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Vusi Thembekwayo 10 June 2016

Over the past few weeks I have noted how my email has surged with requests for funding. All these emails have the same trademarks:

  • This is an investment I have to make or someone else will do it and “we” (the sender & I) will miss an amazing opportunity;
  • The idea WILL WORK, it just needs MY capital (note how they – the sender and potential entrepreneur – take no risk);
  • They have had the idea for so long but …. They have never had the “time” or “money” to turn it into a business.
  • The business is registered. They just need funding to get going;

Today I don’t even reply to the shameful scavengers. These are the carcasses that embarrass the real entrepreneurs out there trying to survive and even thrive. I know this is a strong statement, but it’s the truth.

Here are 3 Reasons why real entrepreneurs don’t need funding to start:

Money doesn’t make money. People do

The thing about starting a business with no money is it forces you to think, eat and breathe a singular problem: how to make more than you spend at the end of each business day. Frankly that’s all a business is. Money in > Money Out. So you learn how to productise quickly. Sell fast. Collect even faster. All this while delighting customers so they can buy again.

A lack of wanting drives a lack of innovation

Ever heard the expression, “necessity is the mother of invention”?

I am glad I had no money to start my first business. It was a strategy business and so I set-off to find work then I got the clients to pay upfront using a securitised instrument. Sounds complex but really it isn’t. Today, we start all our businesses like this. We finance off balance sheet until we can prove the business case. Today large companies don’t even ask for the security. They just want to partner with us and change the world because of our track record and results.

Our motto is simple: No capital? No problem.

Start small. Start badly. Just start!

Recently a young lady approached me looking to fund her piggery. All she needed was R6million to start her piggery business. Six bar! Imihlolo!

She has no experience in piggery or agriculture in general. She has no savings of her own. She has no off-take agreements with potential customers, no experience of running a business (not even a spaza shop) and most importantly, no actionable steps to monetize this business. Basically, she was smoking weed, got high and sent me an email.

More recently I funded a wanna-be tech entrepreneur. He wanted money to take his consignment business online and open up his goods to a larger customer base. No business plan. Just a set of well thought-through projections. A clear business case. And the WILL to make it work.

He wanted R129k. I gave him R259k after we had remodeled his plans and determined he needed more working capital to get critical mass faster.

Your business idea doesn’t need money. It needs you to get off your butt and figure out how you are going to get it to make R1 more today than yesterday. How you are going to collect that cash. And how you get your customers to pay you for being in business.

This is why I like boot-strappers: They have learnt the most important skill of working capital cycles & working capital management.

Here’s to the boot-strapper!

  • Sinokuphila MaTshangisa Kekezw

    Start Small, start badly, jus do it. Im so motivated. Thanks Bhut Vusi.

    • phomelele

      And thank you for the support.

  • Fumani Nkuna

    I remember when me and my brother we wanted funding so Bad, we went to Sefa, we were told the industry that we are in doesn’t have money. We went to GEP, NYDA, Banks. But we never managed to get any funding. We started writing letters asking for Funding from “Expensive Houses in Northcliff, Hyde Park and Sandton. we would distribute this letters to theirs mailbox and directed to “Dear Investor and Dear Vissionary”. we only got a respond from one business man but never materialized. The funny part is the more you desperately need funding the more you become creative and realise that you don’t really need funding. Skills, record and reputation does help in getting assistance. I would say I agree with Vusi: Just Start and no matter how small you are. you will never know how the shoes burns your toes until you are wearing them. Fumani Nkuna patner at KE Maids

    • Hamilton Seshibe

      Wow your determination is impressive Fumani. Successes to you and your team

  • Zovuyo Dywili

    About three months ago I took a risk and fulfilled my dream of having my own accounting firm. I took a leap of faith and trusted my gut feeling. With no capital and only 3 clients. My firm is up and running now with over 10 monthly clients. Yes I started small, I started badly but I started. The strategy our team uses is to never compromise on our values to the extent that we end up doubting out potential and treat every client that comes in with the utmost respect and humility.

    • Hamilton Seshibe

      Get started, its that simple. Congrats on the progress so far Zovuyo

    • Melissa Javan

      Well done Zovuyo

  • Hamilton Seshibe

    Thanks bra Vusi. I got so into this funding mentality that I even wrote a business plan based on a “mentors” suggestion that I could apply for funding of up to 13 million rand a year and a half ago. Yho the balls I had to believe that was shameful but it helped me realise some key things. 1. Business is about making moves, daily, weekly etc. 2. The best funding model is your clients(the Pakistanis are nailing this model). 3. A mentor should deliver more buttkicking advice than fairytales so that you actually get step 1, move. Today I run a service based brand and web design studio which helps me fund my newer business ideas. I am not writing lengthy plans anymore

    • Klaas Kabini

      @hamiltonseshibe:disqus i am impressed by your startup story.

    • Melissa Javan

      Well done

  • Lebogang Steward Mpolokeng

    Yes u can start small but at some point or stage the business needs funding to grow (not all businesses though). I started a small distribution business 3 years ago with a small capital from my savings in less than a year I managed to get a big contract with BAT to be their preferred distributor in small areas around Gauteng however as much as they (BAT) called is “small” to me as a young entrepreneur who just started it was big to the extent that they expected my company to be able to handle the demand of spaza shops in the areas that were designated to me. Unfortunately I had to start looking for funding in order to be able to function I went to every department you can think of that claim to fund with no luck as I write to you today BAT ended up closing my contract because I couldn’t manage the volumes of the demand from the clients. Today I’m jobless and yes I started small but got a bigger fish to fry which needed funding.

  • Ipeleng Morake

    3 million to start! Definitely not a great plan..haha! When we started we never actually thought we needed money,6 years later now we think maybe we need money! 🙂 But honestly I think good advice and to constantly find a way to motivate yourself…nothing beats an optimist and risk taker.

  • Tumusiime Isaac


  • Klaas Kabini

    Thanks Vusi, what you said is absolute truth. I learned that through my early failures in my first tech startup. I applied for funding at SEDA, TIA, Innovation Hub but was turned down with a simple response “the idea is too risky to fund and the business model does not seem viable”. I then thought to myself these funding institutions are assholes then bootstrapped to fund the venture myself but still failed without the product being in the hands of customers. After introspection, I realised that the first mistake we did as a startup was to embark on a full scale product development without doing early customer validation of our business case with a simple minimum viable product and pivot based on the feedback from early adopters. The second mistake was that we did not have any business skills but ignored the idea of seeking a business mentor to guide us. All in all, those early failures were good lessons, although some were costly.

  • Hahah… lol that weed head xD

    • Melissa Javan

      And all this time I am imagining an old lady with a knopkierie smoking the weed lol

  • Erick Chrispin

    In Tanzania this is the biggest challenge, some people especially youths believe that whenever they get money they will get a business idea. so it is money first and as a result they don’t start businesses and are not loan-able