How to Raise Money to Finance a Business

February 6, 2021
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For a long time, the talk around Investment and Business has been on creating more streams of income and of being able to make investments that create and enable one to live on passive income. The economic ruins that many people suffer as a result of the effects of the pandemic brought the subject to the fore again and exacerbated the need to act fast. However, starting a business is not a walk in the park; it is fraught with many challenges and is a matter that needs to be pursued with utmost diligence.

To equip his friends on this journey, I was recently approached by a former classmate to talk to our friends on the subject. ‘You are a Banker,’ he said ‘speak to us about how to raise cash to finance our business’.

So for the following 2 weeks, I thought about the matter & agreed to discuss with them about ‘some of the intricacies & sources of funding for a business’. I am sure that you are interested in this matter too so I am going to replicate my presentation here.


Each time I hear about money in this context, the ABBA song, ‘Money, Money, Money’ comes to my mind. They sang:

‘Money, money, money
Must be funny
In the rich man’s world
Money, money, money
Always sunny
In the rich man’s world
Aha aha
All the things I could do
If I had a little money’

Indeed, all the things we could do, if we had a little more money!

Why do we need Money?

The main reason we need money in a business venture is to finance the acquisition of the factors of production. These include land and everything on it, labor, machinery. Money is also used to pay for capital in the form of interests; pay for ideas, etc.

Before you begin to stress for money, there are a few pertinent questions you need to ask & answer:

  • Why do I need money?
  • What do I specifically need it for?
  • Do I have the capacity to utilize the cash?
  • Have I put mechanisms in place to effectively utilize the cash?
  • How do I monitor and evaluate effective utilization of the funds


However, before we go into all the various ways you can raise money to support and grow your business, it is important to note that money is not the most important factor in the success of a business.

Before you think about raising cash, raise other things & perhaps make raising money unnecessary

Raise your Knowledge

Before you think about raising cash, raise your Knowledge:

A. Of the nature of problem & the solution you are providing

What is the nature and purpose of your business? You need to clearly understand the nature of the problems you are trying to solve and raise your knowledge of the solution you are proposing.  Is the solution viable? You can not easily become rich by looking for money, same as you can not find happiness by looking for it. They both are by-products of other things. For Money, it comes from solving problems; the more complex the problem the better. So what problems are you solving? The more people you provide the solution to, who are willing to pay, the richer you become. So raise your knowledge of the problems and the solutions you propose.

B. Of the business

Now that you have gained clarity about the business idea you need to be sure of other things:

  • What is the business model you have chosen?
  • Is it unique?
  • Do you have the ecosystem to make it work?
  • What is the business model built around?
  • Are the infrastructures in place?

C. Of how the world works (factors of production & in the area of your finance issues)

How the world works! You need to understand the dynamics in the area you have chosen to play in. You need to understand the value chain. For example, a Bread Seller must understand how Bread is made, going far back to how materials are sourced to production until it gets to him/her, and although he/she may not be an expert, he may also learn the various uses of bread as food and raw material. This knowledge helps the businessperson to easily take advantage of opportunities that may come to integrate vertically or horizontally or both.

On raising your knowledge of the business you need to ask and answer the following 2 questions:

What do I know about this business?

Have I & other people tested my model and am I sure it is ok?

Raise Yourself – Qualities & Values

Before you think about raising cash, raise yourself – your Qualities & Values

Raise your Qualities as a dependable person! Can you be trusted? When the chips are down, are you trustworthy or you are a crook. Remember, ‘It is a better compliment to be trusted than to be loved’.  ‘Everyone acts like the focus is on the business, but in fact, it is more on your potential as a founder’.  

Before you think about raising cash to finance your business, raise yourself as a dependable, trustworthy person! Become known as a hard-working, serious-minded person because soon enough you will find out, albeit the hard way that people do not like lazy people. Please, to avoid ‘had I known’ when you fail to raise cash, raise your reputation as a hard worker.

