3 Keys to Attract Finance for Your Agribusiness When You Join the GoGettaz Community

“You don’t get money because you are a business, you get money because you can articulate your track record,” says Lucy Maingi from Invest in Africa.

“You don’t get money because you are a business, you get money because you can articulate your track record,” says Lucy Maingi from Invest in Africa. As SME Financing and Engagement Manager she sees plenty of requests for funding.

“I really want to emphasize, the issue, most of the time, is really not the funding. There is a lot of funding around, but the preparedness of the entrepreneurs […] is what makes it appear like it’s hard to get funding,” she relates during her presentation on Finding the Right Finance in a Nourishing Africa First Thursdays webinar.

Outside of the GoGettaz Agripreneur Prize Competition, many young agripreneurs contact the team at Generation Africa to find out if we sponsor businesses. That is exactly why Generation Africa created the GoGettaz Community. So, we encourage them to join the GoGettaz Community because you get access to mentors and investors.

Entrepreneurial Communities like GoGettaz and Nourishing Africa can help to link you with financiers and investors, but to actually get finance you have to put in the work to impress them.

What investors want to see

If you give money to an agribusiness with a solid business model and hardworking people, and then that business fails, it is part of the risk of investment.

BUT, if you give money to three strangers who cannot tell you what they are doing with it, and who don’t know anything about business, you are wasting your money.

Before taking the risk to put money into a business, investors want to be convinced that the risk is worth it.

According to Lucy, investors and financiers want to know that you and your team have a solid track record. They want to know what you are going to use the money for. You will need to prove that you have the cashflow to give them a return on their investment. In addition you may have to list assets that you can offer as security if things go wrong.

From her experience in investments, Lucy believes there are three key points to attract finance for your agribusiness.

1. Prepare Adequately

“People have good business ideas. You have a good vision, but you really don’t prepare. You don’t put your documentation together [to show] that bigger vision of where you want to be in a year’s time, or even in a month’s time, as soon as you receive the money,” says Lucy.

Getting money without proving your worth, is like giving a scalpel to a toddler because they said they watched an episode of Grey’s Anatomy with the babysitter. It is not going to happen because someone is going to get hurt. 

If you think you deserve funding, then prove it. Show “clarity and consistency of objectives between your finance, operational teams, and advisers. Have your documents together and ready, to show the investors your commitment.”

2. Develop a compelling equity story

“Package your story,” says Lucy. “

Tell your investors where your business idea came from. What inspired you to turn it into a business? And why should the investors care about it as well?

Lucy asks, “what is that competitive factor that makes you stand out from any other business, that will persuade any investor to inject money into your business?”

“The equity story needs to be carefully thought through, clearly articulating the information provided to the investor, and supported by a robust set of numbers, on why you want the funding,” she continues.

The Business Model Canvas is a great tool to help you structure a story to help attract finance for your agribusiness.

3. Limit Surprises

“Limit surprises by being prepared. Maintain consistency and predictability of financial performance during the fund-raising process,” is her advice.

For many investors, too many surprises are an indication that a business owner is not prepared or does not understand the industry they are in.

Surprises increase the perceived risk. It makes investors nervous because it looks like you don’t have control of the situation.

By preparing adequately, building a compelling equity story, and limiting surprises you will be doing more that most to attract finance for your agribusiness.

Lucy says, “It doesn’t matter what form of funding you are looking for, at the end of the day, if you just do these three key things, you’ll be able to attract the financing you need.”

Check out the rest of Lucy’s presentation on YouTube to learn more about key funding sources available to African agripreneurs.

There are many ways to finance your agribusiness. However, unless you use your own money, you will always need to tell your story and present your business plan. Similarly, you will always have to support your ideas with a solid set of documents and research.

Are you prepared?

Join the GoGettaz Community for access to free start-up training, mentors and investors.

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