Connect with us

Business

What investors look for before funding a start-up

Published

on

When you approach investors for funding you need to know exactly what they are looking for in your proposal. You therefore need to cover these issues in your discussion with the prospective investor.

Obviously each investor might have his main issues that he wants addressed but there are general issues that apply to a majority of investors which you should highlight in your proposal.

An investor is firstly interested to know you and to be able to trust you. Investors are more likely to invest in people rather than just ideas. You should be a man of integrity whom he can entrust with his funds.

The business idea that you want funded might be good but if the investor doesn’t feel comfortable to work with you then there is no way he can part with his money and get into a relationship that will likely be sour.

It’s also about synergy. Is the investor likely to add value when he partners with you. An investor will likely invest in areas he is comfortable with, areas he has some expertise or has successfully operated in before.

This will enable the investor to engage with the entrepreneur well.

The other critical factor that an investor will want to get comfort on is the management team that will drive the business. Is the team capable of driving the mission?

Does it have the right skills? It’s therefore very key that you assemble the right team that will be able to take the business to a higher level.

An investor would want to know why you say that your team is qualified to do well in the industry you are getting into. What expertise does the team bring to the table?

What is your and team’s past record in a similar position? The investor should be impressed with the team. The team should at least be technical and business-oriented, the members should complement each other and show some previous experience in the industry they are facing, team members that have a proven track record of delivering goals on time, a team that can handle the responsibilities bestowed on them.

There should be a strong chemistry on the team, that is, they should be able to work together.

If an investor is to take a risk by investing in your business then you need to prove that the market size justifies one taking the risk.

Investors are looking for companies that will grow in which there will be economies of scale and also where returns on the investment will be attractive enough.

You should be able to establish how big your share of the market is likely to be. You can find out this by doing a market research. However if it’s a new product or service it might not be easy to establish the market size with certainty but you should therefore be able to say why you think the market likes your product.

The product or service that you intend launching should be one that meets a need. There should be a good fit between the product and the market.

In your presentation to prospective investors you need to show what differentiates you from the competition. What is your competitive advantage that gives you the edge over your competitors?

What is that differentiator that will outdo your competition in the long run? This could be a unique technology, skill or you might have patented your idea so that no one is able to copy you and compete with you. An investor is looking for long term profitability.

An investor would be interested to see your business plan. He wants to see in the business plan the clarity of your business model, whether the business is viable as reflected by the financial projections, how you will execute the plan, what’s the time line to get to profitability, and whether it does show that the entrepreneur knows what he wants to get into by how thorough the business plan is.

So make sure that you have prepared a very clear, concise and complete business plan, Ensure you write everything from the problem that you want to solve, the business model that shows how the money will be made, the market size, your competitors, your competitive advantage over the competition, the risks and challenges that the business is likely to face and lastly how the investor will make his money.

It will be clear to every professional investor that an entrepreneur without a business plan or who has a poorly written business plan is on the path to failure.

You need therefore to show the investors that you have done a thorough analysis of your business idea and how you will execute your plan.

Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy and performance management.

He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.  

l For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or +266 62110062 or on WhatsApp +266 58881062

Continue Reading
Advertisement

Business

Jobs galore for Lesotho

Published

on

94 000 jobs.

That is what the Millennium Challenge Account (MCA-Lesotho) will create in the next 10 years, according to Prime Minister Sam Matekane.

The MCA-Lesotho was created by the Lesotho parliament last year after the United States’ Millennium Challenge Corporation (MCC) found Lesotho eligible to receive development funds.

The MCC gives development grants to poor countries that respects democratic principles and human rights.

The MCC has unlocked a staggering US$322 million (over M5 billion) to the government of Lesotho after the country enacted three laws the protect people’s basic rights this week.

Matekane advised youths to visit MCA-Lesotho offices to understand how best they can benefit from the fund and the projects that will be financed.

The MCC’s investments are aimed at increasing the availability of water for household and industrial use, enhance watershed management and conservation methods, rehabilitate health infrastructure and strengthen health systems, and remove barriers to private investment.

