Funding constraints have always played a role in some of the challenges faced by African entrepreneurs on the road to building their next big start-up. This presents a drawback that puts entrepreneurs in this region at a disadvantage in the global market.

Over the years, methods like bootstrapping, crowdfunding, angel investors, and even the goodwill of family and friends have helped African entrepreneurs fund their dreams and stay afloat.

Grants like the Tony Elumelu Foundation Entrepreneurship Program and the Kenyan National Innovation Agency have beat the odds to ensure that African entrepreneurs and founders all over the region have access to adequate funding to launch their start-ups, launch operations, and develop their products.

In the melting pot, we also see options like incubators and accelerators presenting an opportunity for fund-raising. However, these methods come with their cons.

Some of them include loss of autonomy, unrealistic expectations, high competition, slow growth, and limited funding.

For this article, we will explore a unique perspective on one of these commonly used methods of fundraising: Crowdfunding. Except in this case, crowdfunding is powered by blockchain and not conventional structures.

Blockchain Crowdfunding: Why Africa needs more of it

On average, the magic combo for any startup to succeed in a tough terrain like Africa is capital, infrastructure, customer base, and expertise. Blockchain crowdfunding elevates possibilities by introducing new benefits that can only put startups at optimum performance and speed.

What is blockchain crowdfunding?

Blockchain crowdfunding is simply the process of leveraging blockchain platforms to raise capital for startups, projects, individuals, and businesses. The dynamic is simple. Here, online platforms utilize blockchain technology to facilitate safe and transparent fundraising.

There are more benefits to the concept. They are

DECENTRALIZATION

Blockchain crowdfunding platforms are designed to be decentralized, meaning no single entity or authority controls them. This structure ensures that the platforms stay transparent, secure, and resistant to manipulation.

UNLIMITED ACCESS

Blockchain crowdfunding platforms are accessible worldwide as long as you have an internet connection. This global reach allows people to invest in projects and businesses across different countries without being limited by geographical boundaries.

ACCOUNTABILITY

Every transaction on blockchain crowdfunding platforms is recorded on a public ledger that everyone can see. This transparency ensures that all activities are open to scrutiny, leaving no room for fraud or corruption.

AFFORDABILITY

Blockchain crowdfunding platforms generally have lower fees than traditional ones because they cut out the need for intermediaries to process transactions. As a result, more funds are directed toward supporting the projects or businesses that are being crowdfunded.

* * *

By considering blockchain-powered funding options, African entrepreneurs can rarely go wrong. The prospect presents ample room for healthy, well-paced growth, allowing entrepreneurs to focus on their most important objective which is building their product.

An interesting fact to note about blockchain crowdfunding is that it comes in different types. This means that African entrepreneurs can select a crowdfunding platform that is best suited to their product and long-term plans.

My next article delves into four different types of blockchain crowdfunding and the crowding funding scene in Africa using blockchain technology. Are we finally getting there when it comes to startups and funding? Find out.