business · startups · venture capital

On Fundraising

9 years ago Author By cumeadi

 

Had the holidays so I took a break…. This week is the Bola special. It’s dedicated to fundraising like a boss.

For those who don’t want to read everything, here are the 4 takeaways on how to fundraise. I will most likely go super granular on each part in the future.

  1. Know why you need to fundraise
  2. Know who you’re fundraising from
  3. Have your fundraising game plan and have your end game in mind
  4. ABC. Always Be Closing

Know why you need to fundraise

Most founders will say they need to fundraise because they need money. While for many, that’s always the case, sometimes cutting cost, going after a more attainable growth trajectory, or eating what you kill (customer driven growth) is a better option. The metric most used to identify what needs to be spent is milestones. From there, understand how much each milestone will cost the company (people, time, $$$). Understanding milestones and use of funds along with market comparables will ensure you’re in a better decision to identify whether you need to fundraise or not and will also make your justification to family and friends, angels, and vcs sound more persuasive.

Know who you’re fundraising from

When I engage venture capital firms or angels, I try to know as much as I can about them…. How long have they been in existence? Who have they invested in? What is their thesis? Who are the key decision makers? What is it like to have them as an investor? Founders need to approach investment as if your hiring. You want to do as much due diligence on the investors you’re interested in as they will on you.

It’s also important to start the investment conversation before you need money. You’ll get a chance to “date” the investor a little bit and see if there is a fit. Also, they’ll get to date you and see if there’s interest. I normally advise reaching out and developing/creating these relationships 6-8 months before you need to fundraise.

I know the most common question after the last two paragraphs is “Where do I get all this information from?” Well, I’m glad you asked. The first place to start is to look at your networks. Who do you know and who do your friends know? I often start with all my friends in business school, law school or people I met at investment conferences. From there, I can get warm intros. If I don’t know anyone or need to know more information about their firm, I usually start with their website. Hopefully, you’ll see their investment thesis, portfolio companies and partners. From there, you can use LinkedIn, CrunchBase, Mattermark (sign up for a free trial and get information on all the investors you need…don’t tell them I told you that though.) or other platforms like VC4Africa, Angel List, Pitchbook (very expensive, find someone in the private equity industry who has access)

There are three strategies I’ve seen from founders raising capital for their company,

  • Make as much noise as possible through marketing and PR that potential investors will come talk to you (seldom effective but works.)
  • Research and develop a target list based on investment profile (geography, size, stage, industry) and reach out via warm intros.
  • Get an email list of potential investors and send (cold emails).

I’m sure most people have use a combination of all three.

Have a realistic perspective on how long and how much effort it takes to fundraise

Once you’ve made the decision to fundraise, you’ve got to develop a fundraising plan. You should understand and document the following:

  • How much you’re fundraising, valuation, terms, and how you intend to use the funds.
  • The type of investors you’re going after and clip you’re accepting
  • A real timeline: when you’re starting, when you intend to close, and when you really intend to close
  • How you’re going to reach out to investors… Communication strategy, relationship building and how you’re going to gain access to them

In putting your plan together, be realistic about how long the process will take. There’s one company I’m working with now and it’s taken 9 months to finally get the company into fundraising mode. Sometimes crafting the narrative is more than just words, it means acquiring the right customers, bringing on the right team members, or evaluating a new business model.

ABC. Always be Closing

In fundraising mode, those who are focused on it (should not be the whole organization, will take away from operations) should be focused on driving activities which will get interested parties down the funnel. I believe fundraising is essentially like sales for your company but to a different customer and product. Every activity should be tracked to bringing people more information to get an investment decision. This doesn’t give you the license to be entitled and pushy, but it does allow you the opportunity to be realistic and upfront to investors where you are in the process (to a certain extent…will follow up on a negotiations post)

Don’t half step

To conclude, fundraising is a skill and expertise that is essential to any company. You must learn how to go through it and how to be successful. To do that, you’ve got to be fully committed. An alternative way to think about fundraising is encapsulated in a saying I heard in my previous experience at Fortify VC, “The best investor is the customer.” You’d be really surprised but sometimes, customers are willing to bend over or pay for the idea of a problem being fixed. I know business models can vary but getting customers to pay ahead to create value is something which has been around for a long time. That’s a conversation for another day.

Toolkit

Here’s an example of an excel sheet I use to track engagement. Some of you may be fancy and have a crm to do this for you.

https://docs.google.com/spreadsheets/d/1ghPJOUGlD95oEQV_tq8QYYgiSouCQilnXEwB8UvmLaY/edit?usp=sharing

I use mixmax to track my emails and create templates for broad distribution.

I just got hip to a new investor crm/manager that looks cool. I smell a clone opportunity for African markets (writes down in idea notebook) https://foundersuite.com/

Education · Politics · Random · Uncategorized

The Rise of Pseudo Intellectualism

9 years ago Author By cumeadi

What is pseudo intellectualism?

