Seed Capital & Start-up Business Management
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Why Do You Need Seed Capital or Seed money to start a business? And that is why you should take care of the seed capital in your business. Here are sources of seed capital, seed funders, angel investors and seed loan. They are various types of seed money for small business.
Although, you may think your business has a unique set of offerings or services to provide the market, investing in a start-up is still considered to be risky. This is because, this first stage of capital introduced in the business is like an adventure funding. Incidentally, several business failure is attributed to the manner the seed capital was managed.
Seed Capital & Start-up Business Management
How to Avoid Business Failure:
This is our interest in this article. We had previously writing articles associated with this. Those on how to nurture & grow your business, tips to avoid business failure, and issues on venture capital. We suggest you click appropriate links to read these articles together. Our interest is to help our esteemed reader business men and women to avoid business failure.
Seed Capital & Start-up Business Management
Seed Capital Related Questions:
Once again, we wish to raise series of mind search questions on this subject matter to help you assess your standing now. Let these questions help you imagine your business state of affairs currently, then we discuss.
- What is Seed capital?
- How does seed capital work?
- What re the other names for seed capital?
- What is angel investor funding?
- How do you raise angel funding?
- How much is seed funding?
- What is a good return for an angel investor?
- Where do I get seed capital/angel funding in Nigeria?
- What is angel round funding?
- How much equity does an angel investor get?
- How long should seed funding last?
Business Start-up Funding Options:
There re various start-up funding options available to entrepreneurs while raising funding to start a business. These ranges from grants to crowdfunding. Another option is seed money. But what does this term mean? Where can entrepreneurs seek out this kind of funding? And what should entrepreneurs know about the current seed capital landscape in Nigeria?
Seed Capital & Start-up Business Management
What therefore is seed money?
Generally, seed capital is the initial business capital used to develop a business idea. It’s used to fund a new enterprise during its launch. Where things go on well, it helps to nurture the business to the point that it can be presented effectively to venture capital firms that have large amounts of money to invest. And if they like the idea, those firms generally get a stake in the new venture in return for investing in its development. It’s also at this point that the owners of the business may now wish to introduce more personal funds into the business.
Furthermore, if you understand that studies have proved that about 29 percent of start-ups fail due to running out of cash. As a matter of fact, once the start-up capital is not enough businesses struggle significantly to run the business. Now you know why seed money is critical to getting a new company up and running.
Seed Capital & Start-up Business Management
When entrepreneurs find individuals or firms that are willing to provide them with their desired sum of seed money, they reward them with an equity stake in return.
Seed Capital & Start-up Business Management
Where can I find seed money?
Good question! Here’s a look at a few places where seed capital may be provided for your start-up.
Close family and friends.
These are people in your life that know you the best with a topic as sensitive as financial investments. Again, there’s less risk that these individuals would charge you interest for their investment or call police for you if the business fails. Above all, they would want to support you and help bring your dreams to reality.
However, while approaching them for this, bring along your business plan to examine and allow them to ask questions. Give them confidence. It may be costly to ruin close relationships.
Seed Capital & Start-up Business Management – Seed venture capital firms.
Think of companies like GreenHouse Capital. Till date, GreenHouse Capital has made some investment in popular Nigeria start-ups like Flutterwave, Max.NG, Rensource, Riby, and TalentBase. Other seed venture capital firms include SPARK Capital, Growth Capital Fund, LeadPath Nigeria, GreenTree Investment Company etc. Remember, while dealing with this firms,you must be prepared to deliver a significantly larger equity stake than a single individual would require. Therefore, get set, polish your pitches, revise your business plan and consult a legal professional for advice before you begin reaching out to the appropriate firms within your given field.
Angel investors
Doctors, lawyers and existing entrepreneurs may act as angel investors to your business start-up. These class of professionals always have idle fund around them. So, they would like investing a portion of their existing wealth into your company. This particular type of investors also help to counsel and mentor you relying on their wealth of experience.
The factors associated with Seed Capital & Start-up Business Management have already been discussed in our previous articles. Click here to master how to nurture your business and avoid business failure. In these articles you will see how a good business plan, internal control system, business legal status, business regular effects, help you stay put in business by managing your seed capital well.
Seed Capital & Start-up Business Management
Make a personal decision here:
Get your business start-up timelines completed, registrations, business plan and regulatory licences from CFMC Limited. It’s your personal decision. But we know as Chartered Accountants, Auditors, Taxation and Management/business development consultants, we could do so much for you.
Contact us through +234 8034347851 or email to [email protected].
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Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
