Dimeji Falana CEO of Edves teaches the art of fundraising
Home Business Startup Why every Entrepreneur must Learn the Art of Fundraising now
Startup - July 26, 2021

Why every Entrepreneur must Learn the Art of Fundraising now

While bootstrapping is encouraged, the truth remains that every business will, at some point, require external funding to scale. This is exactly why many African startups are scrambling to woo external investors. While a lot of them have been successful in this regard having raised $1.19 billion in H1 2021, others haven’t been quite as lucky. The reason is simple –fundraising is not as easy as the announcements make it seem. After all, venture capitalists do not just go around dolling out cash to every startup they see. There is a whole lot involved in the art of fundraising. It is, therefore, important for every entrepreneur to be aware of this.

We Spoke to an Expert who Knows the Art of Fundraising

In a recent interview with Business Elites Africa, Dimeji Falana (Co-founder and CEO of Nigerian edtech startup Edves) spoke about some of the biggest mistakes he made when he first started out as an entrepreneur. According to him, he and his business partner focused mainly on building the product whilst paying no attention to fundraising. They weren’t asking important questions such as ‘what do investors want to see to in us?’. In the same vein, they did not bother with courting investors so as to raise money for expansion purposes. Instead, they focused mainly on solving the problem they were in market to solve.

While Edves did gain a lot of traction on its own, something important was still missing. At this point, the company (which automates records and operations for schools), already have a clientele base of about 60 schools. Around 2015, Dimeji and his co-founder attended their very first accelerator programme and some of the other participants at the programme thought they were too good to be true. He recalled someone saying this to him “you guys look really experienced already. The traction you guys have put forward is really crazy. How did you get this far without any form of external investments?”.

It was at that point that they realised they needed to start wooing investors. And so, by 2016, they seriously started looking for how to raise capital. They began by participating in more competitions, and had won a $50, 000 grant from Switzerland. And then eventually in 2018, the company secured a pre-seed round. There has been more fundraising since then.

Dimeji Shares important Lessons Based on his Experience so far in Business

There are numerous theories that talk about what investors typically look out for when deciding which startups to invest in. One of these theories, which is generally accepted, posits that investors invest in founders, not necessarily the companies. These founders must be good at what they do and possess vast industry knowledge, a trait that will enable them to turn around the fortunes of their companies and ensure profitability. So, investors basically look out for such founders and invest in them.

Meanwhile, there has been a recent trend whereby venture capital (VC) firms now have their own tailor-made investment thesis based on different factors such as demography and location. Dimeji Falana called this Investment Thesis. According to Dimeji Falana, there have been instances whereby some promising fintech startups in Kenya were denied investment opportunities simply because the investor’s Investment Thesis prohibits them from investing anywhere else other than Nigeria. Another good example is when an investor refuses to invest in a really promising edtech startup, simply because its Investment Thesis only recommends that it invests healthtech startups.

Speaking further, Dimeji Falana said: “there is another trend around investment that I have seen in recent years. Sometimes, investors will only invest in you if you attend certain accelerator programmes. I won’t mention any names. Also, some investors will only invest in you if you have a foreign degree from European or North American universities. Other investors look out for entrepreneurs who have successfully exited a company because they want to put money in whatever such entrepreneurs plan to do next…”


Generally, investors want to invest money in entrepreneurs who are capable of successfully running a company from scratch to a certain stage before exit. The products these founders come up with must be bankable. This is because no investor wants to put money in a business that will not yield returns. That said, it is important to understand the intricacies and nuances of fundraising. Doing this will make it easier to seal you next funding round.

EDITOR’S NOTE: Watch out for my full interview with Dimeji Falana in our upcoming 40 under 40 magazine edition coming out next month.

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