How to raise financing for your startup

 

A comprehensive step-by-step procedure with tips, best practices, resources and document templates you will need.

Starting a business and one of the aspects that entrepreneurs find most daunting is raising start-up capital. Gone are the days of pitching investors with hot new technology ideas. Today, entrepreneurs are much more likely to dive into their own pockets and hunker down for a battle to start up and stay alive. But if you don't have the cash in your wallet, what do you do? Luckily, there are still options for funding new companies, but finding and securing the cash will take careful research, good negotiating skills, and, above all, an unflagging commitment to launching your new business.

Start your capital search with a good business plan that shows investors and lenders your company's potential. Follow that up with a thorough knowledge of the resources available and a determination to make your business a reality, and you should be on your way to uncovering a source that fits your new business's cash needs.

1.     Conduct a comprehensive business assessment

You will need to first do a fair complete assessment of your business. It’s important that you look good before you ask for money, have a good, innovative idea and know what else is out there, who’s into similar market as yours, what income they made, if you need to move and who will benefit from your business.

 

TIP:

Here are some important questions to ask yourself before you start asking others for money:

·       How much capital do I need and when do I need it?

·       From whom do I want the money? Do I respect them? What compromises will I accept?

·       What is the value of my company?

·       Who might be interested in my company?

·       What are my legal responsibilities to potential investors? How can I pay back? Do I have a lawyer? Do I have an accountant who can aid me with the numbers?

Know the legalities before raising support.

These are the document-templates you will most definitely need to rely on. But don’t forget to consult with your lawyer for scrutiny after you have had the document prepared.

·       Management Audit

·       Worksheet Strengths and Weaknesses Analysis

·       Worksheet Strengths and weaknesses

·       Worksheet Business Analysis

·       Worksheet Self-Assessment

 

2.     Write a business plan

Work out a product pitch. This should first be a one-liner you can explain in an elevator. Example, “I’ve designed a new kind of underwater camera that will benefit photographers, travellers, marine specialists and nature enthusiasts and I have a detailed plan on how to produce it, market it and get it into the hands of the target market.” When you can describe your plan in that short of words or less, create a full pitch for it, with all the pertinent details from your business plan. Remember, you are asking people to either invest or donate money. Prove that you are worth the investment.

TIP: before writing a full business plan, start by covering the essential elements like: product/service, market, target customers, marketing strategies, business model sources, competitive advantages, required start-up capital, etc.

Below is the document you will come in contact with while sourcing for capital in your early phase of your business:

·       Business Plans,  you need this one! Like it is a must. Need I say more?

 

3.     Finance yourself

Instead of planning to raise a large sum, or disturbing anybody, if you want to keep your dignity and self respect, consider taking money from your savings. Or try to create a product or service that you can sell and start selling. Use the revenue you are making to finance future product improvements and development. This is called Bootstrapping.

 

TIP: Another good option is to self-finance the early steps and seek funding half-way through the process – after you have incorporated and done all the research, and are looking to start production and/or launch your services.

 

4.     Go to your friends and family

Just because you know them well does not mean they do not deserve the same respect, presentation and information you would give someone you just met and are asking for money. Give them the full business plan and your complete pitch. Also, think of it as a safe practice zone before you present your pitch to a potential investor.

 

Document templates you will encounter or need for this specific step are:

·       Personal Guarantee

·       Payment Guaranty Demand Note

·       Promissory Note

·       Debenture form

·       Financing agreement

 

5.     Consider a loan but only as a last resort

Banks and other traditional lenders exist. Be sure to read all of the paperwork before signing up. It usually easier to get a loan for an established business rather than a start-up but you don’t have much to lose to ask your banker! Or even better, a few local banks…

 

TIPS:

· Consider microloans from private companies and non-profits, usually up to ₦20,000,000(twenty million naira) Examples include Jaiz Bank, Taj bank to name a few.

·       Also, not precisely a loan, but some of your vendors defer payments until you see a return on the product or service, which is called Vendor Financing.

