In the world of business, one of the factors that determine the success of a venture is the type of funding available. Regarded as the fuel that powers a business, funding is one of the biggest challenges faced by entrepreneurs looking to start their own businesses. Without it, an entrepreneur with a great idea will not be able to get his or her business going.
So, one may ask, what is the best way out for Ghanaian businesses? How best can local entrepreneurs fund their ideas? Is it through personal savings, angel investing, venture capital, bank loans, crowd funding or what?
One company that has answers to the above questions is Quick Angels Limited, an indigenous angel investor.
“Most Ghanaians have been taught and have grown up to know that the only way to get money into their businesses is to go for a loan, so everyone in Ghana is looking for a loan to start their business. They don't know that there's an alternative to going in for a loan,” says Richard Nii Armah Quaye, Chief Executive Officer of Quick Angels Limited.
“At Quick Angels, we have an alternative to the problem of looking for loans. As the country's first formal and institutionalised Angel Investor, our aim is to provide equity financing or funding for start-ups, potential and existing entrepreneurs, and people with smart business ideas,” he said.
Mr. Quaye whose outfit has diversified business interests in a number of sectors, said after going through all the ups and downs that come with being an entrepreneur, he decided to build a company to deal with the age-old problem of seeking loans to start a business.
Read on as he shares with us his experience as an entrepreneur and how he birthed Quick Angels, a company launched in May this year.
How did Quick Angels Limited come into existence?
Mr. Quaye grew up with the passion for business. Growing up, he had always wanted to be an entrepreneur. “That is something that I have always been passionate about so, I embarked on a journey to fulfil this dream ten years ago,” he said.
“The journey appeared very far, the road very narrow and rocky. My financial backbone was very tiny and minute, so I decided to look out for financial assistance. I went to as many financial institutions as I could, and the answer was NO because it was a start up with little or no significant financial records. My structures appeared weak as in the case with all start-ups. This made me appear as a high-risk borrower. Through all this I became disappointed and decided to look elsewhere. I visited a couple of venture capitals. They also showed no interest at all. Finally, I went to family and friends but to no avail. The disappointment became so real; I was heartbroken and felt like giving up,” he added.
“During the course of becoming an entrepreneur, I realized that I was not the only one facing these challenges. A lot of entrepreneurs face the same challenge and I also realized this is one of the challenges our nation faces. Young Ghanaian entrepreneurs are unable to get the necessary funding needed to start their businesses because there is scarcity of investors in the economy. Lack of funding is standing in the way of many entrepreneurs and their dreams and over a decade on, entrepreneurs are still facing this problem. That was when I decided to help fix the problem,” he explained.
What does Quick Angel Limited Do?
Start Up equity financing
Early stage equity financing
Business equity financing
SME equity financing
Buying and selling of businesses
What is Quick Angels offering that other financial institutions are not?
Quick Angels, is offering unique financial solutions for Ghanaian businesses. They are giving Ghanaians the opportunity to come for financial assistance without having to open an account, deposit anything or bring collaterals.
For Mr. Quaye, most businesses are not growing because they are not able to meet the criteria of opening an account or bringing collaterals amongst others, before getting funds to start their businesses.
“We are saying we don't need any of these things because that cannot be a requirement for start-ups. That cannot be a requirement for young talented Ghanaians who are willing to define the future of our country.” he said.
How are you funding your business?
I am funding Quick Angels through the wealth I have amassed over the years from my other companies. These companies include Quick Credit and Investment Micro–credit Limited.
What is your criteria for choosing a business to invest in?
“Quick Angels funds from $10,000 to $1,000,000 per person, so we are very careful in our choice of business.
We will help anyone with a smart business idea that has prospect and is economically viable and is also interested in equity financing or funding. We also help potential and existing entrepreneurs, as well as young innovative businesses that wants to expand.”
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Why the need for equity funding?
“Equity financing is the bedrock of many great economies in our world today. It is a way that companies can gain access to a large amount of cash without having to take on debt. Besides determining the value of a company, equity is important to businesses because it can be used to finance expansion.
Many entrepreneurs are not involved in equity now but I believe a better appreciation of what equity represents, will enable our entrepreneurs to make an informed decision regarding a key funding opportunity, which while available, has remained underutilized in our business market for quite some time,” he said.
What makes you different from a Venture Capital?
Whereas venture capitals will source for money from other affluent individuals and invest angel investors do not go for money from others, they use their personal resources. This is one of the main differences. Venture capitals also check if your resources have reached a certain level before they invest but angel investors invest and share the rewards with you as the business grows.
What assurance do you have for your clients or people who want to access your facility but have lost confidence in the financial sector?
“We do not need to give anybody assurance. What we are doing is different. We are not a bank neither are we a savings and loans or a microfinance. We are angel investors. We do not take any form of deposit or investment thus we don't need to give any assurance to anyone. We are rather investing our personal monies into innovative ideas, businesses, and projects to become partners or take equity stake. This is a huge risk we are taking to help young entrepreneurs achieve their dreams”
How does the current financial crisis impact on your business?
For Mr. Quaye, the current financial crisis is affecting his business positively because “a gap has been created. Quick Angels' presence at this time is crucial. The good news for us is we do not accept any form of deposit taking rather we have come to assist entrepreneurs who over the years have been in need of equity financing for their dreams to become a reality.”
How can government help entrepreneurs?
For Mr. Quaye, an enabling environment plays an important role for entrepreneurs. So, he is calling on the government to provide the enabling environment and good policies to help entrepreneurs to attract angel investors or private equity investors into the country.