Young Nigerians like myself have good business ideas but we are incapacitated by lack of resources to kick-start the business ideas and set the ball rolling. I was just wondering whether we have venture-capitalists in Nigeria that can invest in ideas and become a stakeholder or be paid back their investment after certain years. Your suggestions and replies will be appreciated.

venture capitalilists in a country where nothing is documented properly? even documented things can not be trusted. i mean a corruption-riddled society where you can not even call on the judiciary when things go haywire. are you kidding?

they will just disappear 'into' THIN air.

Nextzon Business Services is the company you need.

They have funded the establishment of over 50 companies in Lagos alone, and are quite networked with many donor and funding agencies, angel investors, corporate institutions and other venture capitalists.

Nextzon is at 33A Bishop Aboyade Cole Street, Victoria Island, Lagos. (www.nextzon.com/index.php)

You can reach me if you need further details on 08191154879.

Cheers.

Thanks Bigoozz for the NEXTZON suggestion. I'll give them a try but come to think of it, how's the "intellectual property" aspect taken care of by this company. I'm sure that was what Ola.Olabiyi was referring to when he said the judicial system is flawed,

i wish there were coz i aspire to be one soon
send in ideas & projections to info@bigleapsolutions.net

Thanks Olums,

Times are gone when the informed are cheated. I would recommend three solutions:

1. Get your idea protected by acquiring a patent or intellectual property right.
2. Ask the second party to sign a Non-disclosure agreement [/b]with you before you go ahead with giving them access to vital documents.
3. Do not expose your entire [b]business plan at once,rather, do a power point presentation, information memo, executive summary at the initiation of engagement discussions till the other party has shown some level of commitment. etc.

Every professional organisation knows the implications of stealing ideas from people who requested a non-disclosure agreement.

I wish you good luck.

Raising funds for serious business owners and enterprenurs has gotten easier over the years as several venture capital firms and private equity investment funds now operate in nigeria. several key businesses have raised funds through them.

check out a list and profiles and contact address of these firms free at www.africainvestor..com

hope you find these information useful.

very interesting thread and good inputs by all

Saw this thread and got interested. The only problem that i have come across is valuation when the investor is trying to exit the investment. When the client is presenting their business plan. their valuation (using dcf) just seems to be too optimistic, a not too experienced investor gets excited and then funds them thinking they will make a good irr. However, when you want to exit, the valuations do not hold water anymore. In most cases, you have to get a very good lawyer and probably a good audit firm to check the books CONSTANTLY. as most companies try to cook the books as much as possible.

Which industries are you trying to invest in? I am keen on the hospitality and consumer goods sectors. With a population of 150M+, you cannot go wrong with this.

Are you an angel investor, growth capital etc?? Alternatively, are you an entrepreneur looking for funds?

I am actively fundraising now, will have to formally register with CAC and hope to close on some investments early/mid next year.

Hope this helps.

this is a very good thread,
myself and a couple of people are working on a potentially big project in the consumer industry, and so far we have been running it on our own funds, i discussed with my guys on the need for an angel investor at this stage as our contributed capital is in the red, however we are all skeptical because any investor at this stage will prolly ask for an inordinately high equity stake. i guess its a give and take situation but how do we even ascess these investors? that has been our challenge and truth be told it has really slowed down our progress any suggestions will be highly appreciated.

@ Tolulop001

Are you currently based in Nigeria? Is your product already selling in the market? also what type of owenership structure do you and ur friends have?

I understand how fustrating it is to find willing investors, one thing that i would advice is to network, network and network, keep talking to pple and you would be suprised where the funds will come from. Just make sure you can show that you will be free cash flow positive (ebit -(1*tax rate)+depreciation &amort - capex-change in net working capital) and that will do the trick.

I have seen that angel investors are lacking in Nigeria and all the big boy vc/pe firms only do multi-million dollar deals, there might just be a good business potential here, wink, wink

Most investors look for abt 30% stake, this depends on how much they have invested in the company though.

