All over the world, entrepreneurship is increasingly being recognised as a key driver of job creation and economic growth. Successful entrepreneurs are celebrated as luminaries, and the entrepreneurial mantra of accepting and learning from failure is being adopted by organisations of all sizes. In other words, it is a great time to be an entrepreneur.
One of the first and most important decisions that entrepreneurs will need to make when raising money is deciding what type of capital they need. In this guide, we cover four types: grants, debt (loans), equity and mezzanine (a mix of debt and equity). One or a mix of these four types of funding will apply to most entrepreneurs in Namibia, as well as in other countries.
There are various types of investors that are active across Namibia. This section provides a brief overview of each type of funder, including typical funding amounts and the non-financial benefits that a start-up can expect from each type of funder.
The decision on when and how to raise capital differs for every entrepreneur. Some entrepreneurs will be able to bootstrap their start-up for years before needing to turn to an investor for additional growth capital; others will need to tap into the friends, family and fools in their circle, in order to get their idea off the ground.
Namibia is largely a semi-arid country with a long coastline on the South Atlantic, whose economy is mainly reliant on mineral extractive industries. The country’s natural mineral riches and a small population of about 2.5 million (2019) have made it an upper-middle-income country.
Raising money for a start-up is not easy. It will take enormous amounts of patience, determination and persistence. Nevertheless, it is also an extremely rewarding process that will teach the founder a lot about themselves, their business and their market.