The MCA-Lesotho’s Health and Horticulture Compact seeks to assist the country in unlocking equitable and sustainable economic growth in partnership with the private sector by addressing key constraints to growth.

Matekane said the job creation potential of the horticulture project alone is estimated at 4 000 jobs.

This excludes indirect jobs that will be created through packaging supplies, logistics, cold chain activities as well as the processing of the output.

“Let us all be ready and ensure we spend all the funding that is available,” Matekane said.

He said the money is going to be invested in agriculture, trade and industry, value chains, infrastructure development, tourism and creative sectors.

“The Compact has come at a critical time when the country is in dire need of financial injections to revive the economy,” he said.

“This second Compact forms the core of Lesotho’s private sector-led economic growth, recovery and job creation agenda.”

He said the MCA staff should work diligently, to implement this Compact.

“There are several Basotho businesses out there that are eager to seize the opportunities that the Compact brings,” Matekane said.

“Serve them with integrity, accountability and dedication.”

Matekane said the government has established the Cabinet Sub-Committee on the Compact which is under the leadership of Deputy Prime Minister Nthomeng Majara.

The sub-committee is mandated to ensure that the government provides overall oversight, strategic direction and support for successful implementation of the Compact.

He said he expects the MCA-Lesotho to ensure the full implementation of the project within the next five years.

“Our economy needs this capital injection to boost productivity and job creation,” Matekane said.

Matekane said the government had to enact three pieces of legislation which were necessary to support the investments that the MCC is making.

The enacted laws are the Labour Code Amendment Bill, the Administration of Estates and Inheritance Bill and the Occupational Safety and Health Bill.

Majara Molupe

Continue Reading

Business

Bank spearheads career expo

Published

on

Standard Lesotho Bank will tomorrow host a career expo at the ’Manthabiseng Convention Centre for high school students who will sit for their final exams this year.
The 14th Annual Standard Lesotho Bank Career Expo was launched in Mokhotlong on Monday where the Lesotho Highlands Development Authority (LHDA) welcomed students in areas around the Polihali Dam construction site.

On Tuesday the expo was at the Butha-Buthe Community High School, yesterday it was at Assumption High School in Teya-Teyaneng while today it is in Quthing at Holy Trinity High School.

The five-day nationwide event is dedicated to connecting ambitious Basotho youths with exciting career opportunities.

Standard Lesotho Bank says it’s career expo “is a cornerstone of the bank’s commitment to empowering Basotho youth and shaping the future of Lesotho’s workforce”.

The 2024 edition of the event is the 14th where the bank is now the headline sponsor of this important expo that reaches about over 10 000 students countrywide.

The expo promises to be an even better offering where over 35 institutions of higher learning from Lesotho and South Africa as well as professional bodies will explain different career options to Basotho students.

Standard Lesotho Bank communications manager, Manyathela Kheleli, said students in Mokhotlong did not only learn about different engineering disciplines but got to appreciate engineering in action at Polihali.

He said it was a lifetime experience for students from Mokhotlong, “thanks to the collaboration with LHDA, who are fully responsible for the Polihali leg of the event”.

There were also motivational speakers from different professions in the bank and other selected institutions.

Key influencers in the football fraternity, former Likuena captain and now Corporate Responsibility Manager at Letšeng Diamonds, Tšepo Hlojeng, and former Orlando Pirates dribbling wizard, Steve Lekoelea, are among the influencers that have been invited to address the students.

The event is a sponsorship initiative under Personal and Private Banking that is open to all youths, communities, and individuals, where the bank intends to use this event to drive the new Youth or student Customer Value Proposition and attract high school students to open accounts ahead of their enrolment into tertiary institutions.

The objective of this sponsorship is to first create an environment where future leaders of Lesotho will be nurtured and informed of top career choices that demonstrate various skills requirements for the growth of Lesotho’s economy.

Secondly, the career expo is a clear demonstration of the bank’s intention to put youths at the centre of its initiatives.

This position is shown by the bank’s initiative to not only develop special products for youths, such as the Youth Account but also through several initiatives that promote youth empowerment. These include the bursary scheme and the Bacha Entrepreneurship Project.

“We are more than a bank for our youths, but a good corporate citizen and a partner for the education for Basotho,” Kheleli said.

“We believe that as we grow our youths, they will become assets to this country and by extension, develop into a feeder market for our banking products when they enter the job market,” he said.

The bank has invested M150 000 towards sponsorship of the annual Career Expo.

Staff Reporter

Continue Reading

Business

Ministry launches fresh industrialisation drive

Published

on

A new policy to drive industrialisation in Lesotho was launched in Maseru this week.
The Lesotho National Industrialisation Policy 2024–2028 is being spearheaded by the Ministry of Trade.

The ministry says the policy seeks to accelerate economic diversification in the industrial base, enhance productivity and productive capacity for industrialisation and advance domestic and regional value chains for industrialisation.

It also seeks to promote and develop industrial clustering, promote inclusive industrialisation, support entrepreneurship development and strengthen business linkages.
The new policy will also seek to enhance energy efficiency and sustainability, promoting technology adoption and innovation, services-based industrialisation, and stimulating agro-based industrialisation.

This is not the first time Lesotho has launched an industrialisation policy. Previous policies have all failed.

The first attempt was the 2015–2017 industrial policy, whose aim was to accelerate the industrialisation agenda and address key challenges facing the country.

The second one was the 2018–2023 policy, which after its unsuccessful execution during the three years of implementation, the government extended it to the National Strategic Development Plan Strategic Focus (2023/24-2027/28).

The new industrial policy’s target is set to activate implementation on innovation to enhance the efficiency and competitiveness of domestic industries, create decent jobs and improve the welfare of Basotho.

Thabo Moleko, the Ministry of Trade Principal Secretary, said the implementation of the new policy is set to deepen economic growth, promote industrialisation and enhance competitiveness.

“The plan includes greater investment in industrial development with the intention to create employment and incomes while building on maintaining the existing industrial trade,” Moleko said.

Mamello Nchake, a consultant for the United Nations Economic Commission of Africa (UNECA), said the development goals of the industrial policy are set to ensure an achievable inclusiveness and equitable growth as they aim to create sector-led quality jobs for Basotho.

Nchake said the goals are meant to “develop and maintain enabled infrastructure that is critical to the private sectors and also to promote gender equality, environmental and climate risk management”.

“Moreover, the policy (will seek to) harness the collaboration with private sector firms to address common challenges and promote industrialisation,” she said.

The workshop discussed constraints that hindered the implementation of the 2018 – 2023 policy that undermined investment and trade opportunities.

The constraints include access to land for investment, inadequate provision of infrastructure, an outdated and a lack of appropriate regulatory environment, low productive capacity, market size and topological constraints, unstable macroeconomic environment, external factors, and over-dependency of trade preferences.

To address the strategic objectives, the previous industrial policies had proposed tax incentives for industrial development, trade policy and regional integration as the main vehicle for industrialisation and structural transformation.

They had also proposed mechanisms for policy coordination and implementation, institutional alignment and linkages.

However, several key challenges were identified in the implementation of the 2015-2017 industrial policy.

They included limited financial and investment capacity to effectively implement the industrial policy actions.

“Financing instruments are not aligned with the level of development needs of the private sector,” stakeholders heard at the workshop.

They also heard that there is “persistent dependency on few industries that poses risks in the face of global economic uncertainties and ever-changing consumer preferences”.
Another identified problem is limited investment climate that makes it costly for foreign firms to invest in Lesotho.

It was also observed that a shortage of specialised education and skills crucial for growth of industries impact the ability of firms to adopt advanced technologies and improve productivity and the productive capacity.

Stakeholders also heard that there is limited global competitiveness and access to global markets.

Lesotho’s industries, they heard, particularly textiles and garments, face competition from other low-cost manufacturing countries.

The country is also spooked by poor coordination between the implementing agencies due to a lack of a clear implementation framework.

Khahliso ’Molaoa

Continue Reading
Advertisement

ADVERTISEMENT

Advertisement
Advertisement

Trending