The Hard Truth About Funding: Is Your Business Ready?

According to the World Bank, 80% of entrepreneurs' biggest challenge is lack of funding. Many businesses with potential have been prevented from scaling because of this limitation. Words can't fathom the leverage funding gives to businesses from wide-reaching impact, exponential growth, substantial revenue gains, and the ability to respond to market changes more easily is just a few. Unfortunately, based on available data, approximately 80% of startups don't see their products through to a full scale-up, and only a tiny fraction reach significant scale.

In October 2024, Africa's fastest-growing fintech was recognized by the Financial Times. Moneipoint received a sum of $110 million in funding, reaching a valuation of over $1 billion; as a result, it skyrocketed this financial institution to an enviable height. The funding led to its massive growth and put it up globally. They didn't just have great products, but they knew how to position themselves for serious funding. Globally, it became trusted by over 10 million businesses and processes average monthly transactions valued at $12 billion as of now.

Before positioning themselves for funding, they had shown a track record of profitability; it wasn't just promising, but it was measurable. In the previous year before the funding came in, they processed over 433 million transactions monthly, a 205% increase from the previous year, and 5.2 billion in full-year volume. They showed scaling potential, clarity of execution, and repositioned themselves to attain global height.

What funding did to businesses valuation: Moneypoint went from $400 million to $1 billion, Uber's valuation rose from $4 million to $18.2 billion, and Jumia, launched with $326 million, reached approximately $1 billion.

Lurking in the shadows are potentials awaiting to be maximally utilized; these success stories show how the potential for entrepreneurial success embodies the transformative impact of innovative ideas. Business owners who desire scalability should know that potential is not enough; proofs are needed, performance backed by data framed with strategic intentions; otherwise, it's just fantasy at its finest.

Position yourself by:

1. Having a clear vision and an execution plan.

2. Fixing your foundation and get verifiable numbers to know how to use your data effectively.

3. Showing the problems and how you are solving them.

4. Demonstrate traction—show working results (revenue growth, customer growth and retention, and partnership deals).

5. Show a track record of profitability or a clear path to it.

6. Attend masterclasses and trainings to pitch effectively.

7. Build relationships by attending events.

8. Collaborate and support campaigns to give an edge.

Having an understanding of the prerequisite is a game changer because funding doesn’t come to those who need it. It comes to those who’ve earned the right to multiply it. The question now is, can you?