Jul 23, 2017

What Nigerian entrepreneurs should expect from Foreign Investors | Boma Braide

Nigerian Entrepreneurs who start out on their fundraising journey think they will be showered with funding offers but are quickly awakened to the rude shock that they are not able to pick and choose from investors as they would have liked.

Based on experience, you might think that we saw something special in your venture and that was why we approached you. Yes we did but not what you are thinking. We saw an opportunity to add value and make you a truly global business coming out of Nigeria.

Our vision is to see a Nigeria of Entrepreneurs and leaders solving meaningful problems on a global scale.

And in order to achieve this we have set out on a tall mission which is:
To impact 1,000,000 Nigerian Entrepreneurs to DOMINATE their market by the year 2035.

In order to achieve this, we need to state the key things that entrepreneurs should expect from an investor and then do to bring their expectations to life to be able to scale their business to domination.

1.     It is best to keep expectations to a minimum and be spot on about the amount of investment that you require.

2.     A lot of investors are looking for somewhere to sweat their money but not themselves. Isn't this obvious, they are usually very busy people already - otherwise how would they have the wealth to take such huge risks with businesses. You need to keep these investors updated - a consistently timed monthly update of a page or so and a full update with accounts each year.

3.     More usefully there are a small number of investors that are willing to help. This might be as an interested and encouraging observer, at least responding to your updates and occasionally offering some unsolicited help. They are likely to respond well when asked for help.

4.     We find our help is particularly useful at the start of a relationship – helping to challenge and strengthen the brand and product proposition, the strategy and to prioritize action plans.

5.     Having someone with an understanding but more dispassionate about the business helps to create different options and make effective choices for how to grow the business.

6.     An Investor Director should bring an investor’s perspective, so helping make decisions, not only for revenue and profitability growth but to make a business attractive to future investors or exits. They should be a huge help in creating the story to attract investors in the lead up to the next raise.

7.     When setting out on the funding route, think about what you want from your investors. For example, what expertise is most important, what contacts in your industry are you lacking, where are the big risks facing the business? Then have it as part of the conversation with potential investors.

8.     Be prepared to pay fees which can consist of connection and investors fees. Connection being the broker that connected you to the investors and the investors themselves. These fees do not make anyone rich, it is a fraction of the fee that the facilitators of the investment charge for their time out to large corporate organisations, but because a transaction creates a contract and clear expectations of both parties it holds the facilitators to account.

9.     Watch out for some investors that will demand a paid non-executive seat even if they are only investing a small amount. You need to judge everyone on their merits but there is usually a co-relation between the size of the demand and how little help they will be.

If someone is offering something you’d value then try and formalize that commitment as much as possible. It is easier to agree expectations before completing an investment and guards against two parties having a different view of what has been promised.

Are you seeking investment? Forterun.com is working with several investment partners that would like to talk with you and know where you are with regards fund raising for your business. To find out more send an email to info@forterun.com or call Omo on +234 903 915 1191.

This article was first published here