Startup Fundraising During A Downturn

The first half of 2022 saw African startups raise about $2.9 billion. In Q2 '22, #Africa was the only region that continued growing YoY in terms of quarterly start-up #funding raised (source).?

Although we are in the middle of an economic downturn, there is more funding flowing into Africa as the startup industry continues to develop value. But the truth of the matter is that it's not easy for a startup to raise in such economic conditions.?

As tough as it may be, prepare to be flexible when you need to close deals. Sometimes, the deals we get are not as great as what we envisioned when we set out to raise. There may be a need for a bit of compromise to ensure that your startup has more runway and most importantly, get to the growth that it needs.?

However, be careful to not throw away equity. When it seems difficult to raise, it's easy to become desperate and give away equity for way less than its true value. As founders, we have to try and hang on until we get the best value for what we are willing to share. Even during a downturn, you should be able to get something close to your product’s true value.?

You have to maintain a positive outlook despite the world economy suggesting otherwise. I believe that a great product will still be great even in an economic downturn. You have to make sure that you keep building to the best of your abilities because somewhere out there, someone is watching. Keep thinking about your prospects as positively as you can.?

Build relationships with investors, keep them updated, and connect with them when the time comes. The joy of living in a world easily connected by technology is that it has become a bit easier to get in touch with people. Try and build as many relationships as you can with investors or people that can lead you to investors. A 10-minute zoom call here and there can make a significant difference.?

It is hard to tell when the markets will bounce back, so if your business is making some revenue, the better, keep bootstrapping to profitability! Extend your runway as much as you can.