Empowering startups is a game changer
A START-UP is started by individual founders or entrepreneurs in search of a repeatable and scalable business model.
More specifically, a startup is a newly emerged business venture that aims to develop a viable business model to meet a marketplace need or problem. Founders design startups to effectively develop and validate a scalable business model. Hence, the concepts of startups and entrepreneurship are similar. However, entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow big or become registered, while startups refer to new businesses that intend to grow beyond the sole founder, have employees, and intend to grow large. Startups face high uncertainty and do have high rates of failure, but the minority that go on to be successful companies have potential to become large and influential.
Africa needs to spearhead and empower startups to solve problems on our continent.
Investors usually don’t buy ideas before execution of the plan. A startup is the living embodiment of a founder’s dream. It represents the journey from concept to reality. It is one of the few times when you can take something that is only a dream and make it a reality, not just for yourself, but for the entire world.
Compared to other types of more traditional companies, startups also represent a big change in terms of the economic component linked to the creation of a new company.
Given that their initial development costs are much more modest than the ones traditional businesses require, funding needs are also lower. Although these companies attract a broader variety of investors, these are some of the typical players that startups tap into to fund their projects:
FFF (Family, friends and fools). Although some don’t see them as actual investors, they play a key role in the earliest stages of a company.
These are people that are close to the entrepreneur, that contribute with a limited amount of capital at the beginning when the idea is not developed enough to convince anybody else to invest.
Business angels; These angels are people that decide to back the project and invest their own money to get involved in a new business. With capital contributions that rarely exceed $60 000, these investors usually become involved in the project at other levels, contributing through their experience, connections or customers.