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Investor Talks: Venture Capital, Angel investors & Private Equity
By ortus-admn
Published On July 20, 2022
KENNETH LEGESI, CEO / CHIEF INVESTMENT OFFICER , ORTUS AFRICA CAPITAL
Investor Talks returned with more jam-packed content offering insight into the venture capital ecosystem in Africa. Kenneth Legesi (London and Ugandan-based Venture capitalist) hosted an experienced panel of Lydia ldem (An American-based Nigerian venture capitalist), Eunice Ajim (an American-based Ghanaian venture capitalist), and Stephen Tio Kauma (An Egyptian-based Ugandan venture capitalist). The experienced panel dissected this emerging and critical industry of the Private market, which also includes lending by means of providing capital to companies.
2021 experienced a 229% increase in Venture funding, which rose to over $5 billion. Uganda recently named the most entrepreneurial country in the world, managed to attract $409 million in investment. The bulk of all venture-funded investments injected into Uganda was received by Fintech companies, which accounted for up to 90% of all funding received, Energy & Environmental resources and Healthcare and Pharmacies followed behind in second and third place respectively.
The panel explored the Private market and offered valuable knowledge of its inner workings and shared their forecast of its importance in the development of the continent.
STEPHEN TIO KAUMA, CHARTED FELLOW CIPD
I'm an angel investor. I would say that I'm more focused on principals. I obtained an MBA in finance and have knowledge of how things work within this space. I have invested in money markets and alternative investments such as collectibles and wines.
Private equity being an investment, I sought to diversify my portfolio. I believe the focus of the continent in this space should be centered around getting Africa into this game! The annual investment figure of $5 billion received by Africa pales in comparison to figures received abroad, which go into Trillions. Venture Capital is the best performing asset class; we as Africans should be focusing on involving ourselves in this space and not limiting it to the Western world.
As an African, I believe economic independence can be achieved through this. Africans should be buying into our intellectual property and avoid the mistakes of colonialism. I see no reason why investment clubs should hold all the money, and strongly advocate participating in and growing this investment class.
LYDIA IDEM, INVESTMENT ADVISOR, INVESTOR AND TRADER FOR 25 YEAR
I share the same passion as Tio for this asset class. VC will be the driving force for the 21st century. VC needs to be deployed in Africa, and I also believe the African Diaspora should be contributing to assisting Africans to access these funds.
I made my first angel investment in business school, although I’m proudly Nigerian, my first investment was in Uganda. Investing in Africa offers multiple benefits for the African diaspora abroad: The
evaluation is smaller in Africa
The larger currency trade makes it possible to invest greatly.
Why is the African diaspora not doing this? The perception that you need millions of dollars to invest is not true! Knowledge is key in this space, and understanding capital controls can help the diaspora bring wealth back into Africa. In my work, we aim to advise our clients and show them how accessible this asset class is.
How do you find deals?
Times are easier with the social networks, you are now able to reach founders.
Investing in this type of asset class offers real returns and in many ways is more beneficial than other asset classes that require you to wait for a liquidity event. IPO is the best example of this process, which can take several years in some instances.
I would conclude by emphasizing the importance of Post-cheque support. When investing it is important to analyze how you can provide additional support to a company after the financial investment, introducing founders to networks is a type of post-cheque support that can have a great impact.
EUNICE AJIM, THE FOUNDING PARTNER OF AJIM CAPITAL
My journey into Venture capital started when I began realizing that venture capital money can make a real difference in the lives of people. When investing it is important to note that syndicate clients do
exist, so I would advise not to invest alone and to always follow due diligence before investing.
If I would offer advice to entrepreneurs seeking funding from venture capitalists, I would advise them to be:
Cash efficient.
The company should not be burning through cash, it should reflect the potential for sustainability. A venture capitalist will always be interested in the financial statement of the company; the expectations of the company will vary depending on the investor and stage of the company. If the company during the pre-seed stage can generate between $5-10k month-on-month revenue, it reflects potential and will get you noticed, the further the company develops the higher the expectations will be.
Product Market fit
An integral aspect that all investors will be interested in is the compatibility and sustainability of the product in the local and potentially global markets. Investors will always take an interest in how the product works and if it can satisfy a need in the market, and create a demand.
Good Management team
To conclude I would emphasize what Eunice mentioned about the importance of a good management team. Investors want to see experience and intimate knowledge of the space in which the company operates. Entrepreneurs generally feel like they need to only showcase their achievements and hide their failures, this is not true! Perseverance is important, maybe the most important thing! Investors are always eager to see strong leaders and a company in possession of relationships that can make it through good times and bad.
We thank our honored guests for joining us and providing real insight and invaluable knowledge.
Be sure to tune in on the next #InvestorTalks
