Funding Entrepreneurial Idea

EDS Lecture Omega Semester 2022/2023 Session

Covenant University
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Outline
1. Introduction to Funding Entrepreneurship Idea

▪ Definition
▪ Reason Start Up fails

2. Types of Business Funding

▪ Bootstrapping
▪ Friends and Family
▪ Bank Financing
▪ Crowdfunding
▪ Business Angel
▪ Asset Based Lending etc

3. Mutual funds

▪ Introducing Money Market Fund

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Introduction to Entrepreneurship Funding

The application and adoption of financial

tools, techniques and principles to the
planning, funding, operations, and
valuation of entrepreneurial idea.(Leach &
Melicher, 2019)

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Investment Options

Among the main causes of such

failure is FUNDING.

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Types Of Funding
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Sources of Business Funding

Development Start-Up Early Growth Rapid Growth Exit

Bootstrapping(Personal Saving) Venture Capital
A form of private Government Development/Seed
equity and Financing/Grant
a type of financing Stage that investors
Friends and Family These can take the Angel
Equipment Investor Leasing
So,
provide you've hadform
to startup
Entrepreneur(Personal of
acompanies
greatBank
taxidea incentives,
Start-Up
for
anda small businesssubsidies,
Savings)/Bootstrapping
Financing
grants,
' congratulations!
businesses that are or
Angel Investors A lease
You're is officially
ansomeagreementkind
at the ofwhereby
infrastructural
Early
seed Rapid the Now
Growth
stage. Growth lessor
support
you(owner
need of
to equipment)
plant that
believed Loans to have
from long-term
banks,Initial
Friends growth
microfinance,online
Public
and potential.
Offer(IPO)
Family Venture
loans etc capital
Government Financing/Grant Established
convey
This isto
business when business
theseedlessee
the
your professionals
(user
company's
company
and Asset
start oftolaunches.
equipment)
cash
Based
nurture with
flow highthe
itbegins
Lender In
so thisnet
right
that worths
toyouuse
toit increase
step, can who
grow the
work are
asset
rapidly.
into ona
generally
Financing
An initial comes
your public from
company offeringwell-off
by (IPO) investors,
scraping is together
where investment
a any
company’s banks,
personal stock and
funds (its
for anbusiness
Because
development
Your Asset-based looking
agreed the tobecome
period
company
components,
has
lending invest
ofsuccessful
time,
is in promising
Pros
suchin
growing,
routine,
the
Public return
as
business
Debt this
putting
and
business companies
foris a
your
of payment
when
a team a
confidence
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money series
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and
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grown.
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Asking other
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them
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funding
secured helping
by may
manage to
collateral the
build with
workload
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It's
Retain here that
comes
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toobligations, you ask
You’re yourself:Does
as technical
cards,
not or
investment.
giving up this
managerialany concept,
equityexpertise
to product
a third or
party idea
Bank Financing to
By you isthe
acquiring public,
often
further, a
another
and
usually
good
they first
aren’t
company,
your
through
step
position debt
Pros before
a
Pros a
orthe
smallersecurities
incapitalevengetting loss
company
industry
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external
ofistoequity
can like
funding
increase
established.
the
businesses
fill a need in the borrow
market? money Pros
or
Pros in order fund their
the size
They
Trade understand
credit of its
is a Nigeria
operations and
business-to-business
business
Affordable and
means Stock benefit
take
Cons of Exchange
a from
long-term
acquiring(B2B) the (NGX).
economies
agreement
view,
equipment andinmust of
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which are
Asset Based Lender VC Will itAsset-based
operations
invest be foracceptedgrowloans
orequity thethe
in
in the are
business. easier
market?
company.
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This quicker
money
means tothat,
borrowed obtain unlike than be
small
Cana customer
The
Bewon’t willing
equipment can
Time-Consuming: toachieved
purchase
take
serves on asthrough
the
goods Cons
Pros
risk Pros the
without
of
security.,hence:no
Grants, new
in are purchase.
paying
opportunities
particular, cash
need
haveor up
for front,
collateral
involved,
Equipment Leasing You
repaid
How
business do have
according
I and
establish unsecured
extensive
toathe
personal debt
business
loans, loans
loans and
and
financing
structure?
there lines
monthly of
agreement
no credit
payments
regular that
terms
payments bog
and fora
Interest:
competitive Setting
andYour debt
the
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means
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at
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build
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being
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date
lot of forcansale.
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Will this ideadrag must
yield onmeyourbe
any
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you with
profits?
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growth down the
to
down interest.
make.
Trade Credit Since the lessee is not the owner
attention. It a means Cons to
Cons
get of thethe
large road.
funds.
asset, he cannot make
Cons
Public Debt Theyanyrequire
Obligations: changes a loss
to the
Accepting of asset.
Forfeiture complete
thisof InCons
kind thecontrol
of purchase
collateral help and
incasemay aofshare
come
of an
default of the
asset,
with theprofits
strings buyer
Founders that aren’t
Amaka performing
might Cons Cons can
dissapoint lose their business. If
attached. can make alterations as part-owners
or modify the asset according to his
Initial Public Offer(IPO) foundersYou aren’tmay
what be
engaging expected
happensFounders inwhen to stay
behavior yourup
give
within
that
funds arun
certain
maximizes
control
city or
out shareholder
county foror a certain number requirements.
of years orrecklessly
hire X-number of
Acquisition, LBO, MBO value are using company funds for personal use
employees. while neglecting the business, they’re often let go

