Securing funding has become one of the biggest challenges for startups. Investors and funders have many businesses to choose from, which means having a good idea is often not enough.
For founders, the challenge is to show why their business deserves investment, how the money will be used and whether the business has the potential to grow.
Recent data from KPMG shows that African venture capital investment remained cautious in the second quarter of 2026, with investors placing greater focus on more proven startups rather than businesses still at the concept stage.
Show a Real Problem
Funders want to understand what problem the startup is solving.
A strong funding proposal should clearly explain who the customer is, what problem they face and how the business provides a solution.
Instead of focusing only on the product, founders should demonstrate why customers need it and why they would be willing to pay for it.
Build Traction
A startup does not always need millions in revenue to attract funding, but evidence of progress can strengthen its case.
This could include paying customers, sales growth, partnerships, repeat customers, user numbers or successful pilot projects.
Traction gives funders evidence that the business is moving beyond an idea and that there is demand for what it offers.
Know Your Numbers
Founders need to understand their financial position before approaching investors.
They should know how much funding they need, what the money will be used for, current revenue, operating costs and how long the funding is expected to last.
A funding request such as “we need money to grow” is less useful than explaining exactly what the funding will pay for and what the business expects to achieve.
South African funding platforms similarly emphasise providing clear information about the funding amount, business turnover, trading history and intended use of the funds.
Choose the Right Funder
Not every source of funding is suitable for every startup.
Depending on the stage and needs of the business, founders can consider options such as grants, loans, angel investors, venture capital, development finance and strategic partnerships.
South Africa’s government funding policy recognises venture capital as an option for innovative businesses seeking equity finance to commercialise products and expand.
Prepare Before Pitching
A strong pitch should answer basic questions clearly: What does the business do? Who are the customers? How does it make money? Why is the opportunity attractive? How much funding is required? What will the funding achieve?
Founders should also be prepared to explain their risks and how they plan to manage them.
In a competitive funding market, preparation can make the difference between being overlooked and getting a serious conversation with a funder.
For startups, securing funding is not simply about finding someone willing to provide money. It is about demonstrating that the business understands its market, has a realistic plan and can turn capital into sustainable growth.