@ bigben
thanks for the input,
its a partnership structure, we are still at the r and d stage, we are at the moment securing technical support for the venture. what we need now is seed stage investing, but we cant go all out telling people about the venture, you know one has to keep some things under wraps till some certain things are secure. like u rightly said, the big boy VC guys are into 7,8 digit stuff, which is not where we are(at least for now!)
another issue with VC is valuation, and i dont plan to let any Shylock get at all my hard work for peanuts!

Tolulop001, and any other person looking for funds,


Here are my candid advice:

After much exposure to deals looking for funding in Nigeria (bearing in mind that funds are here, but the custodians use and cycle them on personal selfish deals, from banks to government officials), I realized that you can source funds on your own if you would adhere to the following tips:

1. Have a really niche business idea
2. Be able to communicate it properly with a business plan (professionally done, well researched, all relevant information provided)
3. BE READY TO COMMIT YOUR OWN SWEAT MONEY ( no body takes you seriously as an investor if you don't)
4. Locate a few people around you that believe in your idea and can provide part of the fund (and include a "return on equity" analysis in your business plan to motivate them)
5. Make sure you ascertain the minimum required capital to execute the first milestone of the investment project (a professional can help a lot here especially in helping you locate strategic alliances, lean budgeting measures, shared facility and services options for maximised economy of scale etc)
6. Start small and reinvest as you look out for more investors (most investors are afraid of investing in start-ups, so this stage is more interesting to them)

Secondly, I know about an IFC $20,000,000 facility appropriated for only Nigerian SMEs at a ridiculously low interests rate, but this would require an incubation or hand-holding support of a professional service firm that can help you provide the required criteria for fund access eligibility.

I hope this helps,

Cheers.

@ Tolulop001

Wow, since you are in the R& stage then I say keep grinding and funding will come. what is the ballpark figure u need to get up and running in USD. Is the business based in Nigeria? Are you based in Nigeria too?

Honestly, as I said earlier, I am still fundraising and if I have any disposable cash could have asked for your biz plan for review. However, I will not hold you back, if by next year things go as planned for me and you still need capital we might have a deal if terms are right.

Also if you need any help with financial analysis, strategic & business plans, or just review of any documents, I am willing to help. I have been in M&A for abt five years now and have been basically raping financial statements all my career.

Just keep grinding, hang in there.

well now that ive thot about it, we are a bit beyond the r and d, just recently commenced negotiations with different participants necessary, technical partners et al. yes im based in Nigeria, and the biz is too. To get up and runnin, not a figure i'd like to state here
thanks, so far its just been our imput from our day jobs.
thank you for the input. in a month or so some issues will be clearer, ill be sure to holla. are u based in Nigeria?

Well what's your idea? How big is it? Apparently you are looking for funding from the start. Just know there's is no free lunch. Venture capitalists always want their pound of flesh read this http://www.inc.com/magazine/20100601/why-i-sold-zappos.html. You may be better off starting small or getting the money from friends/family.

Peace

@ Poster,

So long as you are in Nigeria, don't hope for venture capitalist cos there's none. It's just another word in the dictionary being thrown around. Even the business services being mentioned above will charge you some upfront money to review your project before they'll work with you.

You'll need to start small and build up a track record, that's when you'll start getting mention.

@Cvibe: thanks for the word. My major fear like I mentioned earlier is even the intellectual property aspect. I can't stand pitching my idea to a "supposed venture capitalist" who will show no interest only to turn his back and start working on the idea. I have a friend who shares this kind of painful experience and as it is, I can stand this happen. I read the "Zappos" experience with Bezos, so maybe I'll just try weathering the storm and stand tall against the odds.

what's the point of being a vc in naija, there is no innovation coming from naija universities.

@ Tolulop001 - I am currently based in the States. You can pm anytime you need to talk or need any advice - FREE of charge.

@ Other posters.

About the article, although I dint read it, u shld know that the finance world has a cut throat mentality, what most investors care about is that IRR because the have limited partners to answer to. Most VC firms try to make 20% return on investments annually - so any "legal tactic" might be deployed.

As per IP/copywrite/patent- you have to know what kind of VC firm is interested in you, what is their track record, mgt background and experience, what other companies have they invested in? Run away from investors who tell you that u are the first enterpreneur they want to invest in, DO YOUR DUE DILIGENCE, I can't stress that enough.

