What Are Seed Investment Funding Options For Startups In Nigeria?

Seed investment funding or seed money, sometimes known as seed funding is the money needed or used to set up a new business.

Ok, now you have a million dollar idea, you have written a very detailed and comprehensive business plan, you are so excited that you can hardly wait to see your business grow and become successful. Suddenly, you are hit with the hard reality of very little or no capital at all.

Seed Investment Funding options for Nigerian Startups

Getting funds or capital for your startup is an essential factor for its launch. Even though many entrepreneurs, investors and business owners may argue that money is not the most important thing for a startup, its importance cannot be over-emphasized because you’ll need it to run a successful business.

According to statistics showing various seed money options by Businessideaslab.com:

Personal Funds (Personal credit) – 34.9%
Friends and family – 11.29%
Venture Capital – 4.14%
Angel Investors – 3.76%
Banks – 2.63%
Crowd Funding – 0.96%

From the statistics above, you have seen that the highest percentage of seed money is from personal funding and second to family and friends. Hence, I will be writing about seed investment funding for startups in Nigeria except friends and family.

Seed Investment Funding options for Nigerians Startups

1. Grants:

Grant is an amount of money given to an individual or business for a specific project (startup). Grants could come from the government, international organizations or NGOs. Getting a grant to fund your startup is not always an easy task but with thoughtful strategies you could get it easily and quickly.

There are many grants in Nigeria, below are few of them:

  • Youth Employment in Agriculture Program (YEAP)
  • Grofin.com
  • The Ford Foundation
  • Shell LiveWIRE Nigeria
  • African Entrepreneurship Program (AEP)
  • Africa Innovation Award (AIA)

2. Crowd Funding:

According to Wikipedia, it is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically from the internet.

In a clear and simple term by Fundable.com, Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money.

In Nigeria many people are not familiar with the term. Even some bankers and finance personnel do not understand crowdfunding. Despite the challenges facing crowdfunding in Africa (Nigeria) like trust and lack of understanding of the relatively new concept of crowdfunding, there are crowdfunding platforms focusing on African Startup.

We have:

  • JumpstartAfrica
  • Akabbo.ug
  • FundaSolva
  • PushandStart
  • StartCrunch
  • NigeriaCrowdfunding
  • CFundin

3. Business Plan Competition:

Many organizations offer business plan competitions and award to encourage and help entrepreneurs with innovative business ideas to grow their startup or growing business. Some of these organizations are:

  • Anzishaprize.org
  • IsDB Business Plan Competition
  • Development Innovation Ventures
  • BID Network
  • Argidius-ANDE Finance Challenge (AAFC)
  • Business Plan Competitions (BPC)
  • African Diaspora Marketplace
  • The African Innovative Prize
  • Ernst & Young
  • Innovation Prize for Africa (IPA)

Get more details about these business plan competitions at AfterSchoolAfrica.com

4. Strategic Investors:

Strategic Investors can be companies or individuals who invest in startups to either solve a problem they currently face or to expand into a new market. Large corporations, such as State Street, IBM, Intel and Lucent have venture arms that invest in startups (according to Forbes).

This may not be easy for an average entrepreneur in Nigeria to come by but then you can always try it out and if it doesn’t help your startup, quit.

5. Co-Founders:

real estate business partnership, seed investment funding options for Africans

It is wise to find a co-founder who has complementary capabilities based on the business model you want to implement. That way, your startup would be more self-sufficient and that means you wouldn’t spend so much because you’ll be hiring very few people.

6. Angel Investor:

This does not mean angel from heaven who invests in business.

According to MyTopBusinessIdeas.com:

An Angel Investor (or angel) is a high net-worth individual who typically invests in and supports startup companies (brand new ideas by existing companies in their early stage of growth, with the aim of achieving higher returns than the typical public markets provide.

Most entrepreneurs agree with the fact that angel investing is one of the best strategies for raising equity capital because of its flexibility in deal structuring and financial decisions but as a Nigerian entrepreneur you may be unable to locate angel investors in the country. So you can also look out for foreign angels who are interested in investing in Nigeria.

Notable Angel Investment Firms in the United States are:

  • New York Angels Inc, New York City
  • Ohio Tech Angel Funds, Columbus, Ohio
  • Hyde Park Angel Network, Chicago
  • Golden Seeds LLC, New York City

Notable Angel Investment Firms in Africa:

  • TBL Mirror Fund
  • eVA Fund
  • West African Synergies
  • Africa Media Ventures Fund
  • Jacana Partners
  • Angel Investment Network
  • Fanisi Capital
  • Adlero Capital
  • Invenfin Venture Capital
  • East Africa Capital Fund Partners (EACFP)

(As seen in AnswersAfrica.com)

Also Read: How to Get Small Business Loans from Nigerian Banks

7. Venture Capitals:

Also known as Venture Capital Firms, Venture Capitalists or VCs. This is made up of Companies of many investors who are willing to fund high risk, high potential startups in return for a certain Percentage of shares in the company.

Honestly, getting funds from VCs is usually very tough because they are seasoned investors that know the intricacies of startup, investing and running businesses who want nothing less than result or ROI. If you think you’ve got a good business idea that can stand the scrutiny of Venture Capitalists, go for it and don’t look back.

Notable Venture Capital Firms in Nigeria according to MyTopBusinessIdeas.com

  • Vetiva Capital
  • Solid Rock Securities and Investment Limited, Lagos
  • New Devco Investment and Securities Limited, Lagos
  • Riggs Ventures West Africa Limited, Lagos
  • Best Future Integrate Investment Limited, Lagos
  • Profound Securities Limited, Lagos
  • Osprey Investments Nigeria Limited, Abuja
  • Webar Limited, Abuja
  • Disok International Limited, Kaduna

You may try all this options and fail – see why most businesses fail, but that doesn’t mean you have the worst business idea on earth. The world is full of great ideas already but only short of great business men. You know there’s always a way out of every tough situation and you can’t afford to give up now.

If you try all these options mentioned above and fail, there are other creative ways to raise money for your startup such as, starting on a very small scale that you can afford to fund, you can start making money from day one of your business or get a temporary job to fund your startup.



This post was written by Promise Excel. A Content Marketer, Social Media Strategist and an active promoter of Entrepreneurship among Nigerian Youths.

Also Read:

Francis Nwokike

Francis Nwokike is a Social Entrepreneur and an experienced Disaster Manager. I love discussing new business trends and marketing tips. I share ideas and tips that will help you grow your business.

4 Responses

  1. Afrideo says:

    This is the best read that has provided me the knowlegde to get funding for my video startup.

  2. Miracle says:

    Nice write up. Thanks for enlightening me TTE.

Leave a Reply

Your email address will not be published. Required fields are marked *