Getting a start-up running can be particularly tough, especially on your pockets.

Fundraising the old-fashioned way – asking for loans from friends and family – sometimes just won’t cut it. Here are 10 alternatives you can explore.

1. Run raffles

A raffle is a fundraising idea that’s effective under almost any circumstance – you just have to sell tickets and offer your financiers a gift they can actually use. There are many different types of raffles you could hold, including a straight-up raffle, reverse raffle where the buyer of the last ticket wins the grand prize, or a 50/50 raffle where the proceeds are split between your start-up and the ticket winner or a charity of their choice.

2. Peer-to-peer microfinance loans

You can apply for an interest-free microfinance business loan from peer-to-peer lender Kiva. Kiva works with local microfinance institutions and offers small loans to entrepreneurs across Africa at no interest to help small businesses hit their stride. Another thriving peer-to-peer lending network in Kenya is Zidisha.

3. Bitcoin-based small business loans

BitBond is the first global peer-to-peer lender that leverages on the digital currency Bitcoin. BitBond allows borrowers across the globe to apply for a Bitcoin-based small business loan. However, local businesses can apply to receive the loan in local currency that’s equivalent to the Bitcoin amount that’s being borrowed. Online merchants are the favoured borrowers on BitBond’s platform. However, any start-up that’s confident it can repay the small business loan is encouraged to apply.

4. Utilise crowdfunding

GoFundMe remains the most popular crowdfunding website around. You simply log in, create a convincing proposal, and within a short time, people from all walks of life can contribute to your quest. Similar platforms include YouCaring, Indiegogo, Kickstarter, Fundrzr and M-Changa. Compare the differences between these platforms and decide what’s most relevant to you.

5. Discount fundraising cards

Discount cards take advantage of the fact that people love discounts, and if they can get them for places they like shopping in, they’re going to be interested. Discount cards are good fundraisers because they offer your financiers great value. You basically go out and get 10 or 12 local merchants to agree to advertise for free on the back of a discount card you’re creating, and offer customers a discount or offer on their products. You get the cards printed and then sell them for about Sh1,000 each. You make money, the merchants get traffic and the cardholder gets some great deals.

6. Find an angel investor

An angel investor is someone who provides financial support to small businesses and start-ups. The capital they provide can be in the form of a one-time injection of seed money or ongoing support over a predetermined period of time. Ordinarily, angel investors look for a business plan that clearly demonstrates how your business will work. They want to be convinced that you’ll be able to implement your plan. The main advantage of using angel investors to raise capital is that they tend to be more patient than shylocks and banks, and offer more than just cash. Angel investors you can tap include and the Savannah Fund.

7. Join a chama

Chamas are generally financial groups formed by people who share a common interest. You can join a reputable chama in your neighbourhood to start saving. Chamas have many benefits, including being eligible for loans like the Youth Fund and Uwezo Fund. You also get to benefit from the experience of your chama members.

8. Enter a business plan competition

Local business plan competitions offer the opportunity for quick cash, and sometimes free or discounted services from advisors (law firms, accountants and so on) and vendors.  Business plan competitions also provide opportunities to test your ideas, receive advice and network. Jitihada, a national initiative of the Micro Small and Medium Enterprises (MSME) Competitiveness Project of the Ministry of Industrialisation is a good starting place. It seeks to identify innovative business ideas that can be nurtured into viable enterprises. The top entrepreneur will receive Sh1 million. The deadline for applications is September 23.

9. Asset-based financing

Asset-based financing is ideal for a business that’s accumulated assets that it can off-set for financing, such as property or stock. You can approach a lender and convince them to finance you with, for instance, 80 per cent of the value of your current stock. The main advantage of asset-based financing is that the due diligence process tends to be faster than with traditional loans, and you can access funding cheaper.

10. Find a venture capitalist

Venture capitalists can offer your company a loan and bring on board invaluable mentorship and a great network of contacts. You’ll, however, need to prove you have a unique business idea and can deliver on your promise. Most venture capitalists will also require equity in your business – just be careful not to give up too much control. Examples of venture capital organisations that works with SMEs in Kenya and across Africa are the Spark Venture Fund,, and



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