 

Documents you will most likely encounter if you are the one seeking for a loan:

·       Bank Loan Application form and checklist

·       Loan agreement

·       Loan application review form

·       Loan Calculator with extra payments

·       Financial ratio calculator

·       Credit Agreement

·       Letter of request for an equity investment

 

6.     Look up crowdfunding

Crowdfunding is a great way to raise funds, especially if you have a business idea that is easily accessed through the Internet. By using one of the platforms below you can sign up for an account, create a project, make a pitch and then share the project over social networks, your website and a myriad of other ways. People can donate to your project from all over the globe, which is free advertising for your business after it gets funded!.

 

Check out the following websites:

·    NaijaFund. NaijaFund is one of the free crowdfunding platforms in Nigeria. It allows anyone to raise money online for anything including but never limited to business start up.

·        Fund An Enterprise. Fund An Enterprise is one of the fundraising websites in Nigeria.

·     CircleUp. CircleUp is another leading crowdfunding site in Nigeria. It helps you connect with foreign investors who have interests in the Nigerian market. CircleUp is an investment platform that provides capital and resources to innovative, early-stage consumer brands.

·        MicroVenture.

 

7.     Find Investment Companies and Angel Investors

Before you approach an investor, figure out all the terms. You will be dealing with Term Sheets, which are the documents involved with signing up investors. In these sheets, investors will try to determine your valuation. A valuation is a number value on your company, its assets and its potential income. Flutterwave, Patricia, Abeg, Piggyvest, Paystack and most fintech companies have taken this approach.

 

TIPS:

-Build a pipeline of investors: have lots of meetings and make the process competitive. Know your numbers for the meeting —look back to your research. Keep your business plan handy.

- If you decide to follow-through with investors, look up investment forums or groups on Facebook, Nairaland, Quora, Reddit, Clubhouse (yes, trust me, this app is very useful once you use it wisely)

You may need these document templates depending which party you are (investor or entrepreneur):

v     Term Sheet (more details will be talked about later)

v     Term Sheet for Series A Round of Financing

v     Collateral debenture

v     Convertible Debenture

v     Debenture and Trust Deed

v     Debenture Pledge Agreement

v     Participating and Convertible Debenture

v     Due Diligence Requisition List

v     Checklist dealing with shareholders and investors

v     Shareholders Agreement

v     Adhesion to the unanimous shareholders agreement

    You can purchase to purchase any of the documents from here.

 

8.     Talk to a Potential Business Partner

Find someone with capital who likes your idea and suggest a partnership. Or, find someone with business connections. Or, find someone who balances your shortcomings and/or has more experience in an aspect of your business plan. A partner is who is all of these things is the best, but even one of them could help you a lot in your venture. Look up this site for more tips http://addicted2success.com/startups/8-clever-ways-to-raise-money-for-your-new-startup/

 

9.     Dive into the Risky stuff

Take more risks. Take another loan. It can be a risk, but it can also be a great way of getting your business off the ground fast. Fortune only favours the bold.

You may need the documents should the need arise:

v Pooling agreement

v Mortgage

 

10. Consider Government Aid

Most governments – at the local, state/province and country level – support new businesses. Check out what grants and programs might be available for your

enterprise.

You will actually need:

Grant Proposal Template (there will be blog on how to write this) 

11. Other methods to raise financing

These methods might not be for all businesses but they are worth considering:

•Equity Crowdfunding: like crowdfunding but allows people all over the globe a chance to make a small investment in your business.

•Peer-to-peer lending: similar to crowdfunding too, but instead it is a bunch of small loans.

•Incubator funding: funding that starts out private to a select few but if your business has great potential, that’s one of the best ways as you’ll get visibility and mentorship for the same “price”!

PS: To gain the trust of your investors or easily win them over, I advise that you register your company in another country like the USA. Then incorporate the registered company in Nigeria as a Nigerian company. That way, it is a lot easier to raise funds since the investors will have full knowledge that they are dealing with not just a mere Nigerian company but a company whose head office is based in the United States. Why do you think those fintechs easily raise funds to start their business in Nigeria?

