VENTURE capital is increasingly taking a prominent role in global business finance.
As we saw last week, the venture capital mode of financing businesses is most ideal for start–ups.
This is because such companies usually have a lean asset base and limited operating history to attract capital from either the stock exchange or banking systems.
A venture capital investor identifies firms with viable ideas and prospects of a high growth market and provides them with finance.
For our discussion today, I would like to exemplify business scenarios which have attracted such forms of raising capital.
We have a Zambian company and other two recent cases from Egypt: Media reports from the recent seventh global entrepreneurship summit, held at Stanford University, in Palo Alto, California, reveals that, two Egyptian start-up firms, Instabug and Drofie, raised US$1.7 million and 25,000 Swiss Franc respectively from international investors.
Instabug is essentially a user friendly crash reporting system, which has embedded in-app conversations and data analytic capabilities.
Additionally, Instabug, facilitates seamless bug reporting and in-app feedback for mobile apps.
Drofie’s prototype, which by press time was still at pre-launch stage, is based on a technology that enables the device to capture stable pictures while on the move.
In last week’s article, we considered how venture capital operates and I also briefly introduced Venture Capital for Africa (VC4A).
VC4A is essentially a global platform that brings together entrepreneurs, investors, relevant top talent and opportunities to foster enterprise development in Africa.
Thankfully, VC4A founder, Ben White and Zamgoat Products Limited managing director, Paul Nyambe permitted me to use the Zamgoat experience of raising venture capital on the VC4A forum for the benefit of this column.
Around September last year, Zamgoat Products Limited raised 20,000 United States Dollars from the VC4A platform.
In 2012, Mr Nyambe, inspired by his desire to strategically position his business for growth, decided to join the VC4A platform.
He used the VC4Africa platform to tap into a pool of potential investors, mentors, and fellow entrepreneurs from around the world.
It was through the VC4A platform that he got invited to apply to a business accelerator programme run by Fledge LLC in Seattle, USA.
This investor was impressed with the Zamgoat Products Limited business concept and therefore invited the company to apply to Fledge for funding consideration.
His venture was, therefore, one of the seven, out of the 170 plus applicants from around the world!
Fledge is essentially a business accelerator which invests in and trains start-ups with projects which alleviate poverty in communities from around the world.
The deal between Zamgoat and Fledge included an equity investment and participation in the ten weeks Fledge Business Accelerator me in Seattle, USA.
According to Mr Nyambe, before the venture capital investment, the business was merely a struggling  enterprise with limited operational capacity and lacking in equipment, cold chain and transport capabilities.
Successful entrepreneurs usually see opportunities from daily events which other people consider ordinary and life as usual.
Mr Nyambe recognised that the demand for goat meat has been on the rise both in Zambia and in the neighboring countries.
The Zambian urban meat consumer tastes appear to be drifting towards natural food and livestock that does not require a lot of chemicals to breed.
Goat meat in this case has become a natural choice and has in the recent past increased in demand.
Despite this trend, goat processing and distribution has largely remained traditional and informal where one would purchase a goat, slaughter it and dress it from home.
Mr Nyambe saw the business opportunity and decided to take it to another level.
He, therefore, founded Zamgoat as a first local commercial-scale aggregator, processor and distributor of goat meat and other related products, including goat leather.
This is certainly not a mean achievement! Mr Nyambe has proved to have the tenacity and acumen for business.
His company Zamgoat is reported to have processed and sold over 2,300 goats over the last three years, and  earning more than 150,000 United States dollars.
This has in turn benefited more than 200 smallholder farmers from whom he purchases the goats.
The case studies above provide increasing realities that venture capital is globally becoming a reliable source of funding for large scale start-up businesses.
Over the last few years, we have come to see high profile companies being set up in Zambia.
However, it  usually appears that the entrepreneurs of such businesses obtain such capital from their own resources.
No they usually don’t!
Interactions with these firms reveal that a number of projects undertaken by a number of high profile entrepreneurs are funded from investment bank loans, venture capital or similar arrangements.
These entrepreneurs have learnt to harness smart capital in business, in the same way a number of us should.
For comments e-mail: ntumbograndy@yahoo.com   Mobile +260977403113 +260955403113
The author is the Managing Consultant at GN Grant Business Consultant, a fellow of the Association of Chartered Certified Accountants (ACCA), a Master of Business Administration (MBA) holder and a candidate for the Herriot Watt University  (Scotland) Doctor of Business Administration (DBA)