Entrepreneurship Funding

“The best position to be in when ‘fund raising’ for your business is to have good product-market fit”.

The lifeblood of every company is capital; consequently, the greatest challenge for an entrepreneur is funding. From statics provided by Inc magazine, 3.8% of funding are Government grants, 6.5% represents Venture capitalists, 7.5% are Close friends, 7.7% Angel investors, 11.9% Business acquaintances, Family represents 20.9, Credit card 34.0%, bank loan being the second highest with a 51.8% and the most used source of funds by entrepreneurs are from personal savings with 67.2%. Only 13.6% have not used finance.

Adding to the statistics, one of our keynote speakers Seun Toye Kayode, vice president, head of Launch with GS at Goldman Sachs EMEA, says, “women are the most underfunded or as she would prefer to put it ‘overlooked’. Only 2% of funding goes to women. During the pandemic’s lockdown, it went to zero” as most investors doubled down to businesses they were already familiar with.

 Seun gave key points on leveraging and positioning yourself when sourcing funds for your busines with the challenges facing entrepreneurs. She opined that as an entrepreneur, you should;

  1. Spend time to do the technical analysis of the kinds of funding available out there for you and match that with the stage of your business and how you want your business to grow. She says picking a funding partner is not just about the fact that they have the money to invest in your business but rather about the fit. In other words, you need to consider whether the funding partner is fit for your business. For example, Is the funding partner a seed stage, pre-seed stage or venture stage investor.
  1. Determine from the onset what you want to achieve from the business. Do you want to become a public company where you can build an Initial Public Offer (IPO), and people can buy into your company? Or do you want to merge with a bigger company? Or you are just concerned about building a company that will create jobs for your community? You must be very clear on the kind of company you want to build as that will determine the type of finance appropriate for the business.


  1. Spend time in building your product and ensure you have a good product-market fitYou need to ask yourself questions like;
  • What is my product? 
  • Who is my product aimed at?  
  • How am I different from competitors?
  • How do I build my initial customers to validate that I need to signal to the market that what I am trying to build is working?

She advises founders to ask for feedback on what they are building initially rather than ask for the fund. She says the more feedback you get, the more you create that ‘product-market fit and the more customers you get, the better you position yourself to do the funding right. The best position to be in when you are fundraising is to have a good product-market fit. Focus on ensuring that whatever product you are selling or building has a place in the market and people find it convincing before having conversations around having investors.

  1. Build the relationship early. Start engaging investors at the seed stage. Take advantage of programs like Rise and Lead that will give you access to communities that you may not have been able to access on your own.


  1. Allocate and manage your time effectively. You should ask yourself:
  • How much time am I spending on potential investors?
  • How much time am I spending on near term investors?
  • How much time am I spending on building my team to ensure product-market fit?
  • How much time am I spending gaining customers, marketing and all things that drive revenue? 

She reiterates that you should know time is scarce from the start, and your time allocation will determine your ability to build your business. 

  1. Don’t be afraid to ask for what you want. Seun is convinced entrepreneurs should not approach investors when they are low in cash and desperate to inject capital into their business to leverage the confidence to ask for what you want. She says this desperation makes entrepreneurs lose their negotiating power. She instead advises that founders should source for capital 6months-1year before they need it to have enough runway. The worst position to be in is when your negotiating power is reduced; you will be forced to accept less than ideal terms.
  1. Have several groups of investors or a high network of individuals that you can call on at different times to keep the business afloat whilst you are fundraising.
  2. Be authentic, especially for female entrepreneurs. She admits that it is difficult for women to raise capital in the venture ecosystem, but it can be an advantage. So it is better to stay true to who you are.

In her final discussion, Seun opines that as an entrepreneur, you have to start with the idea that you have a passion for. An idea that solves a problem, an idea you are certain people, will need; then you can build a product that will fit into the market. If you have this in place, she is sure you are in a perfect position of attracting an investor.

Seun Toye Kayode’s speech on Entrepreneurship Funding was part of the discussion at the 2021 edition of the Rise and Lead Summit and can be viewed here. To enjoy more conversation from Rise and Lead Summit 2021, kindly subscribe to our YouTube channel.

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