New programme to help startups get investor-ready

Change in the mindset has been cited as a major challenge faced when transforming startups into bankable, investor-ready and profitable entities.

Transformational Business Network (TBN), a global entity committed to nurturing early and growth-stage businesses into bankable and investor-ready entities, says its enterprise solutions address environmental and social problems.

“We design businesses to tackle both social and environmental challenges on a profitable basis so that they can scale and grow,” TBN said.

It noted that many businesses are not investor-ready due to a lack of strategy, the right structures, systems and management teams. To counter this, the firm holds a six-month accelerator programme to make the business investor ready by building character, and helping them with their strategy.

To make startups more bankable and profitable, the accelerator programme that has been in operation for three years employs at least people with revenues of about Sh5.2 million. When it comes to funding, lack of the right legal paperwork, structures, and processes are some of the challenges that hinder startups.

“Sometimes, they are overambitious, and some are under-ambitious,” he says.

Statistics show that most startups die before their second birthday due to inadequate cash. It was noted at the forum that most businesses fail because they are undercapitalised, hence they spend more time looking for money rather than growing a business.

“The drip feeding of businesses is not the right way to build businesses, we need to give this business enough money,” said Jacob Zikusooka, regional director of TBN Africa. He says the challenges of running a business in Africa are huge, hence the need for more capital and talent for job creation. “For businesses, the most critical issue is not tax, it is more stability. We need political, economic and currency stability. Instability is not great for investors,” he pointed out.

Zikusooka noted at the fourth East Africa Impact Investment Summit that they aim to influence and change mindsets about the mobilisation of capital.

He says startups need to understand their business beyond seeking funding. “My challenge to the businesses when it comes to seeking funding would be to look at your business beyond your basic needs and family. Your business presents an opportunity to support a lot more, it could scale and create wealth for an entire generation,” Zikusooka said.

According to TBN, a bankable business is profitable and structured to scale. It does not only meet its basic needs but also has money left in the bank. Zikusooka says businesses that grow, scale and employ people are resilient hence the three-year baseline for engaging businesses for the accelerator programme.

“A challenge we encounter as investors is change in mindset. Many businesses start accidentally. We don’t have a science to doing business. In Africa, the trouble with that is that there comes a challenge because as the business grows, a person starts facing issues they did not anticipate,” Zikusooka said.

He advises that startups should get basic training before starting a business. “It takes more than passion to run a business. We recommend that you work your plan, and stay in community with other entrepreneurs,” he says. An unpredictable tax environment, and lack of funding for doing business, are some of the challenges faced by start-up businesses.

Dr Anguku, a business lady operating a clinic in Machakos and a beneficiary of the TBN accelerator programme says she sought TBN services because she needed to know how to offer quality and affordable orthopaedic surgery without compromising quality.