By Yinka Kolawole
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 loans, family and friends don’t believe in the ideas enough to lend you the money and even if you sold your belongings to raise the money, you are barely able to scrape enough for what you need.
The frustration has led many to throw in the towel and settle for paid employment.
The more viable option for many would-be entrepreneurs is usually to save from their earnings. However in most cases unforeseen circumstances have prompted many to spend from these savings leading to abandoning their dream of starting their own business.
Many just wait patiently hoping someday something turns up. Few, if any, have actually heard of crowdfunding, and the opportunities it provides for entrepreneurs.
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.
It 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. Though crowdfunding is yet to be fully embraced in Nigeria and other parts of Africa, there are a few players 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. This is relatively poor for an economy that is said to be booming rapidly.
It is important for government to recognise 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.