4 fastest ways to fund your startup in Nigeria

How to fund a startup business in Nigeria

They say money can’t buy happiness. I say that’s only partially true. Sure, money can’t buy you fulfilling relationships or wholesome values like honesty and integrity. But it can buy you lots of awesome stuff. And awesome stuff seems to make people pretty happy.

More importantly, money can give you amazing opportunities to fund your dreams. The problem is that a huge majority of startups struggle to find business funding solutions. But there’s good news: you have options and opportunities.

If you have a business idea, but feel restricted by your financial resources, this blog post is for you.

Unfortunately, there’s no magical cure for financial problems. But with some thoughtful effort and exploration of the possibilities, you can break the spell that money often has over new entrepreneurs.

At the core of every entrepreneur is someone who loves problem-solving. Funding your startup or business idea is just another opportunity to practice that talent.

Business idea

Be humble. Take a part-time job in your industry to get hands-on experience and gain some networking contacts. Seek trustworthy partners, talk with investors or lenders, research grants, enter into contests, learn some DIY skills – whatever it takes to get you far enough along to re-invest and really grow.

There are so many options. You can do anything you put your mind to. The hardest part is making the decision to commit.

You may also like:

  1. How to choose profitable business model (A-Z Guide)
  2. How to find a good business idea (expert guide)
  3. 3 easy steps to validate your business idea
  4. 9 profitable side hustle to make money online  

In this blog post, we’ll cover:

  • How to evaluate your own relationship with money, so you’re in a good headspace
  • How making a few personal changes can facilitate startup funding
  • Different ways to fund a business, from bootstrapping to loans to venture capital

And there we go.

Evaluate your relationship with money

It’s no secret: most new entrepreneurs will need some business funding help, whether it’s rearranging their own personal finances or trying to get some capital from a third party.

Regardless of the route you’ll take, it’s a really (really) good idea to evaluate your personal finances, as well as the relationship that you currently have with money.

When you have a better handle on your finances and your mindset toward them, you’re better equipped to manage incoming and outgoing cash flow for yourself and for your business. Plus, you’ll be able to make better financial decisions moving forward.

So how do you evaluate the relationship with money?

Make a cash flow statement. If you don’t already keep a basic track of your cash flow, this process can work wonders for your perspective on your financial situation. The main idea is to track your income against your expenses. This way, you’ll know if you have disposable income to invest, and how much of it.

How can you feel more financially comfortable?

The obvious answer to this question is, ‘to have more money.’ But there’s a deeper question here: do you consistently feel like money is one of your biggest obstacles?

This is a problem that many new entrepreneurs – and let’s face it, many people in general – have. In fact, some entrepreneurs find themselves failing over and over again, with no real understanding of their failures except that they didn’t have enough money.

Other common answers are not having enough time or business knowledge, but let’s focus on money for now. Since this is often a recurring problem, it helps to focus on shifting your mindset and your money habits.

For example, if you’re in debt, you may want to spend some time reducing or eliminating it before you try to bootstrap your business. Maybe you’d like to cut out certain luxuries and be more aggressive with your savings goals, so that you can feel like you have a fluffier financial safety cushion.

You might also consider debt consolidation, which is a type of personal loan that can roll all of your monthly payments into a single payment that’s often lower each month.

Keep in mind that debt consolidation will cost you more in the long run – monthly payments are lower, but the agreement terms are longer. So you’ll want to go into it with the mindset of paying off the loan sooner than your agreement ends.

Whatever you choose, the goal is to feel better about taking the risks you can’t avoid when you’re starting a new business. Now that we’ve gotten the pep talk out of the way, let’s look at some different business funding options.

Understand debt vs. equity

Before we go into specific types of startup funding, it’s important to understand the concept of debt vs. equity funding.

  1. Debt funding is when you borrow a fixed amount of money that you intend to pay back, plus interest for as long as it takes to pay back in full. If you’ve ever used a credit card or gotten a loan, you’ve used debt funding.
  2. Equity funding is when you ‘sell’ a percentage of your business in exchange for capital. This is typically the case for angel investors and venture capitalists. Ever seen the show Shark Tank? Equity funding at its finest.

Typically, equity funding is most commonly used to fund high-risk innovation and technology startups. These include new products, services, and business models that add something unique to the marketplace. If you’re planning to start a freelance business or open a franchise, debt funding may better fit the bill.




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What is the best strategy to fund a startup?


  1. Bootstrapping

The quintessential scrappy business model, bootstrapping involves funding your business with personal money. While the most common type of bootstrapping involves using your savings or keeping your 9-to-5 to have some income, there are some pretty interesting and creative stories from savvy bootstrapping entrepreneurs.

Some ideas include:

‘Pre-sales’ for your product or service: Say you’d like to start a lawn care business, but need money for equipment. You could try pre-selling lawn care services to friends and family (or via local crowdfunding) collecting money up-front so that you can perform those services after you’ve bought the equipment.

