Startup funding sources in Africa:

: What do common terms mean?
: How much is available?
: Where can you go?

A thread to help first-time founders kick off their fundraising plans.

(Plus some things "we all" know that aren't always obvious.)

-- Bootstrapping --

: Growing your startup without outside capital by using a combination of savings & reinvested revenues.

Your pace of growth is limited vs. funded startups but you own ~100% of your company.

: Depends on your savings/income.
: Your bank account.

-- Friends & Family --

: Raising capital from people close to you.

Generally equity, but if debt, F&F is non-dilutive. Some founders use it to build prototypes/MVPs/traction before taking outside on capital.

: Depends. Who's in your circle?
: Basically everyone you know.

-- Angels & Syndicates --

: HNIs investing in startups for equity (sometimes as groups).

Some angels bring expertise & networks, but not all. Follow-on capacity is limited.

: ~$5-10K+
: HoAq, LAN, Victoria Angels, Dazzle Angels...

-- Grants --

: "Equity-free", usually deployed for impact. Can be linked to competitions/conditions.

Great for bootstrapping products that aren't immediately monetisable. VCs can view grant-funded startups with scepticism.

: ~$5-250K+
: TEF, Google Black Founders Fund...

-- Crowdfunding platforms --

: Platforms aggregating small checks from many people for fundraising campaigns (e.g. a product launch).

Types differ, e.g. debt vs. equity. There aren't many. Outcomes vary (liquidity is critical).

: Varies.
: Thundafund, Thrive Agric...

-- Accelerators --

: Cohort-based programs offering capital in exchange for equity.

Some take large stakes which can be too dilutive. Not all accelerators are equal -- value propositions vary significantly.

: ~$50-100K+
: YC, Techstars, ODX, Antler, Catalyst Fund...

-- Venture Studios --

: Building startups by matching founders with ideas and incubating their early growth.

Great for support. Founders tend to own less vs. accelerator- or VC-backed startups. Sometimes, they can be replaced.

: ~$100K+
: Founders Factory, CeedCap...

-- VC funds --

: Investing in startups at different stages (pre-seed to series C~)

VCs focus by stage, sector, geography etc. Some can push founders hard for aggressive growth.

: ~$50K-$20M (depends on stage)
: FirstCheck Africa, Ventures Platform, Ingressive, Partech...

-- PE funds --

: Investing in late-stage startups with stable cash flows, or in traditional SMEs.

Some PEs are starting to look earlier, but experience & fit are critical.

: ~$1M-$100M (depends on stage)
: Aruwa Capital, Verod Capital, African Capital Alliance, Helios...

-- Impact funds --

: Similar to PE/VC, but investing with social impact objectives.

Investing in double/triple bottom line companies, social impact ventures, etc., for lower target returns than PE/VC.

: ~$50K-$5M (depends on stage)
: Acumen Fund, Accion Venture Lab...

-- Bank debt --

: Lending from a bank/FI, usually requiring collateral (assets/cash).

Bank loans are hard for startups to get, given uncertain outcomes. There are sometimes concessionary (or government) programs but they take time.

: Varies.
: Stanbic, NedBank, BOI...

-- SME loans --

: Non-bank FIs extending uncollateralised, cashflow-based loans on short-term bases (~30 days).

Higher interest (vs. banks), but easier & faster to close (hours/days). You do need to show account inflows/outflows.

: Varies.
: Carbon, PayHippo, Grofin...

-- Receivables financing --

: Debt, but tied to an invoice. Lenders will cap their loan to the invoice's discounted value.

Typically easier to close than bank debt but they usually need you to have a track record with the lender.

: Varies.
: Pivo Africa, Libra Circle...

There are other forms of capital (many/mostly non-dilutive -- meaning no equity is sold), but those are also not common in Africa, e.g. revenue-based financing.

I'm convinced there's a gap in the market there.

Details for another day.

Above all, DYOR & good luck!