Following the apparent or perceived success of the likes of Jumia, Konga, Iroko, Paga etc in raising seed funding from Venture Capitalist, Private Equity etc, it is not surprising to see this wave of success cascade down to the inner blood stream of inspired young Nigerians. Talents abound in Nigeria no doubt and ideas are as wide as the horizon of imagination can reach.
Everyone who is inspired by their success wants to be the next big thing as well. One thing however, that is in the way of achieving this dream is funding. If you think getting funding is as easy as attracting some Indiana Jones type Investor then you got failure coming your way my friends. The financial world out there is as convoluted and as nepotistic as it comes and certainly lacks compassion.
How best to know what life is like for the fund seeking Startup than someone who had experienced it. So, it is with all pleasure this morning when I saw a list of tweets from Iyinoluwa Aboyeji that provides a succinct guide of What to expect & How to prepare should you desire to raise funding for your Startups. Enjoy it…
- Here is my advice for Nigerian/African founders from what I’ve seen/heard so far re raising money..
- First, understand most of the people you will pitch to are not convinced/don’t really care about your business..If they have done this for a few years, their default assumption is they’ll probably not make money. FYI
- Whether you get funding or not has nothing to do with your business or how great your idea or execution chops is. It 100% has to do with you. Nothing else.
- Do whatever you can (except lie) to make the other person feel comfortable giving you their money. #dazall
- Half the battle is who introduces you. Try not to have to cold email. But do if you must. Always start with the connection you have in common.
- It also helps if you have studied in a school they recognize (i.e a top 100 rankings school). If you are Nigerian, a founder from a top 100 school will probably help you better than an oyinbo will. Double + if you get a Harvard Business School co-founder. Sadly, I think this is a pretty stupid pattern matching formula. But it is what it is..
- If you can get some foreigners to invest, the Nigerian guys might take you more seriously..:)Work experience matters. The right kind of work experience matters even more.
- Ex-googler, ex-Goldman, ex-McKinsey, ex-Facebook..etc You get the money. Ex-Okoro and Sons – even if it is the exact same biz and you were GM. nada
- Age matters. Try to hide your age when you pitch. Keep your beard on. Might help to whiten it a bit 🙂 Sweet spot for investment is late 20’s, early 30’s. fresh out of school? Nothing for you..
- If you have the means to raise seed from foreign investors. Do. But be very generous with equity. Like very.
- Know your numbers. How will you scale+ how much money can you make on exit? This ain’t no silicon valley..
- Finally, keep your ask reasonable. Good luck!
Follow @iaboyeji on twitter.