 

How to Copyright a Song in Nigeria in 5 Simple Steps

 

How to Copyright a Song in 5 Simple Steps

 

 

One of the finest aspects of remaining independent is definitely maintaining control of your music; after all, it is YOUR intellectual property. Hence, music copyright, please.

When you copyright your music, you have complete control over how it is used and distributed by others. Furthermore, when your music is used by others, you could also be paid copyright royalties, which might could result in financial gain. 

You should also know that copyright is territorial, meaning that your copyrighted work is not protected in other countries. However, the Berne Convention is a Treaty that protects your work from copyright infringement in other countries that are parties to the Berne Convention.

Check out our step-by-step tutorial below for all the steps you may do to secure your music if you are an artist who is publishing your own music.

However, before we get into how to copyright a song, we first need to ask...

Do you need to copyright your music?

Contrary to belief, music copyright is not as complex as you might have been led to believe.

However, copyrighting your song is a crucial step for protecting your music against copying and theft, even though the specifics differ from one country to another.

You only have to look at some of the industry’s biggest copyright dispute cases to prove the fact – Robin Thicke & Pharell Williams v. Marvin Gaye; Vanilla Ice vs. Queen. As well as more recent battles between the likes of Lana Del Rey and Coldplay, to name a few.

So what lesson can we learn from all of these big names?

That no matter where you are in your music career - copyrighting your music gives you the exclusive rights to:

- Distribute your music in all formats, both physical and digital

- Create derivative works or samples based on your music; and

- Perform your music live.

 

Copyrighting music in Nigeria

 

In Nigeria, the Copyright Act 2003 governs copyright, and the body charged with the enforcement and protection of copyright is the Nigerian Copyright Commission (NCC).

You can register a copyright with the NCC by submitting a completed registration form, along with two copies of the work, and evidence of payment of ₦10,000. Registration can be done online or physically at the NCC office. Visit the NCC website for further instructions.

Early registration is highly recommended. If you register before your music is stolen or misused, you can be granted a large pay-out – anything up to ₦50,000,000 per infringement, plus legal fees.

Therefore, if you are based in Nigeria, copyrighting your music by a more official means will give you that added layer of protection, if, or when, you ever find yourself in the middle of a copyright dispute.

Copyrighting music in the UK

In fact, in the simplest legal terms, copyright exists in the UK the minute you produce a physical form of your music – that is anything from a scribbled down lyric on the back of a napkin, to a sound recording of the bridge on your old Nokia brick.

Copyrighting music in the USA

In the US, there is a more official copyrighting process to be aware of.

This involves registering your songs and music with the US Copyright Office (USCO) and for US artists, this has definite benefits in terms of increasing your advantage, protection & power, when it comes to making money from your music catalogue.

What types of music can be copyrighted?

When it comes to music, it can often be difficult to define what can and what cannot be copyrighted. So here’s what is eligible and what isn’t.

Eligible for copyright:

- Literary works like Song lyrics;

- Musical works or compositions;

- Artistic works;

- Cinematograph works;

- Sound recording; and

- Broadcasts.

- Completed works (eg. songs, jingles, incidental music, symphonic pieces)

 

Not eligible for copyright:

- Song titles

- Chord progressions

- Incomplete or unfinished works

- You cannot have copyright protection over something in your head, which has not been expressed (in written or any recorded format)

Originality and expression are the key pillars for eligibility.

If the conditions are suitable, you can even trademark the name of your artist. That, however, is an entirely different scenario.

Now we know all the ins and outs of what copyright is, how it differs between lands and what is up for grabs, here are the 5 steps you need to start copyrighting your music today!

 

How to copyright your music in 5 steps

 

1. Make a physical copy

First thing first, write down or make a recording of your music.

How to copyright a song - make a physical copy

Sounds obvious, we know.

But the truth is, putting pen to paper or sound to recording is the first official step for claiming your music copyright – whether that’s for a song, a symphony or a jingle.

This can be as simple as writing down your song's lyrics on paper, noting the melody in a manuscript, or recording your voice or other instruments using a digital device.

Whatever method you choose is up to you – so long as it is possible to reproduce the song that you have ‘fixed’ into existence through some sort of tangible format.

