Small and medium-sized businesses, particularly those in Science, Technology, Innovation, and Research (STIR), have been encouraged to explore affordable, long-term funding options like venture capital and angel investors instead of relying on traditional bank loans to support and grow their operations.

This was the key message from speakers at an online conference organized by Heritors Labs in partnership with the RISA Fund, aimed at connecting startups and researchers to alternative sources of funding for their projects and research results.

The virtual event, which was part of the Women in Innovation and Research Conclave (WIRC) activities, provided participants with a better understanding of how venture capitalists, angel investors, crowdfunding, and seed funding operate.

Derrydean Dadzie, the CEO of Heritors Labs Limited, shared his thoughts in a brief speech: “Women innovators and researchers are often disenfranchised from accessing funds for their research and innovations, and in most cases, they do not have the opportunities that are available on the market to enable them to thrive in the ecosystem.”

He explained that the purpose of the online conference was to foster partnerships, collaborations, and investments in profitable innovations and research outcomes within the SME and startup sectors.

Barbara Aidoo, Programme Lead at Heritors Labs, delivered an impactful address during the Meet the Money Pathway webinar, a key feature of the Women in Innovation and Research Conclave (WIRC).

“Women innovators frequently encounter barriers when it comes to securing funds. Our aim with Meet the Money Pathway is to explore alternative finance models—like crowdfunding and angel investment, and partnerships with institutions like Impact Investing Ghana and Calbank Ghana—that offer women-led ventures the support they need,” said Barbara.

Mr. Daniel Appiah, Head of Commercial Banking at Calbank Ghana, clarified that banks are more inclined to lend their limited resources to well-established companies rather than SMEs and startups, as they perceive the sector to carry higher risks.

“The debt exchange programme has wiped out a substantial portion of banks capital, and they are now looking at where the little money left could be deployed to get immediate returns to shore up their capital, which is challenging for SMEs and startups,” he noted.

However, he stressed that most banks have deployed solutions that enable them to support budding enterprises right from the start, including the offering of technical support in the form of financial education to groom such businesses to be ready for funding.

“Banks know the exact funding sources for SMEs and startups as well as the peculiar interests of these investors. It’s therefore about how we can prepare such businesses to be ready and qualified for these funds, which are largely available, and that’s what most banks are doing now. At Calbank, we’re providing such assistance through our Calbank SMEs Academy,” he explained.

Ms. Justina Mensah, a program officer at Impact Investing Ghana, pointed out the current absence of dedicated funding for researchers in the country. However, she noted that with proper positioning, innovators and researchers have the potential to tap into crowdfunding, angel investors, and other forms of long-term financing to support their ventures.

“The reality is that in Ghana at the moment, there is no specific funding vehicle for research but it’s not impossible. Angel investing is one great area that startups can look to; we also have venture capitalists and crowdfunding, which have become options for startups and SMEs, especially those in research and innovation,” she noted.

She added: “But the caveat is that the research or innovation must be viable and of value to these investors. This means that researchers and innovation startups have to be well-positioned to secure funding, including examining the funding positions and requirements of these investors.

On her part, Ms. Eunice Asantewaa Ankomah, a certified digital financial services consultant, encouraged participants to leverage digital tools to build business records to attract investment from the banks and other potential investors.

“There are several digital technologies that can be used for bookkeeping, which makes it easier for startups and SMEs to present attractive financial records that would entice banks to invest in their business,” she advised.

The financial consultant further encouraged innovators, researchers and tech startups to forge strong partnerships with banks that can track the growth of the business based on their financial transactions to enable them secure loans when the need arises.