Why strong Nigerian businesses still struggle to attract big capital -Runsewe

Nigerian businesses may have innovative products, loyal customers and ambitious founders, yet many still struggle to attract the capital required to scale through.

According to the Managing Director of Sage Grey Finance, Temitope Runsewe, the problem is often not the quality of the business idea but whether the company is structured to receive institutional investment.

Runsewe, who has more than two decades of experience advising, financing and investing in businesses, said investors increasingly focus on “investability” rather than profitability or innovation alone.

He said investors typically want answers to critical questions about the size of the market, customer demand, scalability, business economics, management capability, governance and how new capital will generate returns.

“A good product is extremely important, but a good product is not the same thing as a good investment,” Runsewe said.

He explained that businesses seeking investment must demonstrate who will pay for their products, how much customers will pay, the cost of acquiring them, customer retention, competitive advantages and the company’s ability to generate sustainable cash flows.

According to him, distribution has become almost as important as the product itself, particularly for technology companies.

“You can build exceptional software and still fail commercially because you cannot acquire customers economically,” he said, stressing that investors now assess the entire commercial architecture of a business.

Runsewe also identified a structural gap between Nigeria’s available capital and the number of businesses capable of absorbing it.