Its not about just getting raising money from family and friends, Legit VC firms bring in operational and industry experince to guide you along the way.

Having said all these, doing VC work in naija na another different story- you just need that one firm to be a pioneer in the industry - do things the right way - and that is what i want my firm to eventually be, it might take me 2, 5 or even 10 yrs, but the most important thing is doing it right.

**IMPORTANT** know your biz plans by heart, you never know when u will need to give an "elevator pitch".

@ Tolulop001 - I am currently based in the States. You can pm anytime you need to talk or need any advice - FREE of charge.

@ Other posters.

About the article, although I dint read it, u shld know that the finance world has a cut throat mentality, what most investors care about is that IRR because the have limited partners to answer to. Most VC firms try to make 20% return on investments annually - so any "legal tactic" might be deployed.

As per IP/copywrite/patent- you have to know what kind of VC firm is interested in you, what is their track record, mgt background and experience, what other companies have they invested in? Run away from investors who tell you that u are the first enterpreneur they want to invest in, DO YOUR DUE DILIGENCE, I can't stress that enough.

Its not about just getting raising money from family and friends, Legit VC firms bring in operational and industry experince to guide you along the way.

Having said all these, doing VC work in naija na another different story- you just need that one firm to be a pioneer in the industry - do things the right way - and that is what i want my firm to eventually be, it might take me 2, 5 or even 10 yrs, but the most important thing is doing it right.

**IMPORTANT** know your biz plans by heart, you never know when u will need to give an "elevator pitch".

pls dis cant work here

Ok for some reason, I have tried to post two detailed responses trying to give FREE advice to pple in need and it gets deleted. This is an example why VC can't work in Nigeria when we have non-progressive individuals!!!!

@ Tolulop001 - I am currently based in the States. You can pm anytime you need to talk or need any advice - FREE of charge.

@ Other posters.

About the article, although I dint read it, u shld know that the finance world has a cut throat mentality, what most investors care about is that IRR because the have limited partners to answer to. Most VC firms try to make 20% return on investments annually - so any "legal tactic" might be deployed.

As per IP/copywrite/patent- you have to know what kind of VC firm is interested in you, what is their track record, mgt background and experience, what other companies have they invested in? Run away from investors who tell you that u are the first enterpreneur they want to invest in, DO YOUR DUE DILIGENCE, I can't stress that enough.

Its not about just getting raising money from family and friends, Legit VC firms bring in operational and industry experince to guide you along the way.

Having said all these, doing VC work in naija na another different story- you just need that one firm to be a pioneer in the industry - do things the right way - and that is what i want my firm to eventually be, it might take me 2, 5 or even 10 yrs, but the most important thing is doing it right.

**IMPORTANT** know your biz plans by heart, you never know when u will need to give an "elevator pitch".

Hi poster, im willing to partner with you, if you want call me on 07086712681 for discussion

bigben431:

@ Tolulop001 - I am currently based in the States. You can pm anytime you need to talk or need any advice - FREE of charge.

@ Other posters.

About the article, although I dint read it, u shld know that the finance world has a cut throat mentality, what most investors care about is that IRR because the have limited partners to answer to. Most VC firms try to make 20% return on investments annually - so any "legal tactic" might be deployed.

As per IP/copywrite/patent- you have to know what kind of VC firm is interested in you, what is their track record, mgt background and experience, what other companies have they invested in? Run away from investors who tell you that u are the first enterpreneur they want to invest in, DO YOUR DUE DILIGENCE, I can't stress that enough.

Its not about just getting raising money from family and friends, Legit VC firms bring in operational and industry experince to guide you along the way.

Having said all these, doing VC work in naija na another different story- you just need that one firm to be a pioneer in the industry - do things the right way - and that is what i want my firm to eventually be, it might take me 2, 5 or even 10 yrs, but the most important thing is doing it right.

**IMPORTANT** know your biz plans by heart, you never know when u will need to give an "elevator pitch".

thanks.
*off topic* how does one PM on this site?

davidif:

what's the point of being a vc in naija, there is no innovation coming from naija universities.