Why?

Well, as we previously discussed, your song may technically and legally be protected by copyright as soon as you physically record it.

Which sounds simple, right?

I suppose it was a little too simple.

There are a few additional steps you may do to give the ownership of your music a little more substance, even if it is true that some copyright protection exists from this point on (so you could theoretically stop here if you chose).

 

2. Create timely evidence for your case

Copyright is a time-related issue.

Although you can claim that copyright exists as soon as a song or piece of music is written down, showing when the tangible copy was made is more challenging.

This is crucial if there are ever any disagreements about the "originality" or "authorship" of your work. In the event that a legal dispute arose, you would be forced to present proof that your song was the original, or show a "time-stamped copy," before anyone else copied it.

 

How to copyright a song - get timely proof

You can go about getting this proof…a few different ways:

One way is to simply upload a digital recording of your music or sheet music to an online platform like YouTube, SoundCloud or Facebook, send the files to yourself in an email, or back it up to a cloud drive like One drive or Google drive. The online platforms will show the date and time of the upload, and similarly, your email will be dated with when the attached audio was sent and the same applies to cloud backups.

Another way is to deposit a written or recorded copy of the song to a responsible person – such as an attorney or music lawyer - and obtain a dated receipt for the deposit.

But probably the most historically well-known method – what’s known as ‘poor man’s copyright’ (ouch) – is posting yourself a copy of the recording/manuscript by special delivery and storing it, sealed, in a secure place until a time when it’s needed for proof.

While this method may sound outdated (and arguably it is), in the UK this is still the recommended method by which to secure copyright.

This might float for any of you Brits, but in Nigeria, poor man’s copyright no longer makes the cut.

Instead, you will have to register the copyright for your song through a more formalized registration process.

 

3. File the right forms

Now you have a time-stamped copy of your tune, it is time to dive a bit deeper into the complex landscape of copyright.

How to copyright a song - file the paperwork

Every piece of recorded music has two sides:

- The publishing copyright (written composition)

- The master copyright (sound recording)

The industry treats these two parts of copyright separately, even in cases where the writer and performer are the same person. But the separate treatment helps avoid any potential legal issues.

When registering your song with the NCC, there are eleven sections to complete the form, you need to know more about this at the help page of the NCC.

 

How to copyright a song

Fill out and submit an electronic application on the NCC website. Payment is done via remita.

In addition, what about the money?

There is a small filing fee for registering your songs via USCO. You can find out more information on the associated costs from the fees section of their website.

However, here is the good news.

If you are copyrighting your own music, you can submit more than one song under one application for only one application fee!

This is ideal if you are copyrighting an entire album or EP and it will save you a tonne of money and paperwork rather than registering each song separately.

And yes while it might suck a little to dish out money for proving ownership to what’s already rightfully yours, this small fee is worth it a hundred times over if you were ever to go to federal high court over your music.

 

4. Divide the splits

How the money is divided up between the publishing and masters is very much down to how the actual song is being used.

While you – the recording artist - will reap the rewards from mechanical royalties, if it is a physical sale, such as a CD or vinyl, then the industry standard split is 91% to the master and around 9% to the publishing.

For music sync, it is usually a 50/50 split between publishing and masters, making music synchronize another great avenue for new artists to explore.

How to copyright a song - split the earnings

Do not forget - if you are a solo artist, you will own all of the copyright. However, if you are in a band or there are multiple songwriters or co-writers, then you will need to include this in the paperwork, to make sure different portions of the copyright are fairly distributed.

 

5. Start earning money from copyright royalties

Therefore, we have established copyright is great – it gives you full ownership rights to your music and prevents any mean people from stealing or copying your work. In addition, it requires you to give YOUR permission for others to record, distribute, sample or perform your song.

Nice.

However, copyrighting your music also opens you up to another potential revenue stream - via copyright royalty pay-outs - every time someone wants to perform or use your work.

How to copyright a song - make money from royalties

What is that? Another revenue stream for artists? Music to our ears.

Just make sure you are signed up with the right music collection society so you are being owed all the copyright royalties yo are due.