Start-ups, in general, are difficult to grow. There are a lot of start-ups that started well but crumpled along the line due to various reasons. The high rate of failure that comes with it makes it difficult to understand but the few that have gotten through the start-up stage have made tremendous impact on society with what they have brought on board. One would hardly hear a story of an entrepreneur about how easy he or she got it when they started their businesses. They mostly talk about how difficult it was to pull up and the challenges they came across day in, day out.
If you live in Africa and still haven’t heard about Ecobank then you just might be living under a rock.(sorry…) With over a 1000 branches in 33 different African countries, Ecobank is making impressive strides in the African Banking terrain. Ecobank understands one truth – go digital or die. In order not to die, Ecobank began implementing a bank-wide initiative to Go Digital. Beyond doing that, Ecobank wants to power fintech startups in Africa. In essence, the cake is so large, they want to share it! They began this by launching the Ecobank Fintech Challenge in 2017.
Africa is on fire! A raging fire of tech startups that have a unified vision to disrupt the whole of Africa and beyond. This makes the startup landscape in Africa vibrant, exciting and aggressive. Consequently, there is a bit of overcrowding in the African Tech startup sphere with a large number of these startups vying for funds from Venture Capitalists and investors.
It’s a fierce race to grab the most money to fuel your disruptive idea. There are however some basic ideas Venture Capitalists or any investor will look out for before finally sinking their funds into your idea or startup.
Here are three mistakes African start-ups make that are preventing them from receiving funds.
Insufficient Transferable Knowledge
Entrepreneurs mainly thrive on the implementation of their ideas. However, there is a problem when the idea being implemented is one the said entrepreneur has almost no knowledge about.
For instance, an investor or venture capitalist wouldn’t readily invest in a company whose founder has absolutely no transferable experience in the sector he is pitching his idea in. That founder’s learning curve would be significant and might be plagued with many mistakes.
Resistance to Change
It’s natural to have an attachment to your business strategy and model because it obviously belongs to you. However, that shouldn’t cloud your judgement or how receptive you are to guidance. Any investor will come in with a mindset to somewhat coach and give you a different perspective on how to run your business to accelerate growth and success.
Every investor will ask themselves these questions about an entrepreneur before investing in any African Tech Startup.
- Are you able to listen to feedback without becoming defensive?
- Do you brag or inform?
- Are you inflexible or open-minded?
- Will you be difficult to work with or mentor?
Till you check all or most of the boxes, you are not winning anything from them.
No Unique Offering
If your idea isn’t unique then there’s a lower chance of getting investments. Usually, startups that have an idea which several other companies are attempting to implement get a thumbs down from investors. This is because it is usually too late to invest because the ‘early mover’ advantage is lost.
Establishing your startup’s place in the overcrowded tech industry can feel like finding a needle in a haystack. Of course, this is an exciting time for entrepreneurs itching to jump into a thriving industry, but diving in too quickly can easily detour even the most confident founder. Instead, prepare for the inevitable bumps in the road, and embrace the learning curve.
Source: The Next Web