If you own a small business in Nigeria that has shown exceptional long-term growth potential, venture capital financing can be a beneficial path to expanding and scaling your company’s operations. Venture Capital Firms in Nigeria specialise in providing emerging high-potential businesses with financial, managerial and technical resources to help them grow quickly. If you’re a small business owner curious to learn more, read on for an overview of how you can leverage venture capital financing for your company.
How Venture Capital Firms in Nigeria Work
As a form of private equity, venture capital firms typically pool funds from various investors, however, they are usually operated by highly experienced professionals who understand how to build a business and can take an active role in decision-making, mentoring and monitoring the company’s growth. The funded company usually agrees to give a significant portion of ownership of its business in exchange for backing from the venture capital firm.
Unlike other private equity firms, venture capital firms in Nigeria focus on funding emerging companies three years old or younger, with a high potential for excellent investment returns. The funding period typically ranges between four and six years and ends with the acquisition by another private equity firm or initial public offering (IPO).
When Should You Seek Financing from Venture Capital Firms in Nigeria?
Here are the stages in your business growth when you can begin seeking a venture capitalist firm to partner with:
- Pre-Seed Stage: Funding at this stage is usually towards kickstarting a promising business plan. As this is the earliest stage of business development, it is often the riskiest for venture capitalists.
- Seed Stage: Funding at this growth stage comes after a business is already in operation but requires capital for the development or launch of its first product.
- Early-Stage: Business funding at this growth phase is to source additional capital to expand production and sales until the business is mature enough to finance its own operations.
Advantages of Financing Your Business with a Venture Capital Firm in Nigeria
Venture capital financing is a great option for small businesses for many reasons;
- Does not require the business to pay back as with a loan
- No assets or collateral is required to secure funding
- Provides mentoring, networking and expertise for business growth
- Typically provide large amounts of capital
FBNQuest – Leading Private Equity & Venture Capital Firm in Nigeria
FBNQuest is a premier private equity investment manager in Nigeria with over two decades of experience in venture capital financing. Since its establishment in 2003, the firm has invested over N20 billion in over 70 private equity companies.
Want to learn more about how FBNQuest can provide venture capital for your business? Visit: fbnquest.com/our-solutions/