Pseudo Intellectualism, as defined by dictionary.com is:

  1. Exhibiting intellectual pretensions that have no basis in sound scholarship.
  2. Pretending an interest in intellectual matters for reasons of status.

There’s no other time in the history of the world we have a limitless amount of knowledge at our fingertips. Traditionally, we’ve depended on institution and life experience to dictate who had access to knowledge but as a result of technological advances, we’ve seen a rapid democratization of knowledge in a way which overloads how we identify who and what is intellectual.

Instead of leaning on academic credentials, intellectual pursuits, and/or age, we’ve become a society focused on stance and position. We focus on a person’s ability to create a stance and answer a question instead of the pursuit of the right question. Ultimately, the pursuit of questions or answers is what differentiates an intellectual from a pseudo intellectual. The answer can be 42 but what is the ultimate question?

What are some examples?

Example of pseudo intellectualism is all around us. My favorite example of pseudo intellectualism are some people that consider themselves “woke”. Woke, for those asking what that even means in this context, is the awareness of systems and messages that facilitate social injustice. Some people will recite to you all the reasons said systems exist and how they are impacted but then enforce the same systems on other people. This shows a puedo understanding of what the systems are and how they impact a group’s existence.

Another example is our election process in the US. You are well informed if you identify key platform positions for each candidate. We regurgitate positions, history, topics of contention, but rarely ask why. Why does this position exist? Why are they on this side of the issue? What are the long term implications of this person’s position? We are hand fed talking points by the news and use them in conversation. As a result, they eventually become a force framework for how we think about the election. It becomes this vs that. The forced dichotomy prevents us from asking bigger questions that challenge the election process.

Is it bad for society?

Yes and no. The traditional role of intellectuals was to move the “pursuit of knowledge” forward so others can partake in its fruits. We’ve gotten to a point where there’s so much information and knowledge openly available, we need people who will curate and provide us with a bite sized understanding with the hope an average of bite sized summaries and positions will get us closer to understanding topics of interest.

To counter, pseudo intellectualism lulls people into a surface understanding of life. We outsource intellectual processing to other parties so we just become consumers of knowledge without knowing what went into making it. What’s in that burger?

How can we do better?

There are three simple ways we can combat pseudo intellectualism.

  1. Call out people who exhibit pseudo intellectual habits.
  2. Always ask why
  3. Be wary of those who point to an absolute truth…. One of my favorite sayings, “Nothing is true, everything is permitted.” is from Assassin’s Creed. “To say ‘Nothing is True’, is to realise that the foundations of society are fragile, and that we must be the shepherds of our own civilisation. To say that ‘Everything is Permitted’, is to understand that we must live with the consequences of our actions whether good or bad.”
business · startups

The Key to Finding a CoFounder

9 years ago Author By cumeadi

I seem to be getting this question a lot from companies that are just forming or looking to expand. Where can I find a Cofounder? To be honest, there’s no real science to it.

Have you ever lost your keys? It’s next to impossible to find where they are in the exact moment. That sucks.

The common fix to this challenge is you have a specific place you put your keys…whether it’s the foyer,  or a hook, or a drawer. You know exactly where to go when you’re looking for your keys.

It’s the same way with finding a cofounder. By the time you’re looking for one it’s too late. One of the key functions of founders/ executives in the making is to always know good people. It’s important to have a solid network of colleagues and acquaintances. Apply the same rigor you would to attracting customers and investors to hiring/ building a founding team. Here are some things I’d recommend just shooting off the hip.

  1. Network. You need to meet smart and intelligent people on a weekly basis that challenge common perceptions, from different fields, and walks of life. It almost needs to be second nature to be attracted to these type of people. I remember one time I went to an interview for a position and I didn’t get it, but I had the opportunity to speak with the company’s founder and his insights were career changing. The chance to speak with truly intelligent and driven people is underrated. Savor those moments because it will come in handy like when you need a co-founder. You can reach out to those same people to help begin your search.
  2. Know your strengths, blindsides, and what skills and experience will enhance your company. You’ll often hear solo founders say, I need someone who can sell, or market, or a tech guy or gal. While that’s a good start, think about where that function should sit in your organizational chart and how it advances your goals. If the skill that’s missing is essential to your unique value proposition, I’d say the person should sit at a founder level. If not, it’s a good move to bring them on in a non-founder role.
  3. Talk to people who are in the same position you’re looking to fill. If you’re looking for a CTO type founder, talk to CTOs in established and up and coming companies. Conversations with people who are in the trenches help you identify common traits that make a good CTO. They are themes. Sometimes, you can see these same themes in people that may not traditionally be on the path to CTO/cofounder status. Same rule can apply to other positions in a company.
  4. Have leverage. If you don’t come from a position of strength and opportunity, it will be challenging to convince someone to leave the comfort of their squishy job or commitment to join your early stage adventure. As a founder, you have to be convincing and show the unique product, market opportunity, and upside in a way that is exciting to potential candidate.
  5. Date. If you’ve filled your funnel of potential co-founders, start dating! I mean… try a one off project together that is super challenging. Get a chance to see how you collaborate in stressful situations. It also gives you more data to evaluate candidates.