Let the values you live by be known by all and be consistent in upholding good morals. ‘Where we dey go no far, but where we dey branch na im plenty’ (‘Our destination is not far off & we can easily get there, but our stops and detours are many’). What are your distractions? For many people it is sex. Are you easily distracted by sex, or you would casually sacrifice even the sacred to get a taste of the red? “Sex desire is the most powerful of human desires. So strong and impelling is the desire for sexual contact that men freely run the risk of life and reputation to indulge it.” Do these words by Napoleon Hill describe you? You need to raise your values in this regard before you begin to pursue that funding!

Raise Your Health and Family

Raise your health before that attempt to raise money! Invest in and eat good food, have adequate rest, manage anxiety, and have self-discipline. Engage in everything in moderation, everything!

Raise your Family & the quality of life there.

Ensure that you have made good provisions for your family to thrive.

Consider the following before you think about raising money:

  • If I asked 20 people who know me best, what will their response be about the kind of person I am?
  • How many of these people will allow me buy from them on credit?
  • What does my spouse think of me?

Raise Your Mindset

Before you think about raising cash, raise your mindset.

Raise Your mindset/belief about yourself, the world, and other critical relationships.

When we greet people and make a gesture such as a wave of the hand(s), thumbs up, a raised fist, clasped hands, or smile, they often reciprocate by making that same gesture. If you have not observed that you may try it out now. What we give to and believe about the world is often what we get back from it. Before you think about raising money you need to raise your mindset about the world. If you believe the world is beautiful, you see beauty. What you are looking for in truth and earnestness is looking for you too- ‘If you search for good, you will find favor: but if you search for evil, it will find you!’ – Prov. 11:27 NLT

So the big question is, what is your general mental attitude? Are you positive or negative?

  • What is your behavioral pattern
    • Friendly
    • Complaining
    • Grumpy
    • Approacheable
    • Pleasing personality

Remember “The only limitation is that which one sets up in one’s own mind.” ― Napoleon Hill  

To help you raise your mindset and build a positive image of yourself you must resolve some critical issues:

Who am I & why am I on Earth?

What good can I do?

Is a change of my circumstances possible?

Can I change things?

How do I view failure?

Raise your Network

Before you think about raising cash, raise your network

What good are the friends for whom we use the saying ‘With friends like you who needs enemies?’

Man’s brain may be compared to an electric battery…a group of electric batteries will provide more energy than a single battery. – Napoleon Hill

Before you think of raising money to finance your business, you need to raise the quality of your network.

Why do we need a top notch network, you may ask? Our friends help us to:

  • Generate business ideas
  • Screen your ideas
  • Provide guidance & Support you emotionally & otherwise
  • Bring in technical competency
  • Bring in funds
  • Help you manage failure & successes
  • Help you expand your business
  • Help shape us in all respect

Who are your friends currently, are they doing these things for you?

We need people who challenge us; who help us to be better academically, spiritually, etc. You need to have in your circle people you aspire to be like.

What are you doing with your friends?

Of people you hang out with, how many have brought ideas on how to make money or improve yourselves? Abi, na beer, beer, beer, Nkwobi, Isi-Ewu, men, women, good time, and gossip all the time?

Some critical questions to consider:

Have I mapped my critical relationships?

Am I consciously growing my network? Or the people in your life are those Chance filled you with?

Do you roll with people who appreciate your vision?

Do you have a close friend who has made a mockery of your ideas?

Do you need think you need to go ‘Friend Shopping’?

Raise Your Strategy & Structure

Before you think about raising cash, raise your Strategy & Structure.

Until a man selects a DEFINITE PURPOSE IN LIFE, he dissipates his energies & spreads his thoughts over so many subjects & in so many different directions that they lead not to power, but to indecision & weakness. – Napoleon Hill

Does your personal strategy need a nudge? You ought to be clear where you are and where you are going before you begin to contemplate fundraising. What is your purpose in life and in business? Have you clearly crafted your Vision & Mission Statements – Your Why? What do you want to achieve in the different parts of your life? How do you want to go about achieving them?  

