Technology: A veritable tool that fosters investor-entrepreneur relations
Technology is the application of the right tools in solving problems which are generally our day-to-day activities. By way of globalization, the world has become a small place. While having your physical presence in Lagos, you can transact business real-time with people in Lisbon, Lusaka, New Delhi, and San Francisco.
This development is not limited to e-commerce but also finds application in governance, healthcare, and others including Fundraising.
Technology has aided fundraising activities tremendously. Some of the impacts it has had are discussed in this article.
- Exposure: With technology, businesses get exposed regardless of geographic location and reach. Via website and digital marketing, it has been easy for investors to identify ‘the next big thing’ even without personal knowledge of or introduction to founders.
- Tele-conferencing and presence: While the fundraising process is quite hard, the use of teleconferencing and presence has bridged the gap of traveling and logistics for founders and investors alike. This is a typical case especially when raising ‘overseas money’. With the elimination of physical meetings, time and money are saved with teleconferencing tools such as zoom and Skype.
- Keeping one abreast of development: Typically, investors have key areas/business sectors they fundraise. For instance, some are Fintech investors, while others invest in edutech, health tech and other sectors they have a specialty in. With technology, you can easily have an overview of portfolio companies that have been invested in by would-be investors, reach-out to learn their philosophies and have a whole lot of information.
- Evaluation: With access to comparative startups, it is easy for investors and founders alike to determine facts such as company valuation, projection, and other necessary information even at the pre-revenue stage. Notably, MoneyRemit was able to base its valuation at billions of dollars a few years after takeoff because of comparative valuation across its industry.
- Reporting and monitoring: Investors have no reason to fear in investing in startups across geographical locations with business reporting tools generated in real time. Performance evaluation is processed in real time and business decisions are made quicker.
- Crowdfunding: Unlike institutionalized investing, crowdfunding is a method of fundraising in which so many people can contribute bits of a whole sum. People also get equity shares depending on their investment size. This has been made possible by technology.
originally posted on inveeca.com