What’s it like to raise VC funding in 2025 as an African founder? To get a real sense of the current landscape, we spoke to Emenike Olome, CEO of Rabbit Africa, a B2B mobility platform; Toyin Olasehinde, Co-founder of Woodcore and Treford; and Joseph Oloyede, a data analyst at Insights, who works closely with startup founders and investors.
In this piece, we break down the benefits, challenges, and things to consider when raising venture capital in 2025.
The Pros of VC Funding in 2025
1. Money Still Matters
For many founders, capital is still the biggest advantage. It helps you hire a strong team, get the necessary tools, and move faster.
Toyin, co-founder of Woodcore, puts it simply:
“You get the funds you need to do what you need to do.”
If you’re working in a space that VCs are interested in, like AI, raising funds might be easier than bootstrapping.
2. Strategic Backing > Big Cheques
Emenike, CEO of Rabbit Africa, shares a different view. For him, who you raise from is more important than how much you raise.
“I’d rather take $500k from someone who can introduce me to Meta, than $1M from someone who just writes a cheque.”
Having an investor who can connect you to the right people, help shape your product strategy, or open doors can be worth more than money alone.
3. Credibility and Market Signal
According to Joseph, from Insights, getting VC backing can also build credibility.
“It sends a strong market signal. People take you more seriously, customers, other investors, even your team.”
The Cons of VC Funding in 2025
1. Equity Dilution
This is one of the biggest trade-offs. Once you raise outside money, your share of the company starts to drop. And with that comes reduced control.
Toyin explains:
“You now have to carry people along, justify your moves, and sometimes adjust your plans.”
2. Pressure to Perform
With money comes expectations. Investors want fast results, and that can push you to chase growth too early.
“You might start building based on what you promised, not what you actually believe is right,” Toyin says.
Joseph adds that this kind of pressure is real, especially when VCs expect high returns, even if your product hasn’t fully found its footing yet.
3. Risk of Losing Your Edge
Emenike raises another concern: trust and data safety.
“You share a pitch with a unique idea, and suddenly a portfolio company pivots into your space. They have capital and infrastructure, now you’re competing against your own concept.”
In 2025, with AI tools making it easier to copy and scale ideas, this risk is even more significant.
4. You Might Not Need It Early On
Founders today have more tools than ever. AI lets you build MVPs, run models, and test ideas without large teams or heavy spending.
“If I were starting today, I’d build as much as I can on my own first,” says Emenike.
“Then I’d raise, only when I’m ready to scale with the right partner.”
Final thoughts: Should you raise VC funding in 2025 or not?
VC funding can help you grow your business, but it’s not always the best first step. In 2025, more founders are choosing to build lean, test fast, and only raise when it makes sense.
Here’s what you should think about before raising:
- Do you need cash, or do you need connections?
- Can you test your idea without giving up equity?
- Are you ready for the pressure and trade-offs that come with investor money?
Raising VC funding isn’t bad; it just comes with terms you must understand fully. Think long term, protect your equity, and only raise when it helps you reach your bigger goals.
