Decoder: 6 Alternatives To Venture Capital Funding For Botswana Startups


Today’s tech media does an excellent job of covering “successful” funding rounds. As a result, there is often the misconception that getting investors to pony up a bunch of cash in exchange for upside is easy. In fact, for anyone not actively involved in a fundraising process it can often seem like dollars are free flowing and anyone with an idea can raise capital and that anyone who can't is unworthy of running a startup

This could not be any further from the truth.

Just because a company can’t automatically raise venture capital doesn’t mean it’s a bad business. It also doesn’t mean it will never be able to raise money in the future — or even today. If you’ve been unsuccessful raising from a VC the trick is to simply adjust your thinking as to what the appropriate source of capital is for your company is.

This week's Decoder article looks at various alternatives to venture capital funding for startups in Botswana.

1. Bootstrap It

While it may sound painful, continuing to fund the business out of cash flow or your own personal investment may be the best way forward. This solution involves no dilution to the founders if there is no historical outside investment. If you are successful, you should be able to raise at a higher valuation once you have additional proof-points in the model.

2. Insider Round

Not all rounds are created equal. If this is not your first round of institutional funding, try going back to your existing investors for additional capital. While it may be set at a lower valuation, or done in a way where no valuation is set today, the diligence process should be less painful. Asking for additional funds will afford you more runway to hit your goals before raising outside money.

3. Debt

Depending on the stage of the business, debt may be a viable option for the company. Debt terms are great right now. If you can take advantage of the debt markets, you should.

4. Angel Investors

Not every business is ready for venture capital today. Sometimes a non-institutional round is what the company needs to set it up for success. Friends, family, high-net worth individuals, professional angels, and folks from the industry may all be viable sources of capital when VC money is not an option.

5. Private Equity

There are many small-market private equity funds that can work with a slower-growth, yet profitable business. However, this is not for many VCs. That said, there are investors who target these specific opportunities as it may fit into their risk profile a bit better. Step back and take a wider view — you may be targeting the wrong type of investors.

6. Sell the Company

Keep in mind that there may be some strategic value to your business that is not inherently available to VCs today. If the situation arises and it makes sense for the business, the investors, and the employees, you should certainly evaluate whether or not today might be the right time to sell.


Can’t raise VC money? You still have lots of other options. Besides, raising from a venture investor is just the very beginning of a very long and tough journey — raising capital is simply a means to an end, not the end itself.

Article first appeared on Scale Finance

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