Assessing the challenges faced by Zambian start-ups in accessing external capital funding from Business Angels and Venture Capitalists

Start-ups globally have become an important conduit of economic development. They are often delineated as efficient and prolific job creators, the seeds of big businesses and the fuel to an economic engine. Despite their ultra-contribution, they still face daunting hurdles in accessing external capital necessary to scale up. This paper investigates key challenges Zambian start-ups face in accessing external capital funding from business angels and venture capitalists. On the basis of extensive reviewed literature coupled with qualitatively semi-structured interviews, detailed data upon which inference is drawn was collected from both start-up owners and financiers in question. Using clustering approach, evidence strongly reveal six (6) major challenges that sorely precludes start-ups in Zambia from accessing external finance specifically from BAs and VCs. Scientific novelty and contribution of this paper is reflected in the fact that, there exists relatively a small number of research papers, especially in domestic (Zambian) literature addressing this issue. Therefore, the research and its findings contributes to better understanding of the financing challenges and how entrepreneurial ventures can re-strategize to overcome the issues raised in readiness for future financing rounds.