Fundraising is one of the most difficult aspects of the life of a Cameroonian tech entrepreneur, and to a greater extent, entrepreneurs in most of sub-Saharan Africa.

But startup founders need funds to build great products, provide support, build a user base and a lot more. They need funds to get the right people to work with them and to buy the most necessary inputs. Funds are needed all the way through. So fundraising can’t be ignored.

However, in fundraising, there are three main categories — grants (which is readily available and can be accessed through competitions), investments (which is harder to come by) and revenue (which comes when customers pay for goods/services which for most Internet ventures, isn’t an immediate option).

Fundraising Through Investments or Grants? Which is Valid for Cameroon?

The fundraising tree

Most often, revenue isn’t an immediate fundraising option for product-driven tech ventures. This leaves most startup entrepreneurs with grants and investments. However, depending on what the entrepreneurs choose between these two, they could be making a decision to remain beggars or become full-time producers and owners of wealth.

The downsides of fundraising through grants

The motivations for choosing the grants path (most often in the name of being a social enterprise) is clear — we believe we can offer so much good to society. But at the same time, we don’t want that same society to see us as being selfish to ask for compensation in return. But what most of us fail to understand is that grants come with a big downside — lack of true ownership.

In fundraising through grants, the entrepreneurial team instead of working on a solution and business model that is sustainable, they will be working for a solution that aligns with the grantor’s criteria. Funny, most grantors don’t originate from Cameroon or Africa. As such, their proposed criteria don’t entirely tie with the local reality.

Given that most grants aren’t sustainable enough, the entrepreneurial team needs a couple of other grants. As such, they’ll have to twist their business a couple of times. In the end, losing their vision and eventually becoming beggars, moving from one grants competition to another. It is sad, but that’s the reality.

Why fundraising through investments is a more valid option

Investments, on the other hand, could be very hard to come by. But entrepreneurs who work their way to becoming investment-ready, focus on milestones that don’t only add value to the investment community but also, to their companies and to themselves. Most importantly, building for investment gives an entrepreneurial team full ownership of the problem, solution and a long-term commitment to winning.

Fundraising Through Investments or Grants? Which is Valid for Cameroon?

Investments

This difference in ownership makes the entrepreneurial team focus on the big picture with a mindset to make it or find a way to make it. This mindset builds discipline at different levels and gives the entrepreneurial team the right to develop very important strengths.

Of all the ventures I have founded (04), I’ve never been OK with fundraising via grants. From the onset, I understood the need to not make concessions just to align with a grantor’s idea of a perfect solution.

For Pursar (one of them), we did a crowdfunding campaign that I consider a grant. But we worked mainly with people who were passionate about the particular problem we were trying to solve — online payment in Cameroon. With Pursar, we also participated in Orange’s Digital Challenge which was to get a grant. By then, however, I was no more part of the team.

When entrepreneurs rob themselves of their potentials to own wealth, they’re not the only ones who suffer. They‘re robbing their communities and generations to come. When wealth is created, it is passed around the communities and down to future generations. This improves lives, enabling people to achieve more.

This generation of entrepreneurs should be wiser. Go for investment, not for grants. By going for investments, you position yourself, community, country and Africa as a whole for a much more sustainable future.

Recommend0 recommendationsPublished in BUSINESS, Business Tips, ENTREPRENEURSHIP, HUSTLER PROFILES, LEADERSHIP, SMALL BUSINESS, START UPS
Related Categories: