The path to self-employment is not only associated with work, but also costs. Not everyone brings enough equity with them. Subsidies for founders help if your own funds are not enough. Funding programs or grants can be used to overcome the first financial hurdles. We will introduce you to funding for start-ups and explain what you need to look out for with the respective sponsors…
Find out about funding for founders in Kenya
Fill out applications, submit them to foundations and authorities and wait for funding? It’s not that easy in practice. Before you apply for funding for founders, you should inform yourself thoroughly. The more you know, the better you can assess the financial situation and act calculated.
Advisory services for founders are a good first point of contact. In such a start-up coaching, all possibilities are examined, explained and weighed against each other. Professional advice often provides insights that remain unnoticed in self-study of the topic.
Nevertheless, you should of course deal with information offers on subsidies for founders of authorities and other institutes yourself.
State funding for business founders and entrepreneurs in Kenya
In Kenya, prospective self-employed people are supported by subsidies for founders. The state tries to provide as many citizens as possible with the prerequisites for founding their own company – especially when there is little capital available.
Further tips for business founders
The state subsidies for start-ups have a number of advantages and are a good start, especially if there is little or no equity. However, there are alternatives that should not go unnoticed, depending on the founder and individual situation:
grants and funds
There are countless grants and start-up funds that support self-employed people from a wide variety of areas in Kenya. There are start-up funds that invest specifically in companies from certain sectors, others are aimed at young companies that are starting their own business after completing their studies. Thorough research helps to find a suitable model that you can use to get funding.
Venture capital – so-called risk capital – is a chance for the self-employed to get financial support. In practice, however, it is not always easy: it requires an innovative business model , a large market and the prospect of rapid, scalable growth.
As a founder, you should also pay attention to a few selection criteria when looking for suitable venture capital investors (VC):
- Does the VC have a relevant network of partners, customers in your industry?
- Does the VC have enough capital for follow-up financing?
- How does the VC react in bad times?
- Do you and the VC have similar ideas regarding the exit and when?
The name risk or venture capital already suggests it: not only the investor bears a risk here – the founders financed in this way do the same. Completely free work is only rarely possible after such a round of financing. You now have co-partners with sometimes more shares than you do – so they have a say in every decision.
business angel (angel investors)
Business Angels show that funding for start-ups is not exclusively of a financial nature . Behind the term are usually private financial investors (or investor networks) who not only support start-ups with capital, but also with valuable know-how and contacts – the mixture is referred to as smart capital.
Business angels bring industry knowledge and experience with them, which is enormously helpful when starting a business. For young entrepreneurs, they are not only an investor, but also a coach and mentor. In return, the angel investor receives shares in the company.
If you have contact with business angel investors and they show interest in your business idea, you should consider the following criteria when making your selection:
- What is the investment sum?
- What is the reputation of the business angel investor?
- How up-to-date is his industry knowledge?
- How many contacts does the business angel have in your target industry?
- What is the quality of the contacts?
- What other support does the Angel investor offer – apart from money?
- How much influence should the business angel have on your decisions?
- How many shares does he want for his investment – does he rate the company fairly?
Mixture of equity and subsidies
Solid start-up financing usually consists of a mix of equity, public grants, loans and possibly the – financial and professional – support of a business angel and/or venture capital. Of course, you have to weigh up the share of the various forms of financing in the start-up financing for yourself and on a case-by-case basis.
It is crucial that you tackle the start-up financing in good time in order to remain liquid and at the same time not jeopardize the steady growth of the young company.
What insurance does a founder need?
Every founder and self-employed person must insure themselves. Health insurance is mandatory for all founders. You can choose between statutory and private health insurance. Here you should compare the tariffs exactly. Also think about later, because some insurance can increase in price.
Every founder must check other insurances for themselves. Every industry has different operational risks. You should find out which types of insurance make sense for your industry. Examples worth considering are:
- Disability insurance (BU)
- accident insurance
- unemployment insurance
- business liability insurance
- Financial loss liability insurance
- business contents insurance
- legal protection insurance
How do I apply my start-up with 10,000 shillings?
Not every founder collects millions from investors without further ado. Some startups are financially tight and have to turn over every penny. Problem: Somehow your idea has to be brought forward and made known. Preferably in an original, fun, interesting way. For example like this:
- Buy coffee
You buy 20 strangers a delicious (!) coffee and ask them to test your product. The probability that your guinea pigs will tell their friends about this episode is felt at 98 percent.
- Doing event jacking
The term roughly means that you use an event or event that basically has nothing to do with you for your own interests. For example, you advertise your groundbreaking sports results app when the city center is filled with soccer fans because of the Bundesliga game.
- Send test copies
Send test copies (or test receipts) of your product to selected bloggers. It is important to correctly identify the blogging multipliers in your industry beforehand. Encourage them to put your product through a real test and review it publicly. However, there is a risk of negative reviews.