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How Do African Businesses Get Start Up Capital?

Guest post by: Benin Mwangi

Article Overview: Hi again, sorry again for the long pause. It seems to be occurring more than what I would like, but things have been moving at whirlwind pace recently. Anyway, this is a question for all of you entrepreneurs, business students, professors, and others in the know on the inner workings of start ups in Africa. How did you or someone that you know get start up funds?

How Do African Businesses Get Start Up Capital?

Hi again, sorry again for the long pause. It seems to be occurring more than what I would like, but things have been moving at whirlwind pace recently.

Anyway, this is a question for all of you entrepreneurs, business students, professors, and others in the know on the inner workings of start ups in Africa. How did you or someone that you know get start up funds?

My conjecture is that it would go something like this with the most common sources of funding starting at the top:

personal savings and property holdings
family and remittances
vendor finance
micro finance
other non profit initiatives
bank loans
venture capital
investment funds

Often times in my reading the biggest obstacle outside of weak infrastructure cited as a deterrent to entrepreneurs in Africa is the scarcity of start up capital, many of my acquaintances have echoed this sentiment. What I wonder is if there is a way that, with today’s technology, the start up capital reservoirs in Africa can be widened to the extent that a really good entrepreneur lacking personal funding or powerful connections can do more than just ask family and friends for start up capital (without necessarily having to fall under the umbrella of micro finance).

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Article Tags: acquaintances, bank loans, business students, conjecture, family and friends, inner workings, investment funds, micro finance, obstacle, personal savings, remittances, reservoirs, scarcity, sources of funding, start up capital, start ups, ups, vendor finance, venture capital investment, whirlwind pace



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