Table of Contents
1. Lorna Rutto (Kenya)
Left her job as a bank employee in 2010 to launch a garbage recycling company.
Her business, EcoPost, takes waste plastic and recycles it into fence posts that are aesthetically pleasing, long-lasting, and ecologically benign in place of wood.
But without the money from NGOs and local and international investors, her company would not have been able to run.
Numerous national and local organisations assist companies that work to solve problems including environmental pollution, illiteracy, sickness, and other social difficulties every year. Typically, they provide loans, equity, grants, gifts, or even training and counselling.
The issue is that many African business owners are unaware of these financial sources, so they don’t apply.
As a result, Lorna sought and was given a $6,000 SEED Award in 2010, which she used as startup money for her company. She also received a grant of $12,700 from the Enablis Energy Globe-Safaricom Foundation the same year.
She also won the Cartier Women’s Initiative’s business plan competition, taking home a prize worth over $12,000 in the process.
Her company just received a $495k equity investment from the Blue Haven Initiative and the Opus Foundation. This was used to grow the company and buy cutting-edge recycling equipment.
In the free course at the bottom of this post, I explain why these organisations are willing to promote firms in underdeveloped countries by disbursing millions of dollars each year in grants, contributions, loans, and stock.
- Jason Njoku (Nigeria)
However, the struggle at the beginning of this company was not as glamorous.
Jason moved to Nigeria in 2010 to forge connections with local film makers and buy content rights for his new firm, IrokoTV, after previous ventures in the UK ended in failure.
Money was limited, and without Sebastian, Jason’s buddy and business partner, £90,000 would not have been able to launch this company.
IrokoTV has grown remarkably since that time. So far, overseas investors, most of whom are venture capitalists, have given the company up to $40 million in investments.
Investment AB Kinnevik, a Swedish venture capital firm, and Tiger Global, a private equity firm based in New York, are two of its backers.
Every year, venture capital firms invest more than $140 billion in start-ups and expanding companies all around the globe. But venture capital is just now becoming more active in Africa, where investors want to help businesses that can grow quickly and make a lot of money.
IrokoTV secured an extra $19 million in financing in January 2016 to expand its operations in Francophone nations in Africa.
By combining commercial relationships and venture capital, Jason has been successful in raising substantial sums of money to expand a firm that Forbes Magazine called “the Netflix of Africa.”
In the free course, I go into further detail about business alliances and venture capital.
- Anna Phosa (South Africa)
One of Africa’s most prosperous pig breeders is Anna Phosa. She is often described as a “celebrity pig farmer.”
She had to find money to launch and expand the firm, so her entrepreneurial path wasn’t all sunshine and roses.
With $100 from her own funds, Anna launched her first pig farm in Soweto in 2004. She had only four baby pigs when she began.
After four years, in 2008, the South African grocery giant Pick ‘n Pay hired her to provide 10 pigs each week to its shops. This was a big change, and the demand for pigs quickly grew to 20 a week.
By 2010, she had agreed to a significant contract with Pick ‘n Pay for the delivery of 100 pigs (per week) for the next five years in exchange for R25 million, or around $1. 9 million (in August 2017 terms).
With a contract in hand, Anna was able to get funding from USAID and ABSA Bank to purchase a 350-hectare farm. Her farm employs roughly 20 people and can house 4,000 piglets at once.
The majority of would-be company owners who approach banks for financing often leave dissatisfied. And the reason behind this is that banks often concentrate on expanding and established companies with strong cash flows and loan-secured assets. You could be wasting your time trying to get a bank loan if you don’t have any of these.
Many business owners are unaware that there are 15 distinct ways to get cash, with banks being only one of them. The issue is that too many ineligible companies contact banks for loans.
I’ll go through each of these 15 additional financing possibilities in the free course, along with the crucial requirements you must satisfy before even considering contacting the banks for a loan.
4.Ali El-Shafei (Egypt)
Dr. Aly El-Shafei is a mechanical engineer and professor who attended MIT. He is well-known right now for his patent, SEMAJIB, which is a magnetic smart bearing that can be used in many ways to make energy.
Dr. El-Shafei received the $100,000 main prize for the Innovation Prize for Africa in 2017. He plans to keep working on his idea and use the prize money to make an industrial prototype.
He had received $240,000 from the 2009 Research, Development, and Innovation Program of the European Union prior to receiving this honor. In 2013, the Science and Technology Development Fund of Egypt gave him a prize of $100,000.
Numerous local, regional, and international tournaments are held all around the globe each year. The prizes in these tournaments range from a few thousand dollars to millions of dollars.
However, contests provide advantages that go beyond just winning. Even if you lose, the exposure, experience, and feedback may have a significant positive impact on your company.
In the free course, I present a comprehensive list of business plan contests and initiatives that you may start aiming for financing.
- OMG Digital (Ghana)
OMG Ghana was founded in 2012 by Dominic Mensah, Prince Boakye Boampong, and Jesse Arhin Ghansah while they were still in college. When Jesse and his friends first started using smartphones, it was difficult for them to locate engaging content online.
So they made the decision to found a media firm that produces content for other young, tech-savvy Africans much like them.
The company’s reputation and clientele have now expanded beyond Ghana to Nigeria and Kenya. Furthermore, sites are about to go up for South Africa, Uganda, Zambia, and Tanzania.
One of the most prominent accelerator programmes in the world, Y Combinator, accepted the trio of entrepreneurs. In June 2017, they also got $1.1 million from a group of venture capital firms and angel investors.
Angel investors are often wealthy individuals or professional investors who make early-stage investment decisions. These are people who put their own money into a new business in the hopes of getting a high return on their money.
Without angel investors, some of the most successful firms in the world today, including Microsoft, Google, and Facebook, may never have existed.
In the free course, I go into greater detail regarding venture capitalists, accelerator programmes, and angel investors. These are alternate sources of funding that many African business owners just don’t investigate.
6. Aliko Dangote (Nigeria)
Aliko Dangote, the wealthiest man in Africa, is an inspiration to businesspeople around the continent. As of mid-August 2017, his net worth was $12.3 billion.
Although Dangote’s commercial activities are today spread across Africa, he started off with very little money.
He launched his company in 1978 with a loan from his grandfather of 500,000 Naira. In modern dollars, it is around $1,400.
As business owners, one error we often make is to ignore and take for granted the available sources of money that are close at hand. Friends, family, coworkers, neighbours, and other members of our social network may be valuable sources of cash, particularly in the beginning phases of a firm.
The success of the firm also allowed Dangote to repay his grandfather’s debt in around six months.
Early on, Dangote concentrated on bringing soft goods into Nigeria, such as rice, frozen fish, sugar, and baby food. Now, his business holdings include locally made cement, salt, wheat, and, most recently, refined petroleum.
Because of his history of success over the years, banks, individual investors, and institutional investors are now eager to participate in Dangote’s enterprises. It would have been difficult for him to get start-up financing from any of these sources in the beginning, if not impossible.
Keep in mind that in the early stages of your company, only those who are familiar with, trust, and like you will be willing to take a risk on you.
I’ll show you some of the advantages and disadvantages of getting funding from friends and family in the free course, but it’s still a fantastic choice.