Sometime last month, we ran a twitter poll asking about the major challenges that businesses face in Nigeria; and as you can see from the infographic above, the results were quite telling. These results are consistent with findings from a world bank survey which illustrated that ‘Access to capital’ is the leading challenge to ease of doing business in Nigeria. So, our research team spent some time looking for ways to overcome this hurdle and one solution that we found was Microtraction.
Microtraction is a venture capitalist firm which provides hassle-free funding for technology driven businesses. Microtraction funds smart, relentlessly resourceful founders who are building high growth, technology driven businesses in Nigeria. In order to gain funding from Microtraction, here are the steps you need to take:
Step 1: Application
The first step to gain access to capital from Microtraction is applying using this link - application link. The link will take you to an application form where you will be required to provide a few things like:
- Your company name
- The problem you are trying to solve
- Your solution to the problem
- Your market size
- Your progress so far
- The bio of the founder(s) of your business
After successfully filling the application form, Microtraction will get back to you in 10 days.
Step 2: Phone Conversation
If Microtraction accept your application, you will be put through to the next stage which will involve a 10 min phone conversation with a Microtraction associate. This phone conversation will mainly be to clarify your application answers and to get a deeper understanding of the answers you provided.
Step 3: Meeting
If, after the phone conversation, Microtraction are impressed with your business and wish to further your application process, you will get an in-person (if you’re in lagos) or remote video call (out of lagos) meeting with Microtraction’s managing director, Mr Yele Bademosi.
A few things Mr Yele Bademosi would want to clarify about your business are:
- How big can your business be? Is it a scalable business? Can the company generate $25 million per annum at scale on the most conservative scenario if executed right?
- Do you have a clear understanding of your customers problems?
- Have you spent time think about your solution and is this solution based on unique insight into your customers?
- Why are you the right founders for your business? Do you have domain expertise in the problem or is the business founded on a personal pain point that you are trying to solve?
- How will you acquire customers? Is there a validated marketing channel that can overcome adoption risk all startups face?
- Last, but not the least, he’d ask himself – “If I was seeking employment, will I work for this founder?” . He believes this question is important as it means he has developed an independent conviction about the potential for the business to be successful and is willing to commit the next 5 years to help the founder achieve their vision
Step 4: Funding
If you successfully scale through the meeting, Microtraction will get back to you, within a month,with an offer. The first offer is typically $15000 (₦5.4 million) for 7.5% equity in your business. If they feel deeper conviction about your startup team and business, they will write a second cheque of $50,000 at a million-dollar valuation of your business, which equates to 5% equity. So, in total, Microtraction can invest up to $65000 (₦23,400,000) for 7.5%-12% equity in your business, depending on how things play out.
So if you are one of many ambitious tech entrepreneurs out there looking for access to capital for your dream idea, Microtraction might be the answer to your problems; all you have to do is follow the steps we have provided in this article. We wish you all the best in your startup journey.
If you enjoyed or learned anything from this post, please like it, share it and leave a comment! For more DailyKobo advice, click here to subscribe to our newsletter and don't be afraid to get in touch.