You also need to be clear about the business. Do you have a Business Plan? You need to clarify & document the business idea, state your expectation & needs. And regarding the funding, you need to be clear about how much you need and for what specifically.

Finally, you need to make decisions on your structure. What kind of Business Structure & ownership do you want? Is it going to be a sole proprietorship, partnership, or LLC?

Like bones give form to a body, so too a structure gives form to a business. Before you go out looking for money, be sure to raise your personal strategy, business documentation, and your structure.

Raise Your Compliance

Before you think about raising cash, raise your compliance

Ensure that you have met all the prerequisite legal requirement for carrying out business in the area you are interested in. The law can clamp up on you and make a mess of everything if evasion is your strategy. Are there Government registrations? Business laws to comply to? Is the business lawful? What are the standard documentations needed as requirements to access capital? Have you put in place a Governance code? How will you manage risks?


Before you think about raising cash, Start!!!

“Start where you are, use what you have, do what you can” – Arthur Ashe

Please start. Start small. Begin to do the things that you can do without money. Consider this:

All other factors being equal, who will you help in a business venture?

The One, who has started, utilized all his resources & has reached his wit’s end, or the man who has refused to use any of the resources that he has but wants you to pitch in yours so that he starts in a grand way?

The people who can help you achieve your life goals will not do so until they are sure you will not waste their resources and we can never know what help is available until we start the journey of actualizing our goals in life.

Many who believe in God attest to the fact that He acts in the same way. You got to start (FIRST) and then help will come, not the other way round.

Do not wait; the time will never be “just right.” Start where you stand & work with whatever tools you may have. – Napoleon Hill

What can I do ‘Now’ with what I have? Unfortunately, some people let envisaged obstacles stop them. But take heed of the admonition below:

Don’t let all the challenges and envisaged obstacles deter you. Remember, what we see as obstacles from afar may actually be huge stepping stones when we get near them. We may often plan to scale the mountain, only to find a detour around it. I have found out from all I have encountered and overcome that every problem has its solutions built into it and you will never unlock this power until you start – that is a secret of life – the inherent power in starting.

Having raised all the aforementioned, Now you are Ready to Raise Cash to Fund the Business.


Do You really need cash? Have you started anything yet?

Some of the various ways to raise cash to fund your business are as follows:

Use credit – Business Strategy

  • Get paid before you pay your Suppliers:  You may for example, negotiate a 30 days payment Contract with your buyers and then agree on a 45 days payment with your suppliers. You get some good lead time from your payment date and the date you agree to pay your suppliers.
  • Product Pre-sale: Sell your products before you launch them. This is a great way to improve your cash flow and prepare yourself for full commercialization of the product or service.

Business Idea you may try out: Set up an online store, enter an agreement with a Brick & Mortar Store, negotiate prices on a wholesale basis, Sell products online & through other channels, Pick up, Deliver (you may get a Delivery Company to offer service), get paid & then pay the Store.

Personal Sources:

What are you willing to sacrifice for your big idea?

  • Savings: You got to break the piggy bank to finance your idea.
  • Sell Assets: Don’t let the assets lie fallow when you can sell to finance the idea. This is a tough choice but as soon as your cash flow improves, you can buy back the assets.
  • Targeted Investments: You may investment that will bring in the yield that can finance your business
  • Mortgage: If you have your own home, you may take up one or 2 mortgages to hit the business road.
  • Credit Cards: 
    • Use a credit card and keep to the minimum payment
  • Limit Expenses
    • Use free software instead of buying; Save on utilities; Multiple uses of space instead of renting – Park that car outside and use the Garage as an office.

