Raising capital is a universal challenge for entrepreneurs, but in Africa, the journey has its own unique twists. From navigating investor skepticism to battling infrastructure gaps, founders often discover that the process is less about “closing rounds” and more about surviving a marathon of resilience, creativity, and relationship-building.
Here’s what few people will tell you about the realities of raising capital in Africa.
1. It’s More About Relationships Than Pitch Decks
In Silicon Valley, investors may write checks after a few calls and a polished pitch deck. In Africa, it often doesn’t work that way. Investors want to know you personally before committing. Many deals happen because of long-standing trust, introductions through networks, or personal credibility rather than slides or metrics.
- Warm introductions matter more than cold emails.
- Building genuine relationships with local investors can take years.
- Reputation travels fast in small ecosystems.
2. Investors Are More Risk-Averse Than You Think
Africa is often pitched as the “final frontier” of opportunity, but the truth is most investors are cautious. Many have had bad experiences or still view African startups through a lens of risk-first, opportunity-second.
- Expect lengthy due diligence processes.
- Be ready to explain not just growth potential, but also how you’ll mitigate local risks like regulatory changes, currency volatility, or political instability.
- Sometimes, you’ll spend more time de-risking your story than selling your vision.
3. Foreign Capital Still Dominates
While local venture funds and angel networks are growing, foreign capital—especially from Europe and North America—still drives much of Africa’s startup funding. This creates its own set of challenges:
- Foreign investors may not fully understand local market nuances.
- They often benchmark you against global peers, not local realities.
- Raising abroad can require global positioning that doesn’t always align with how you actually operate locally.
4. Infrastructure (and Regulation) Can Make or Break Deals
Investors don’t just evaluate your business model—they evaluate the ecosystem around it. Payment bottlenecks, internet reliability, logistics, and bureaucracy all influence investor confidence.
- A scalable fintech might stall because mobile money integrations are fragmented.
- A promising agritech solution may be slowed down by poor rural connectivity.
- Regulations can change overnight, shifting entire industries.
Being upfront about how you’ll work around infrastructure or policy challenges can increase credibility.
5. You’ll Spend More Time Fundraising Than Building
Founders in Africa often report that raising capital can consume 6 to 12 months or more—sometimes longer than in mature markets. This extended cycle can drain energy and distract from execution.
- Be prepared to bootstrap for longer.
- Consider creative financing options (grants, revenue-based financing, corporate partnerships).
- Build a resilient team that can keep operations steady while fundraising drags on.
6. Not All Capital Is “Smart Capital”
In the rush to secure funding, many founders overlook the importance of aligned investors. Some investors may push for unrealistic growth timelines, unfamiliar with the slower adoption curves in many African markets. Others may lack the networks or insights to actually support your scale.
- Choose investors who understand local realities.
- Look for partners who can open doors to markets, talent, or regulators—not just write checks.
7. Storytelling Is as Critical as Metrics
Yes, investors want traction. But in Africa, many early-stage startups operate in sectors where “hockey stick growth” isn’t immediate. The difference-maker is often the founder’s ability to tell a compelling, authentic story that connects market pain points with a credible vision for the future.
8. Grants and Development Funding Are a Double-Edged Sword
Africa has no shortage of grant opportunities and impact-driven capital. While this can provide early runway, it can also skew incentives if founders build for grants rather than sustainable businesses. Smart founders use grants strategically—without letting them define their entire roadmap.
9. Raising Capital Is Just the Beginning
Securing funding is not the finish line—it’s the starting point of a new set of challenges. Investors will expect rigorous reporting, governance structures, and accountability. The pressure to deliver quarterly numbers can be intense, especially in volatile markets.
Grit & Growth | Raising Capital in Africa: It’s Not Just About the Money
Raising capital in Africa is not just about money—it’s about navigating an intricate web of relationships, perceptions, and structural challenges. Founders who succeed often combine grit with storytelling, resilience with flexibility, and a long-term view with short-term adaptability.
The best-kept secret? The process itself forces founders to become sharper, more resourceful, and more resilient leaders. And in Africa, that’s often the biggest competitive edge you can have.