(There’s definitely more. It’s time for my Sunday nap. I’ll add more as I think about them. I would also encourage you to add some in the comments.)

Adding a co-founder in the early stage of a company is a major milestone for any team. I believe it’s the beginning of a string of major decisions that set the foundation for what a company will grow to be. Be sure you’ve done you’re due diligence and you feel comfortable about growing and building with the person you select.

Politics · Uncategorized

The Western Fall

9 years ago Author By cumeadi

We analyzed the Arab Spring…Now let’s talk about the next revolution we all have courtside seats for…. The Western Fall.

Here in the US, we’ve had an unprecedented presidential primary season. We’ve had two anti- establishment candidates, one from each of the major political parties, rise to national acclaim. One of them is the presumptive republican nominee

Political pundits, historians, statisticians, failed in their predictions. Most are blaming miscalculations on changes in the media technology and how celebrities push forecasters further from accuracy.

They’ve brought out segments of the US population that feel disenfranchised, slighted, and that traditional political allegiances have not served their needs. Anti-establishment voter sentiment is not just exclusive to the United States.

Meet Norbert Hofer, former presidential candidate, of the far-right Freedom Party of Austria. The party wanted to provide more referendums, directly elect the federal president, significantly reduce the number of ministries, and devolve power to the federal states and local councils. While Hofer eventually ended up losing, he managed to get 49% of votes during the election.

The far left also has its share of rising political figures. In Greece, for example, Prime Minister Alexis Tsipras’ left-wing Syriza party is leading an unlikely coalition government with the right-wing populist Independent Greek party.

Across the West, we see a rise in conversations around immigration, economic integration, austerity measures , size of government, and a move away from “centrist” candidates and platforms. Why now and most importantly, what are the implications of a more populist West? Are we in a new normal?

Why Now?

There are a couple of major trends play a key role in the Western Fall. I believe the social liberalization is a major driver.

The World Values Survey shows that Western societies have been getting gradually more liberal on many social issues, especially among the younger generation and well-educated middle class. That includes egalitarian attitudes toward sex roles, tolerance of fluid gender identities and LGBT rights, support for same-sex marriage, tolerance of diversity, and more secular values, as well as what political scientists call emancipative values, engagement in directly assertive forms of democratic participation, and cosmopolitan support for agencies of global governance.

This long-term generational shift threatens many traditionalists’ cultural values. Less educated and older citizens fear becoming marginalized and left behind within their own countries.

Another key driver is the rise in income inequality. Western countries, who were greatly impacted by the global financial crisis, have rebounded for the most part, but inequality between the wealthy and the poor has continued to increase. While income inequality has increased amongst populations, there is also a larger discrepancy between richer and poorer countries in the EU.

Globalization and the advent of technology replacing low wage jobs creates some context as well. From retail to finance to healthcare and education, the jobs available particularly for low-skilled workers, are diminishing. One study from the Oxford Martin School published in 2014, estimates the 49% of all jobs are in jeopardy of technological disruption over the next 20 years. Low wage workers are feeling the bern already and it’s translating to isolationist rhetoric.

What are the implications?

What we’ve already started to see is a large shift toward isolationism. #Brexit is a great example of what is to come. Citizens who feel immigration is the cause of their country’s woes will close their borders and make it more difficult for immigrants to visit and and gain residency. They’ll want to block themselves off from their neighbors and go it alone. This is especially worrisome for the European Union as we’ll start to see more right and left leaning parties bring similar referendums to the people.

I also believe we’ll see the demise of the two party System in the United States. At this time, the Democratic and GOP platforms are too centrist for the ultra conservatives and the left liberals. It may not happen this election cycle, but we’ll see a fragmentation of the major parties in the next 5 years.

* I’d be interested in hearing more implications in the comments section. I’m just going to wrap up because I have to start making dinner.

To conclude, I do believe we are in a new normal. We’ve seen this coming for a long time. On the US side, the Tea Party was the predecessor of what we see now. The big question is how political systems will operate as a result of the new norm. I have a feeling that the process will sort itself out but it will take some deliberate steering. We are in an era where we have to deal with global problems collectively. Isolationism will serve as a hinderance to major challenges like climate change, water and food shortages to come. I haven’t even asked what this means for China on the worlds stage. What about emerging countries? Is this a chance for others to step up where other countries will attempt to focus more on internal development?