At the ongoing Africa Startup Festival, industry leaders highlighted key factors that determine whether startups attract funding and succeed in competitive markets.
Yvonne Johnson, CEO of Indicina, emphasised that the first step in evaluating any startup is confirming the problem being solved and assessing the proposed solutions. “The first thing I do is to confirm the problem that is being solved and proposed solutions, to know how valid the proposed solution is. The other thing is the personality factor – looking into remittances and diligence on the part of the team leading implementation,” she said.
Johnson also noted that product credibility is a common challenge when seeking funding. “When you are building a solution, ensure that the product credibility is dotted. One way to overcome challenges is through product positioning – how you position the product to add value,” she added.
Chidi Iwachujwu, Executive Director of Merchannt Bank Nigeria, added that governance and structure are critical for startups seeking investment. “When you look at startups and founders who put in the structure, they tend to be responsible for everything, but governance is very important. Financiers look at a broad portfolio of businesses before committing capital, so having a structure that simplifies governance and keeps the books in order makes investment easier,” he said.
Iwachujwu also stressed the importance of founder experience. “Aside from governance, experience counts. Investors want to see how well the founder can navigate challenges that may arise once capital is deployed. If the startup can generate results in difficult times, it demonstrates they have the experience to pivot and succeed,” he noted.
The insights from both Johnson and Iwachujwu underscore the growing recognition in Africa’s startup ecosystem that credibility, strong governance, and experienced leadership are just as crucial as innovative ideas in attracting investment.
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