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.

This guide is a high-level overview of what a start-up needs to think about as they begin preparing for fundraising: the general processes involved, the documents they need to have, what types of investors are out there and the instruments they use when funding companies. We include insights gathered from investors, entrepreneurs and others in the start-up ecosystem, so start-up founders can learn from the people who have successfully raised money in the past and who are looking to fund companies today.

Every company’s fundraising process is different, and the stage at which the start-up approaches investors will also be different. But, by distilling some of the most salient points from our conversations, we hope this guide will serve as a good starting point for entrepreneurs on how to fundraise.

Furthermore, by providing a directory of potential funders and detailed information about them, we hope that entrepreneurs will have a better understanding of the different types of funders in this market, their average investment size and the sectors they are active in. While this is not an exhaustive list, it does highlight some of the key players in the market and shows the sort of information entrepreneurs need to know before they approach investors for funding.

Key Takeaways

  1. Entrepreneurs should do research on the investors they approach: they should find someone who is a truly good fit.

  2. When approaching investors, introductions are best: entrepreneurs should try to meet investors at a pitch event, a conference or through one of their portfolio companies.

  3. Enter accelerator/incubator programmes: while they may not be a great tool for every entrepreneur, they will help them to gain exposure and learn how to think about their business.

  4. Know the market: entrepreneurs should be able to explain not only the intricacies of their market but also the challenges they foresee, the offline aspects of their business and be able to back up their assertions with facts.

  5. Know how much to raise, and why: entrepreneurs should not ask for a million dollars just because it is a round number; they should do their research and explain how this round of funding will get them to their next key milestone, and where they will go from there.

  6. Do not raise too much money too quickly: if founders cannot keep raising their company’s valuation in future rounds, they will likely sputter and burn out.

  7. Local versus international investors: there has been an uptick in interest among international investors in Namibia – entrepreneurs should find out how they are different and if they are a better fit.

  8. Consider impact investors: this may be a good fit with a company, or it may not; before they approach impact investors, entrepreneurs should consider carefully whether they have the capacity to report the metrics these types of investors will want to see.

  9. Promote trust: investors are wary of entrepreneurs who are not serious about their companies; entrepreneurs should find several credible references (professors, mentors, employers) who will vouch for them if a potential investor calls.