The challenge for the average entrepreneur at the early stage is usually financing to fund their business idea or start up. The banks won’t give you loans, family and friends don’t believe in your ideas enough to borrow you the money and even if you sold your belongings to raise the money, you’ll barely scrape just enough for what you need. The frustration has led many to throw in the towel, settling instead for the dreariness of a 9-5 which really is a 5-9 if you are in the Lagos metropolis.
The more viable option for many would be entrepreneur is usually to save from their earnings. However in most cases unforeseen circumstances have prompted many to spend from these savings leading to an abandonment entirely of the dream to start their own business. Many just wait patiently hoping someday something turns up. Few have actually heard of crowdfunding, and the opportunities it provides for the entrepreneur.
Crowdfunding is a collaborative process of financial support from a large group of individuals, usually via the internet, to fund a business, project or idea. Crowdfunding is an effective alternative method of raising finance for people with creative projects to fund their goals. It involves soliciting and collecting relatively small amounts of money from a large number of people. In Nigeria it has not been fully embraced compared to the US where $1.5billion was raised in 2011 via crowdfunding. Major players in crowdfunding include sites like kickstarter.com, indiegogo.com and rockethub.com.
In Nigeria, there are no known laws that guide crowdfunding unlike in U.S, Canada, Turkey, United Kingdom and elsewhere in Europe where the practice is heavily guided by legislation. As mentioned earlier, in Nigeria and other parts of Africa, crowdfunding is yet to be fully embraced but a few players are worthy of note. They include 234give.com gogoafrika.com and startcrunch.com.
Gogoafrika.com has recently been under construction and startcrunch.com seems to have been in a lull for a very long time. 234give.com seems to be the most healthy and active of them. In all my searches for platforms that offer crowdfunding, I could only find these 3 which is relatively poor for an economy that is said to be booming rapidly.
It would be important for the government to recognize the potential a platform of this nature possesses, pass legislation on it so that it does not get taken over by elements of shady nature and those benefiting from it do so while maintaining best practices.