New program helps startups become investor-ready

A change in mindset is cited as the main challenge in transforming a startup into a bankable entity with an investor base and profitability.

The Transforming Business Network (TBN), a global entity that nurtures early- and growth-stage businesses into bankable and investor-ready entities, said its corporate solutions address environmental and social issues.

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

The company noted that many businesses are not investor-ready due to lack of strategy, right structure, systems and management team. To address this, the company runs a six-month accelerator program to make businesses investor-ready by building character and helping them develop strategies.

In order to make startups more profitable and profitable, the three-year-old accelerator program has employed at least one person earning about Sh5.2 million. In terms of funding, lack of correct legal documents, structure and processes are some of the challenges that hinder the growth of startups.

“Sometimes they aim too high, and sometimes they aim not high enough,” he said.

Statistics show that most startups fail due to lack of funding before their second anniversary. Someone on the forum pointed out that most businesses fail because of lack of funding, so they spend more time looking for funding instead of growing the business.

“Drip-feed funding is not the right way to build businesses, we need to provide adequate funding for these businesses,” said Jacob Zikusooka, TBN’s Africa regional director. He said the challenges of running a business in Africa are huge, so more capital and talent are needed to create jobs. “For businesses, the most critical issue is not taxation, but more stability. We need political, economic and monetary stability. Instability is not good for investors,” he pointed out.

Speaking at the 4th East African Impact Investing Summit, Chikusuka said their goal is to influence and change the way people think about capital mobilization.

He said startups need to understand their business and not just seek funding. “My challenge to businesses when they seek funding is to think beyond basic needs and family. Your business offers the opportunity to support more people, it can scale and create wealth for an entire generation,” Zikusooka said.

TBN believes that a trustworthy business is one that is profitable and scalable. It not only meets basic needs but also has money in the bank account. Zikusooka said that businesses that grow, scale and employ people are resilient, so the accelerator program sets a three-year benchmark for businesses.

“One of the challenges we face as investors is a change in mindset. Many businesses start by accident. We don’t have a scientific basis for doing business. The problem in Africa is that challenges come with it because as the business grows, people start facing problems they didn’t anticipate,” Zikusooka said.

He advises entrepreneurs to get basic training before starting a business. “Running a business requires more than just passion. We recommend you to make a plan and connect with other entrepreneurs,” he said. An unpredictable tax environment and lack of operating funds are some of the challenges faced by start-ups.

Dr Ankuku, a businesswoman who runs a clinic in Machakos and a beneficiary of the TBN Accelerator Programme, said she sought TBN services because she needed to know how to provide quality and affordable orthopaedic surgery without compromising on quality.