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#MentalNote · History · Politics · startups · venture capital

It’s Time To Build Pt. 2

4 years ago By cumeadi

Marc Andreessen, one of the co-founders of Andreessen Horowitz, wrote a timely piece during the height of the US COVID-19 crisis. Titled “ It’s Time to Build “. It’s essentially a call to arms for builders to focus on creating a better reality where we’re prepared for tomorrow’s challenges. It was a collective call to create a more conducive environment for builders and sounded like a call to get back to what made the United States great; making and creating.

Fast track to George Floyd’s death and we’ve seen a significant outpouring of support and collective action around ending racism and destroying racist institutions. Now more than ever, there’s an awakening to the fact that black people are suffering from systems built to disenfranchise and systematically ensure they’re held down. We’re at a pivotal point globally. We’ve all seen the decentralized protests around the world demanding change and justice for George Floyd and others who have died at the hands of those sworn to protect them. People, now more than ever, want to tear down and rebuild these institutions.

As we think of building and tearing down institutions we should make sure we’re focused on building a more inclusive type of institution. The only way we’ll really achieve the promise of a future where there’s equality for all is to ensure everyone is in the workshop as we’re building. We know this is currently not the reality. Black people lag behind on most indicators that would lead them to be in the rooms to be a part of this building process. In venture capital, for example, where the rubber meets the road when it comes to building, the stats are abysmal. For those who aren’t familiar with the venture capital space, here’s some data to provide some color:

77.1 percent of founders were white—regardless of gender and education.
Just one percent of venture-backed founders were black.
Women-funded startups received only 9 percent of investments.
Latino founders made up 1.8 percent of those receiving funding, while Middle Easterners totaled 2.8 percent.
Asians were the second most-backed group, making up 17.7 percent of venture-backed founders.

From Ratemyinvestor.com

We can’t build this new reality if there’s this much inequality in the venture capital industry. I don’t think individual actors are deliberately enforcing inequality – I believe the “system” of risk capital is flawed and perpetuates actors to not act in an equitable way. Venture capital is just one example. There are disparities in healthcare, education, job creation, urban development, and etc. Everywhere we look, there are systems that disproportionally affect black people, and most of the time, for the worst.

If we aren’t careful, we’ll build on the same bias and power structures and we’ll be back in the same spot 20 years from now wondering how we got to where we are.

Africa · business · startups · Technology

Strengths and Weaknesses of Nigeria’s Tech Ecosystem with Chika Umeadi from Tiphub

7 years ago By cumeadi

I got a chance to talk about the Nigerian Tech Ecosystem with Andrew from Global Startup Movement Podcast. We discussed the following:

Outside of access to capital, what are the common challenges for Nigerian entrepreneurs I works with?
How has deal flow coming out of Nigeria evolved since I started Tiphub?
Have I seen an uptick in startup activity outside of Lagos?
Whats the balance of Venture vs. Angel capital in Nigeria?

Listen to it on:

Africa · business · Current Events · startups · Technology

Foresight Africa viewpoint – African entrepreneurship in technology: Challenges and opportunities in 2018

7 years ago By cumeadi

I wrote a viewpoint on African entrepreneurship in Technology for Brookings Institute’s Foresight Africa 2018 Report. Here’s a link to the blog post here.

My Notes:

My 1st published article in a major publication… ***touchdown dance***
Updates on Fundraising in Africa from 2017: Read this CNN article here.
After all the Black Panther fanfare, I wish I could add more information on the diaspora’s role in advancing entrepreneurship and technological advances In Africa. I believe they have a major role to play in funding, ideas exchange and actual implementation.

That’s all for now. Cheers!!

Africa · startups · Technology · venture capital

Africa Startup Ecosystems Ranks: Where does Nigeria Fall on the list?

7 years ago By cumeadi

Sometimes a conversation becomes a little more. I shared this a founder who was asking me my thoughts on where Nigeria’s startup ecosystems ranks in Africa. While I didn’t have key metrics, I did mention where I would go to look and how I would evaluate. If I had to make a real essay out of it, (which I’m seriously thinking about doing), I’d probably take a more in depth look at where Nigeria’s startup ecosystems needs to course correct to be a global competitor for talent, ideas, and capital.

So a couple of things… In the life cycle of an ecosystem, Nigeria’s startup ecosystem unfortunately is still in its nascent days. There’s leakages of opportunities for investors and startups due to resource and capital constraints. I do know that we’re heading toward the globalization part of the ecosystem life-cycle. We are seeing a more foreign money, ideas, and resources flow into the Nigerian ecosystem. Comparatively, SA had all of these first and has exits under its belt so I’d still put SA up top. Nigeria still falls in the second tier of startup ecosystems in Africa for the following reason; lack of research and development $ from government, low ease of doing business scores, quality of human capital, access to seed funding (or lack thereof), etc. I will say though, Nigeria has made significant strides in “community” through the cabals, co-working spaces and other community focused pillars that re being built. This can be accelerated by an increase in the quality of education, R&D investment, and improving the ease of doing business metrics to make it easier for startups to find talent, operate, and to make money.

business · startups · venture capital

On Fundraising

8 years ago 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.

Know why you need to fundraise
Know who you’re fundraising from
Have your fundraising game plan and have your end game in mind
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/