for Funding: This is the second where you state exactly how much you need, how you will use it and the Return on Investment investors should expect.

Your focus should be on how much value the capital will create and the kind of growth that will be seen as a result.

Now that we’ve taken time to discuss the business plan, we can sharply proceed to other steps.

2. Network with Potential Investors:

In Nigeria (as almost everywhere else in the world), who you know is as important as what you know. In some cases, it may even be more important.

That is why your relationships should not only revolve around broke friends in your neighborhood. Hehe.

How?

1. Attend Networking Events: There are a lot of events that give you an opportunity to network with high net worth individuals.

Events like the Lagos Startup Week, Techpoint Build, and Social Media Week Lagos, are wonderful opportunities to meet new people and connect with potential investors.

Events like these don’t only update you on what is happening within your industry, they also connect you with people that matter to you.

1. LinkedIn: I love LinkedIn. It is a very powerful tool for building meaningful connections with investors, especially the ones not based in Nigeria.

Be sure to optimize your profile and clearly highlight the value proposition of your business and the funding you need.

Join important groups and engage in relevant discussions. This will make you noticed. Also, share content that is educational and related to your industry to make you stand out as an authority in your field.

iii. Join Angel Networks like the Lagos Angel Network (LAN) and VC4Africa. Some investors in angel networks are always on the lookout for startups to invest in. If you engage with them, you will greatly increase your chances of being invested in as a result.

3. Check Out/ Consider Applying at Incubators or Accelerators.

Even though the words incubators and accelerators are often used together, they do not mean the same thing.

Incubators are great for businesses that have not yet started or are still trying to find their feet. These programs help business owners to polish their business ideas and build their empire from scratch.

Startup accelerators on the other hand, give coaching, training and resources to companies who have advanced a bit. These programs assist companies that have an MVP on ground already and assist them to grow fast, under record time.

Incubators and accelerators are another great option to try if your business is still in the early stages.

Apply to Programs: Incubators like Co-Creation Hub (CcHub) and accelerators such as FATE Foundation and the Tony Elumelu Foundation all have some programs that are structured in a way to speed growth for startups.

If you are accepted into these programs, you can be sure of the mentorship, office space, and some capital (seed funding) to push your business to the next level.

4. Prepare a Compelling Pitch Deck

To raise the funds you need for your business, one of the most important things to pay attention to is your pitch deck.

Everybody loves a great story so convert your pitch deck into an interesting story about your business.

Start by introducing a problem that people can relate to, which your business is intending to solve, and how it will solve it.

You can first use data or real life examples to explain the pain point. Then give your solution and explain why it is the best available option. This will further persuade your potential investors.

Highlight some successes you’ve had already; like your customer base, revenue growth and partnership, etc. This traction shows your investors that your business is already making progress and has the potential to scale.

Add testimonials from customers who have been satisfied by your service, industry experts, or even partners. These endorsements can make your business to be seen as a credible brand to invest in.

A section should be dedicated to show your team members’ experience and qualifications. Shed light on any past successes they’ve had in business that are relevant and will be useful to your brand.

End your pitch with a clear call to action. Whether you are asking for funding or a partnership, be clear and confident about it.

5. Apply For Funding From Government And Institutions

There are a lot of government and institution initiatives that have been created to support small and medium enterprises (SMEs). Some of them are;

Bank of Industry (BOI): The Bank of Industry gives long term financial support to small and medium enterprises They have various loans that are given to businesses in different sectors with a special attraction to unique areas like manufacturing, agriculture and technology.

Tony Elumelu Foundation: The Tony Elumelu Foundation Entrepreneurship Programme has been the answer to some people’s prayers. The organization gives seed capital and mentorship to businesses across Africa. Every year, they select 1,000 entrepreneurs to support with $5,000 in seed funding.

Lagos State Employment Trust Fund (LSETF): In Lagos state, the LSETF gives loans and grants to business owners in Lagos State. They also offer training and programs to help businesses succeed.

6. Engage in Crowdfunding

In a situation where you are unable to raise a huge amount of money from a single source, you can raise little amounts from a large number of people online. This process is called crowdfunding.

Some crowdfunding platforms in Nigeria where you can raise capital for your business include NaijaFund and GoFundMe.

Clearly share your business idea, what you need funding for and what your contributors will get in return. You can use short videos, good quality pictures and customers’ testimonials to make your campaign both engaging and compelling.

Conclusion

Financial limitations should not keep your business grounded for too long. Not when there are numerous opportunities to get the right investors for your business.

Sometimes, getting the funding you need may not be as easy as you would like it to be. However, with persistence, a viable business idea, well written business plan, and the right opportunities to pitch your ideas convincingly, you might be on your way to business success sooner than you imagine.