You are assuming Universities are the only source of innovations or business ideas?

go fry dodo. u wan free money for naija. u neva serious. who know u and who u know. no be nairaland u go find them.
from experience i dey tell u.

work within your means and when you meet any so called venture capitalist don't even divulge any serious information to them. he! even the main idea/the big picture alone is enough for them to steal the job from you. if it work's out, watch your back and prepare a good mou because you might be killed for your share.

I have been looking for this kind of thread on Nairaland. The main reason why we don't have Venture Capitalists in Nigeria is that we don't really trust each other. The legal system in Nigeria is still fragile, and it is not easy to get your money back if an entrepreneur you're working with suddenly becomes dodgy. Then we don't have a solid data system in the country. How can you verify easily if someone is living where they claim to live? NIPOST which is supposed to manage our Postcode system is a sleeping giant and the Police lack the tools to go after defaulters. There are people who have invested in small businesses in the past but they got their hands burnt . I believe Nigerian Banks can really foster entrepreneurship in the country. The banks only need to be courageous and proactive in this regard. Graduates with solid business plans who can provide references from important people should get a look in from the banks. The banks do not have to invest millions in businesses. It could be as little as 50,000-500,000 Naira.

All the Banks will be doing is to monitor the businesses they've invested in and make sure the entrepreneurs open bank accounts with them. This will enable the financial advisors to know how the money is being spent and how much money from profits is being deposited in the accounts. However, we need to tackle the greed that runs in the system of most Nigerians first. Cheers.


www.vibes-extra..com

www.amebor.com

@POSTER: you are talking about intellectual property on the presumption that your idea is so hot it would be stolen.thats the problem with young people(you must be young i guess).You r so worried about the safety of your so called big idea you have completely lost track of the fact it could just get thrown out of the window without even a second consideration.If you are so worried about your copyright, get money and startup the idea yourself-simple.Forget all these gibberish they are telling you here about patenting.Havent banks gone to Ministry of Trade in abuja to get their own patent for a product already patented,backdating their own patent and quashing the already issued patent via ministerial caveat?Look you nid plenty of prayers and luck for you to even just a lookin from venture capital firms-and there are a handful in Nigeria-theres Actis-they funded The Palms, or shoprite if you like for $40million. There's Vectis somewhere in VI.They are a greek venture firm with $2billion to spend in Africa.theres Grofin,just about toset up shop in Abuja, theres capital alliance, theres fistfunds etc etc.But they wont give you money,cronysim is the other of the day.If you ever got to seat with any of their Md's, you'd rather beg they take up your project, chances are, you wont even get that far, and you are even talking about patent.If they dont run the figures, dont go thru ur P&L, cashflow etc, you dont even stand a chance, dats means you give them your excel worksheet,asides your bplan. you think you'll even have the guts to talk about an NDA or intellectual property at that time? they have so many projects, they dont even care if you walk in.matter of fact, they'l be very happy to see your back through the door with your grand idea.dont kid yourself my idea,no idea is dat grand, not here in Nigeria.wat you should be praying is to get a look in first then hope for best.steal your idea?very funny.last time i was at one of their offices, the folks were looking at a $15million 4 star hotel that Standard Chattered was promoting and you want to start telling a man like dat about intellectual property of N10million project.puhleeeeeeze!

Sagamite:

You are assuming Universities are the only source of innovations or business ideas?

No, but most innovation comes from universities and research institutions. Look at California, they have one of the highest concentrations of VC's in the world because California has some of the best universities and research institutions in the world. Have you forgotten that one of the richest companies in the world, Google was started at Stanford by two PhD students who were writing there thesis on search engines.

I do think there are venture capitlists in Nigeria. The real problem would be if the business plan is well written, thought out and if the projections are factual. Many enterprenuers pitch unrealistic targets and get investors in a lot of trouble.

What some people need are actually Angel Investors and not Venture Capitalists (Google the difference). We have just formed a network of Angel Investors and would be looking at investing between 2million and 5million depending on

Projections and maturity
Return on Investment
Pull - out options / escape route
Sector - Agro allied, manufacturin, real estate e.t.c
Risk factors

Send a brief summary with FULL CONTACT DETAILS TO theforceworks@gmail.com