Selling belongings you don’t need: If you live in a city with great and affordable public transportation, you might consider selling your car and taking the train instead. A little sacrifice up front can bring big returns.

Capitalize on your assets: Have an extra room in your house or apartment? Consider renting it out on Airbnb or a similar homestay platform. While hosts and guests generally have positive reviews, you might have to deal with some… interesting experiences. But hey, it might be worth it in the end.

  1. Loans

Many people find startup business loans intimidating. On top of that, loans are getting harder and harder to obtain from traditional banks. But there are still several solid options for new businesses, especially when you don’t bite off more than you can chew.

Common loan types include:

Small business loans: The most traditional route is to go through a bank, but that process can be a real pain – on top of how tough it can be. There are often a lot of startup business loans criteria to meet, like strong credit, lots of paperwork, and adequate collateral. 

Collateral is an asset like real estate, inventory, or equipment that the lender can seize if the loan isn’t paid back. The good news is, there are loads of places to get a small business loan. Even PayPal offers them. And there are opportunities even if you can’t meet a list of strict requirements.

If you’d like some help with the process, look into small business lending marketplaces like All Business Loans and Lendio. These resources tap into a network of business lenders to try and help find the right fit for your startup business loan needs.

Microloans: If you have trouble securing a traditional loan due to poor credit, lack of collateral, or other issues, look into business startup microloans. These typically range from $5,000 to $35,000 and are most commonly offered by non-profit organizations.

SBA loans: If you’re in the U.S., you might be eligible for a loan from the Small Business Administration (SBA). Keep in mind that SBA is only a ‘last resort’ kind of loan – you have to have already been turned down from a bank or other financial institution.    

Family or friends: Some people consider microloans to also include getting small loans from family and friends. While this can be a great option for some, make sure you set clear, attainable terms for the loan. Otherwise, you might not only risk your business – you might risk those relationships too.

  1. Crowdfunding

Something of a social phenomenon, crowdfunding involves getting small amounts of money from large amounts of people – sometimes millions, depending on a project’s reach and popularity. Business crowdfunding is a booming industry, and it’s only projected to grow.

There are three main types of crowdfunding campaigns:

  1. Rewards-based: Entrepreneurs offer rewards in exchange for cash. For example, an entrepreneur raising capital for a new clothing line can offer discounts, limited edition pieces, or other perks to crowdfunders.
  2. Equity-based: Also called crowdinvesting, this form offers equity such as stock, revenue-sharing, or equity ownership stake in the company at a later date.
  3. Donation-based: Giving out of the goodness of a crowdfunder’s heart. This isn’t particularly successful, although you might receive donations from sympathetic business owners who have experienced disaster themselves.

There are several business crowdfunding platforms, including:

  • Kickstarter
  • Indiegogo
  • Crowd Supply
  • Fundable
  • Ulule
  • Patreon
  • StartEngine
  • WeFunder
  • Crowdfunder
  • NextSeed
  1. Angel investors and venture capitalists

Angel investors and venture capitalists are people or entities that invest money into businesses. There are some key differences that relate to the amount of money invested, the risk involved, and the stage of the business they’re investing in.

Angel investors are individuals who invest using their own money. In order to be considered an ‘accredited angel investor,’ they need to have a net value of at least $1 million and an annual income of at least $200,000. You may even have a friend, family member, or social contact who’s an angel investor.

Venture capitalists (VCs) are individuals or firms that typically use pooled money instead of personal money. This money may come from large corporations or investment companies.

Angel investors are typically more focused on helping build new businesses, so they’re more likely to invest in a startup that isn’t completely off the ground yet. On the other hand, VCs often take less of a risk, opting to invest in businesses that are already established.

Another key difference is investment amount and return expectations. The average angel investment is about $330,000 with an expected return of 20–25%, while the average venture capital investment is a whopping $11.2 million with 25–35% return expectation.


Now that you have an idea of where to get business funding, let’s discuss some of the logistics of starting your official business, including legal considerations and how to write a solid business plan (which is especially important if you want to snag a loan or investment). We will discuss that in my next post.

If you consider starting a profitable e-commerce business in Nigeria click here to download my free guide on how to build a 7figure e-commerce venture in Nigeria. Don’t forget to share this post with your friends on Facebook, Twitter and WhatsApp. Thank you!

BIlal Abdullahi

Hello friend! Welcome to my blog. I am Bilal Abdullahi, the CEO and founder of Campus Entrepreneurs Hub. An inbound online platform where I share my in-depth knowledge in affiliate marketing and content marketing. I love kissing pen and romancing keyboard to write boring contents. I have itemized proven techniques to attract, retain and convert attention to money with a battle-tasted content marketing strategy. Contact for consultation. Email: [email protected]

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