Sources of funding for new ventures in Uganda

The presentation gives an overview of the sources of finding for new ventures especially in the context of Uganda

1. Funding New venture in Uganda Presentation by Edward Ssimbwa

2. INTRODUCTION Definition of key terms A venture is defined as an undertaking involving uncertainty as to the outcome, especially a risky one. It can also be defined as a business enterprise or speculation in which something is risked in the hope of profit; a commercial or other speculation: New venture A new venture can be defined as a start-up Stage Newly formed company without significant operating histories are considered. Funding is the act of obtaining or furnishing money or capital for a purchase or a venture.

3. The process for raising venture capital Prepare the appropriate documents (the Business Plan) Develop a targeted list of venture capital firms, Schedule meetings with investors, and Negotiate term sheets and closing documents.

4. Sources of funding for a new venture in uganda In Uganda, most entrepreneurs fund this stage of a company’s development with their funds i.e. personal financing/ financial bootstrapping . Other key funding sources, as discussed below, include Business loans, Friends & family, Angel investors and Venture capitalists. Government programmes

5. Using own funds/ bootstrapping Funding from personal savings is the most common type of funding for small businesses. It involves founding and running a company using  only personal finances or operating revenue . It is a way to finance small businesses by purchasing and using resources at the owner’s expense, without sharing equity or borrowing huge sums of money from banks. The two issues with this type of funding are how much personal savings do you have and ) how much personal savings are you willing to risk?

6. BANK LOANS Banks and Other Credit Institutions offer funding that you must repay over time with interest. T his can come in the form of a personal loan, a traditional business loan, or different loans based on the type of asset you need to purchase (e.g., for equipment, land, or vehicles). The borrower must prove to the lender the likelihood of paying back the bank loans, and meet any requirements they have (e.g., having collateral in some cases). With a bank loan, you do not need to give up equity. However, once again, you will have to pay interest and the principal. In Uganda, Vision Fund offers an asset financing loan product that individuals can access to acquire assets, with Loan amounts of up to Shs. 20 million (first-time borrowers) or Shs. 50 million (for repeat clients). The loan is payable within 24 months and 40% minimum contribution towards the total cost of the asset (in CASH or Kind).

7. Friends and Family A big source of funding for entrepreneurs is friends and family. They can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales). Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens

8. ANGEL INVESTORS Angel Investors or Business Angels (BAs) are private individuals who invest in start-ups and young companies with good growth prospects, in exchange for a share of the company's equity. B As are free to make investment decisions quickly and often specialize in particular industrial sectors or local companies. Many take an active role in the businesses they invest in by advising and mentoring the management. Before you apply for business angel (BA) investment, you should make a shortlist of potential investors you feel would be a good match with your company In Uganda, KAIN and UBAN are some examples of Angel Investors networks

9. Venture capitalists Venture capital (VC) firms play a crucial role in funding startups in Uganda, helping them grow and scale their businesses. VC firms look for startups with high growth potential, innovative solutions, and strong management teams.  They often focus on sectors like fintech, agriculture, healthcare, and technology . Startups/ New ventures in Uganda usually receive funding in stages i.e Seed Funding to help startups develop their product and market fit and Subsequent rounds of funding to scale operations, expand market reach, and enhance product offerings Types of Funding: Equity Financing Debt Financing

10. Government financing Through the government of Uganda's public investment financing, youth, women and low-income earners have been targeted to receive startup capital. In 2019, a presidential initiative aimed at wealth and job creation; - The Presidential Initiative ( Emyooga ) on Wealth and Job Creation ( Emyooga ) was launched in August 2019 as part of the broad government strategy targeting to transform 68% of homesteads from subsistence to market-oriented production with the overall objective of promoting job creation and improving household incomes. NAADS programme ; Input distribution, like in-calf-heifers and piglets for young farmers who would like to venture into diary farming and piggery etc , including provision of start-up feeds.

11. Conclusion Various ways Need to assess the advantages and disadvantages

12. Thank You.