Social Innovation
“Don’t be in too much of a rush to get funding”
Lessons from Red Bull Amaphiko Alumnus Zakheni Ngubo
Amaphiko alumnus Zakheni Ngubo has come a long way. A few years back, he founded Syafunda – a mobile learning app that provides video tutorials for high school learners. The self-funded business, which had its full scale launch last July, is now a fully functioning enterprise that’s taken him to the Tech Open Air conference in Berlin last year and will see him at Richard Branson’s private island, Necker, in a few weeks. It wasn’t a smooth journey, though. Here, he shares how he went from bootstrapping his company to attracting an investor:
I had little to no funding in the first few years after founding Syafunda. During the first two years, the bulk of the funding was really just my personal savings and a whole lot of loans. It was difficult, but I still had to find ways to make the business a success. In fact, I got most of my early business infrastructure by offering my skills in return for resources. For example, I didn’t have money to develop my website so I asked a guy if I could do some consultations for his business and he paid me back by developing my website. That’s how Syafunda was developed. The early years were mostly about looking at what people needed and seeing how I could use that to grow the company.
It seemed like an impossible task. Sometimes I look back and ask myself how it all even came together. But now I can honestly say every little interaction was preparing me for funding. The way I see it, the two years that the business was self-funded, allowed me to do market research, build a strong team and refine my business model.
Then, my team and I attended the South African Impact Investing Network conference. We were one of five social enterprises who were chosen to pitch to a room full of potential investors. And while we didn’t win any investors on that particular day, we drew enough attention to make people notice the business.
After the competition, a friend told me that someone had heard about my pitch and was interested in investing [silently] in the business. We did a valuation of the business (which amounted to R12 million) and sold a 25% stake to the funder.
Don’t be in too much of a rush to get funding. Granted, it’s hard to run a business without it, but you should build your business first.
A lot of entrepreneurs make the mistake of thinking once they get funding, that’s their money. That’s not how it works. While the funding’s allowed us to grow the team and access resources we couldn’t previously afford, I haven’t let it get to my head. I’m just concerned with making sure the business keeps growing and can be self-sufficient.
What’s one piece of advice I’d give entrepreneurs? Don’t be in too much of a rush to get funding. Granted, it’s hard to run a business without it, but you should build your business first. There’s nothing worse than letting people in too early. Basically, don’t go out looking for business partners before you have a business.