Finance is the major obstacle between most African startups and their dream. As an entrepreneur, I understand that finance or the lack of it can be a major stressor in business.
When desperation kicks in, the only goal most times is to pin down an investor and then scurry off to dump their precious seed capital into your business. True, monetary capital is the lifeblood of any business but that’s only half the story.
When engaging with investors, acquiring funds is not where the relationship ends. Make no mistake, funding is important. It’s okay and even admirable to woo an investor with your dramatic vision-casting and credibility. But their money is not the only prize to gun for.
For all I know, investors, smart investors bring more to the table than money. They also possess impeccable business acumen, non-monetary resources and access to the right platforms and networks that money cannot earn you.
So, what happens when an investor declines to put money in your business? Do you walk away, jam the door and look for the next prospect? Or do you turn your attention to the person instead?
As an entrepreneur, you must be disciplined enough to look beyond the money. I mean, money is the only thing they denied your business. They could be kind to offer you guidance? They could be willing to refer you to a network, platform or opportunity? And who says investors can’t change their minds or support your next venture?
Therefore, keeping relationships is a primary skill every African entrepreneur must master. Here are 3 tips to help you get started.
- Let your expectations be clear from the start: Entrepreneur-investor relationships thrive on clarity and trust. Both parties must be clear on the vision, obligations, rewards, scale and of course, possible exit plans. Clear expectations will minimise disappointments much later.
- Look Beyond the Money: It is difficult to move the conversation further when it’s clear an investor won’t support your startup, moneywise. This is because the conversation largely centred around monetary investment. For a potential investor who is also learned in your area of business, you can discuss other forms of investment.
This is why startup entrepreneurs must seek investors based on other benefits asides from funding. Some investors could serve as priceless mentors. Their sheer scope of experience and connections could be worth more than money to the business.
- Communicate: This involves open dialogue where both parties are not only talking but also listening to each other.
Communicate your confidence and passion in your idea. Let your investor(s) know about your informed concerns. Listen for theirs too. Go out of your way to allay their fears. Beyond your business, investors are also investing in you as a person. When you see it this way, you will be more intentional with the relationship.
In conclusion, entrepreneur-investor relationships will face rocky moments. The anchor in these times will be trust between both parties and mutual belief in the vision.