Cash from personal connections

  • Friends & Relatives: After personal sources, this is the most viable means to raise money for a business. The funding can come in various forms such as:
    • Loans (you must here consider Interest & Term)
    • Equity (to become part-owner of your business)
    • Percentage of profits (to receive royalty payment in the form of profit-sharing)
    • Purchase Agreements/Understanding (an understanding that they will buy from you either as pre- or post-launch)
  • Partnerships
    • Investments (Like equity, the contribution could be in the form of an investment or the person can become a partner)
  • Cooperatives: You may get funding from a cooperative you belong to.
  • Angel investor: These are people with surplus cash and a keen interest to invest in startups. Often they also offer mentoring or advice alongside capital. Companies that have benefited from Angel Investors include many prominent companies including Google, Yahoo, and Alibaba

Venture Capitalists

VC Funds are professionally managed funds that invest in companies. They also offer expertise, mentorship, and management controls in addition to funds. To buttress the need for you to start, states that VCs do not normally fund startups from the onset. Rather, they seek to target firms that are at the stage where they are looking to commercialize their idea. The VC fund will buy a stake in these firms, nurture their growth and look to cash out with a substantial return on investment (ROI).


The  easiest form of funding you can get from a Bank will be credit such as Overdraft, Salary Advance, etc

You can also secure a business loan which could be Secured – there is an asset to collateralize the loan & Unsecured – no collateral required for the loan.

You may also secure Letters of Credits from your Bank for international trade.

Development Bank Loans

Other sources of funding are Development Finance Banks that target specific areas of the economy. It is advised to look through the websites of Development Banks in your country and region to see what development finance loans and grants may be available to you. For example, the Central Bank of Nigeria has over 32 Development Finance Interventions covering Agriculture, Airline, Creative, Export, Health, Information Technology, Manufacturing, MSMEs, and Power. You may visit their website or local offices to get more information.


Governments often have grants and loans for programs in all sectors of the economy. You will find these programs under the Ministry of Finance, National Planning, and the Presidency Committees.

Other sources of funding are Development Partners such as USAID, UKAID, DFID, and many others. If your business is in their thematic areas which are very broad, then you stand a great chance of getting an award to work in the value chain of the intervention.

Crowdfunding defines this as “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”

Crowdfunding has Investment and Non-Investment models. The investment model involves receiving money where the Contributors get shares in the company in the form of Equity or are repaid – Lending (debt). In the Non-Investment model, the contributions come in the form of donations & rewards. Popular platforms for crowdfunding include Indiegogo, Kickstarter, and Go fund me.

Non-Internet based crowdfunding may come through Churches & other Religious Organizations and Investment Clubs.

Other Funding Routes

  • Initial Coin Offering: An initial coin offering (ICO) – a token sale, is a type of crowdfunding method for blockchain projects. Companies can raise funds for their projects by offering investors a token or a cryptocurrency in exchange for fiat money or major digital assets such as Bitcoin (BTC) and Ether (ETH) according to Investopedia. It adds that ‘ICOs are somewhat similar to traditional crowdfunding methods such as an initial public offering (IPO) which allows investors to acquire shares of a publicly listed company’.
  • Association with a complementary Company (Ecosystem synergy) – You can here position yourself around operators offering complementary products and get fundings from them as this would help their products to sell.
  • Merger: You can also combine your business with another business with the advantage you lack.
  • Acquisition: In this, you may enter an agreement to become part of another business by offering your business idea and expertise.



  • You may not need to raise cash if you raise a few basic things in your life & business:
    • Knowledge of the business around your idea
    • Personal Qualities, Attributes & Values
    • Your Mindset
    • Network
    • Your personal and Business Strategy
    • The Structure of your Business
    • Your Compliance with the Laws of the Land
  • If you must need money, then you will have to revert to:
  • Personal sources
  • Friends & Family
  • Lenders
  • Grants
  • Business Strategy
  • Venture Capitalists
  • Crowd Funding, etc

Good Speed to you

Thank You

Related Article: Start Now on your Goals – Part 1

References and image credits:,have%20access%20to%20equities%20markets;;

Man looking at money:

Head of knowledge:




Raising Dollar Sign:

Piggy Bank: