In terms of seed funding, venture capitalists and angel investments in Nigeria that seemed to be raising in a short time, from a time when the prevailing complaint was that there were no real investments in the tech ecosystem.
While venture capitalists might not be the easiest people to work with, many of them contribute business knowledge garnered from previous experiences in a similar setup, and involve themselves with the management, especially because of their vested interest. VCs provide capital to early stage businesses where there is substantial project risk and perceived long-term growth potential.
The investment is made in equity rather than debt with expectation that at a later stage referred to as Exit; it could be sold for a significant profit. So here we are in the present, after moving from a period when it was difficult to raise funds in Nigeria, to the point now where different options are becoming available – both local and international. With the appearance of fund pools such as the Tony Elumelu Foundation (TEF), and the Lagos Angels Network on the local horizon, there is some hope at least that start-ups will have access to better seed funding than ever before. The TEF provides an initial seed funding of $5000 as grant to qualified start-ups to support their early-stage processes.
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