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Crowdfunding

Crowdfunding
engaging the crowd to co-fund
projects and startup ventures.
Funding can be provided by tens,
hundreds or thousands of individual
investors, as well as institutional
investors and their conduits.

crowdfunding can be just as valuable

for established brands and companies
that have been around for years. Such
was the deal with the Hard Rock Hotel
in Palm Springs that pooled in 85
investors, for $1.5 million.(Forbes,
2022)

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Did you know? N5,000.00 compounded quarterly at 10% p.a. for 10 years
Start Bootstrapping with Mutual Funds
Year Yearly Yearly Interest Total Total Balance
Deposits Deposits Interest

0 5,000.00 – 5,000.00 – 5,000.00

1 60,000.00 3,325.86 65,000.00 3,325.86 6,8325.86

2 66,000.00 10,180.58 131,000.00 13,506.45 144,506.45

3 72,600.00 18,397.86 203,600.00 31,904.31 235,504.31

4 79,860.00 28,184.23 60,088.54 343,548.54

5 87,846.00 39,774.20 371,306.00 99,862.74 471,168.74

6 96,630.60 53,433.77 467,936.60 153,296.51 621,233.11

7 106,293.72 69,464.42 574,230.32 222,760.93 796,991.25

8 116,923.08 88,207.62 691,153.40 310,968.55 1,002,121.9

9 128,615.40 110,049.80 819,768.80 421,018.35 1,240,787.1

10 141,477.00 135,427.99 961,245.80 556,446.35 1,517,692.1

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Money Market Fund

Money Market Fund
Investment Objective- The Fund seeks to achieve a high level of income from investments in
short term securities that is consistent with prudent investment management principles,
the preservation of capital and maintenance of liquidity.

Investor Profile- The fund is ideal for investors with low-risk appetite looking to maximize
their current level of interest income from short duration securities. It is also suitable for
investors that seek safety and preservation of capital value; wish to reduce concentration
risk and benefit from diversification and professional management.

Key Facts Asset Allocation

Nav per share ₦100 22.85%

Domiciled Fund Nigeria Open TREASURY BILLS

10.00%
Type Fund Size Ended FIXED DEPOSIT

(Mil) Fund ₦13,481.76 FINNOTES

9.09%
Inception 10/02/2017 COMMERCIAL PAPER

Minimum Subscription ₦5,000 58.06%

Minimum Holding Period 30 Days

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ContactDetails

S/No Name Email Address Phone Number Affiliate

1 Ismail Olufowobi [email protected] 08032231912 EDC FM

2 George Iwuagwu [email protected] 08039104910 EDC FM

3 Jemimah Ugiagbe [email protected] 0708 1368315 EDC FM

4 Adeoti Akinyemi [email protected] 08035645786 EDC FM

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Thank You

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