Many African Startups Consider Funding Crucial for Choosing Startup Programs but does it Have to Be so?
As a startup, the new year offers tons of opportunities. From new business strategies to funding rounds, opportunities are everywhere. But one interesting area where opportunities will flow freely are the numerous tech hubs and incubator programs that will hold over the next 12 months.
Many of these programs offer rewards like mentoring, technological access as well as access to a network of experts and investors. But not all of these programs offer funding opportunities for startups.
For African startups, funding is generally the most crucial reason for partaking in these startup programs. But should it be the only reason?
Below I highlight few pros and cons that startups should consider when deciding tech programs to participate in.
Why You Should Participate in Incubator Programs That Promise Funding
Funding is key to every startup anywhere in the world. Regardless of the technology being built, your financial burn rate will decide how long you’ll get to stay in business. So if you are cash strapped, you won’t really accomplish much.
That’s where startup programs offering funding comes to play. There are many of these programs already in existence. They go by various nametags, like accelerator programs, bootcamps, mentorships and incubators.
These programs usually have a timeline for completion, say two weeks, 4 weeks, among others. A few of these programs include: YCombinator, Google Launchpad, CCHub programs, Itanna, among others.
One advantage of these programs is of course the money. The general idea is that during or after the program, participating startups get some funding that helps their operations.
Another advantage of these programs is network access and mentoring. Both of these help startups fine-tune their ideas and get them market ready.
One disadvantage however is that many of these programs are equity seeking. In return for the funding and training, many of these programs want equity in these startups.
Should You Consider Startup Programs That Don’t Promise Funding?
While there are startup programs that offer funding, there are also some that don’t offer any guaranteed funding after the training period. Note though that there are very few startup programs that don’t offer funding prospects.
Many of these are actually fellowships, and one famous example is Jack Ma’s eFounders Fellowship. It offers mentoring and support to startups, but not funding.
However does the lack of funding reduce their merits? The lack of funding definitely reduces the need to attend these programs.
But at the same time, these programs are fully funded, covering the cost of travel and other expenses.
And importantly, these programs promote a close-knit ecosystem of participants that allows them benefit heavily from the program itself.
Importantly, a few organize demo days, allowing these startups to showcase their solutions to potential investors. But that doesn’t guarantee funding still.
In the end, whichever type of program a startup decides to pursue depends on what they really need at any point in time.
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