Having a promising business idea is no longer enough to convince investors to put money into a startup, Latitude59 CEO Liisi Org has said, urging founders to first build working prototypes, test their solutions and secure customers willing to pay.
Org said entrepreneurs who can show that their products address a genuine problem and have demand in the market give investors a clearer reason to back their businesses.
She said funding remains an important part of growing a startup, but founders should not expect investors to put money into untested ideas without proof that the proposed solution can develop into a viable business.
Her comments come as startup funding in Africa shows signs of recovery while investors remain careful about the businesses they finance. African tech startups raised a combined US$4.1 billion in equity and debt financing in 2025, a 25% increase from the previous year, according to Partech Africa.
Kenya recorded the highest total funding on the continent at US$1.04 billion, although a large share of the capital went to a small number of major transactions.
Data from Disrupt Africa showed that 19 Kenyan startups received funding in 2025, raising a combined US$273.2 million. This was down from 28 funded startups in 2024, pointing to the tougher environment facing businesses looking for investment.
Speaking during an interview with Radio Generation on Friday, Org said founders should first test whether their ideas can work before seeking money from investors.
“If you have an idea, my suggestion is that you first develop your own prototype and use your own resources, at least in the beginning. Once you have something to show, you can approach investors and explain why it is a good investment and why they should invest in it,” she said.
The Latitude59 CEO said founders also need to know how to present their businesses to potential investors and clearly explain why their solutions offer a worthwhile investment opportunity.
“And then, like, actually pitch it in a way that it's, like, you know, a really good investment to them. But if it's not, then they won't ever give you.”
Org acknowledged that some programmes and investors are willing to support startups at the idea stage, but said such opportunities are not common.
“There are programs where you just go with an idea and you like develop it a little bit further. And there are investors who fund only like ideal stage things as well, but not too many of them.”
She said incubators and accelerators can play an important role in helping early-stage entrepreneurs improve their businesses and become ready for investment.
According to Org, incubators give young companies a place to develop, gain knowledge, receive guidance from mentors and learn from other businesses at similar stages.
“Incubator is mostly like a place where companies incubate. So like get together, learn from each other, learn from mentors. They get a lot of this like knowledge,” she maintained.
Accelerators, she said, are designed to help startups move through different stages of development at a faster pace and can also provide funding to businesses that show potential.
“But accelerator is kind of like fast forward. So it's like we accelerate you further, and we sometimes accelerators also invest into companies. The one I worked in also invested in the end to like successful startups, so it's like accelerated program. It can be like three to six months or something.”
Org added that accelerator programmes can give startups access to investors, improve their visibility and provide business networks that can help them grow.
She pointed to the Latitude59 pitch competition as an example of why customer traction is important, saying participating startups are expected to have customers who are prepared to pay for their products or services.
“Our bridge competition has those criteria that you actually should have at least couple of clients already who are like willing to pay for this solution,” she said.
Org also encouraged founders to make customer feedback part of the process of building their businesses, saying they should speak directly to people who face the problem their startup is trying to solve.
“Go and talk to people who have the same problem. Like here, I've seen a lot of solutions from young people, like who are hacking, who are like from the countryside, who are like coming up with ideas, for example, for farmers. But go and talk to the farmers, and like, do they have this problem?” she maintained.
She said entrepreneurs should not rely only on positive feedback from friends and family when testing their ideas. Instead, they should engage potential customers to find out whether the problem exists, whether their solution is useful and whether people are willing to pay for it.
Such evidence, she said, can help founders establish whether their ideas have a real market and give investors a clearer basis for considering the future of the business.
The figures on African startup financing also point to a market where access to capital has improved but remains focused on selected businesses. Partech reported that equity funding in Africa reached US$2.41 billion in 2025, an 8% increase from the previous year.
Debt financing recorded a larger rise, increasing by 63% to US$1.64 billion during the same period. Despite the overall growth in funding, investment remained concentrated in established startup markets and larger transactions.