This post will reveal some of the best venture capital firms in Nigeria you can leverage for your small business.
As an entrepreneur, one of the most difficult things to get is money to fund your startup. There are creative ideas that can’t be done because there is no capital. Are you intending to start your own startup but are unable to due to funding? then this post is for you. In this article, I am going to list 10 venture capital firms in Nigeria.
What is Venture Capital?
Venture capital is a firm with the sole aim of investing in growing startups with the aim of getting profits. A lot of people mistake venture capital for startup loans. A startup loan is the fund borrowed to fund your startup, the people who give out this loan are not investing in your startup because you are going to provide collateral while collecting the loan, unlike venture capital.
Venture Capital is suitable for budding startups with the capacity to become big in a few years to come.
These are startups with proper management and team and a good strategy.
Venture capitalist gives out money to businesses for different purpose which includes advertisement, developing a product, scaling growth and a whole lot others.
Each venture capitalists have a different policy so you have to be cautious with who you pitch out your idea, and make sure their policy aligns with your startup so that you wouldn’t be at the receiving end at the end of the day.
Pros And Cons Of Venture Capitals
Entrepreneurs are risk-takers and I’m sure you must have known by now that almost everything in business comes with a policy that may go south.
Below are the things to expect when looking for venture capital while starting your business.
Below are some good advantages of venture capitals
1. Startup founders have access to funds that would be enough to get their products to the right audience. Venture capital firms have the capability of giving out funds that can’t be gotten as loans or from a family member.
2. Venture capital firms are experienced and would do anything possible to make sure that your startup grows. They may be involved in pitching out ideas for the growth of your product.
3. Venture capital won’t be on your neck demanding their money because funds are not given out based on interest, unlike loans. This will give you more liberty to diversify and increases the chances for the growth of your startup.
Below are the challenging disadvantages of venture capital firms in Nigeria
1. After your company grows, you’ll have to give out managerial positions to the investors which means that you will have little control over some activities in your company.
2. Venture capitalists are shareholders of your company which means that you are not the sole proprietor of your startup and they may want to meddle in the decision-making of your company.
3. Every plan or strategy you have for your startup must go through the approval of your investors and this may hinder your company from exploring newer opportunities as they may see your plan as unproductive.
Now, those are the pros and cons of looking for funding from venture capital after going through it, if you feel you can go with venture capital then give it a try because your business will definitely need a lot of money to thrive especially if you are in a competitive industry like FinTech.
Top 10 Venture Capital Firms in Nigeria
If you are looking forward to patronizing the services of venture capital companies, below are some of the venture capital firms for startups in Africa.
1. Future Africa
Future Africa is a firm with the aim of giving out funds and not only money but also mentorship to African startups.
It is Founded by Ibin Aboyeji, a Nigerian entrepreneur who is interested in investing in innovative ideas of young Africans who are willing to “Turn Africa’s most challenges into global business opportunities”.
Some of the popular startups in Nigeria funded by Future Africa are; evolve credit, Eden, Bamboo, flutter wave, 54gene, Andela, Chaka, rise and a whole lot of others.
2. Venture Platforms
Just like the name implies, Venture Platforms is a capitalist firm that gives out funding to startups in different sectors, especially at the early stage of the company. Over the years Ventue platforms have invested in over 30 African startups and are still focused on doing more.
Furthermore, They give out funds mainly to startups in these sectors,
- Enterprise SaaS
- Financial services
- Edtech and digital talent
- Digital infrastructure plays
3. SPARK Capitals
Founded by Jason Njoku, the owner of Iroko TV. SPARK Capitals give out funds to startups with lucrative business models. They also give out funds to growing startups that have shown the likeliness to become a big names in the industry.
They have funded startups that have shown obvious growth in a few years, they are a part of the success of startups like Medsaf, Hotels NG, OgaVenue, PayStack and a lot more.
Founded in 2014, GreenTee Investment company has shown that it is possible for them to take a startup from zero to hero. Apart from the funding, GreenTee gives out strategies and legal advice to growing startups.
GreenTee has a vision statement of giving startups the opportunity to have “a bulletproof corporate governance framework”.
Lastly, they have invested in notable startups like PayStack, Big Cabal Media, Precurio and more.
5. EchoVC Partners
EchoVC Partners is a venture capital firm that invests solely in startups in the technology sector. They are focused on funding growing technology companies with profitable business models in Sub-Saharan Africa and North America.
If you are into the tech industry then pitching your idea to EchoVC Partners should be your priority because they are one of the biggest venture capitalists you could come across this is because the firm isn’t owned by one company but by different companies merged into becoming one firm.
They have invested in startups like Hotels NG, MyPadi, Cars45, LifeBank, Printivo and a whole lot of others.
6. LeadPath Nigeria
Lead Path is a venture capital firm that gives out short-term and long-term funding to startups in Nigeria.
They are mainly focused on investing in tech startups such as FinTech, software development, web development and mobile technology.
They can also pitch out ideas and strategies to startups, LeadPath Nigeria also gives out mentorship training to budding Nigerian entrepreneurs on how to run a startup.
Lead Path Nigeria fund ranges from $25,000 to $100,000 and goes as high as $1,000,000 for following funding which is basically for long-term investments.
7. SLA Accelerator
SLA Accelerator is a firm founded by She Leads Africa, it is one of the biggest venture capital firms as they have over 400,000 members both in Africa and across the globe.
She Leads Africa offers to fund only female entrepreneurs, they are focused on empowering creative young African women. Before getting funding from SLA Accelerator, you’ll have to through a 3 months programme.
During the course of the programme, if your business model seems lucrative, they’ll invest in your startup.
SLA Accelerator has been featured on CNN, Black Enterprise, CNBC Africa and Fox Business.
8. FirstCheck Africa
FirstCheck Africa operates just like SLA Accelerator, they offer to fund female entrepreneurs who are interested in putting Africa on the global map. It was founded by Eloho Omame and Odunayo Oweniyi.
They are interested in raising capital for women in the tech industry. FirstCheck Africa invests as high as $25,000 in African Startups owned by females and also helps in strategizing and mentoring the team for 12 months.
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The MicroTraction venture capital is not an African-based venture capital firm but recently started funding African startups. MicroTraction has a track record of funding businesses into $Bn worth of value.
They have funded startups like CowryWise, Wallet.ng, AllPro, BuyCoins and Thank-U-Cash.
10. TLCom Capital
TLcom Capital is a leading Venture capital firm i Nigeria partnering with entrepreneurs of African descent and enabling them to tackle the continent’s biggest challenges.
Tracing at the time it was launched, the VC firm has focused on supporting innovative entrepreneurs who leverage technology to create viable solutions and address significant solutions.
The firm is investing from its tide Africa Fund which invests in the early growth stages. The investment ranges between $500K and $10M in building tech-enabled businesses.
Conclusively, with over two decades of investing, the VC firm has supported entrepreneurs in Europe, the USA, and Africa.
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Conclusion: Venture Capital Firms for Startups in Nigeria
If you have a small business idea but lack funds, leveraging these venture capital firms might be a good way to help boost your business structure.
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