On Thursday August 13th, the second edition in a series of Angel Investor Bootcamps was hosted in Nairobi, Kenya. The objective of the Investor Bootcamps is to mobilize the early stage investing community and to grow a pan-African network of Angel investors.
Lessons learned will feed into the program for the 2nd Annual Angel Investor Summit September 23rd as part of DEMO Africa 2015. The events are organized by the African Business Angel Network (ABAN) in partnership with VC4Africa, the LIONS Africa Partnership Intercontinental Trust and. The Nairobi edition was hosted together with local patners Viktoria Ventures and the iHub.
The intended audience is new aspiring investors interested in learning about early stage investing as well as seasoned, experienced investors looking to share best practices and engage with their peers.
Master-class by ‘European Angel Investor of the year’ Brigitte Baumann
Centre to the Nairobi event was a master-class by President Emeritus of the European Business Angel Network (EBAN), CEO & Founder of Go Beyond Early Stage Investing and recently elected ’European Angel Investor of the Year’ Brigitte Baumann. Brigitte shared insights from her lifelong journey as an investor and took the audience through the whole investment cycle from deal generation to exiting.
A number of takeaways:
For early stage companies ‘Benchmarking’ has proven to be a successful valuation tool and probably more relevant and usable than more traditional methods better suited for later stage companies. Angel Networks and angel syndicates tend to screen more deals and make more investments and will therefore also be in a better position to benchmark compared as to individual investors. Benchmarking should be three-dimensional; sector, country and stage of development with three key divers behind the value of an early stage company being ‘Quality of Offer’, ‘Market Heat’ and the ‘Cash Situation’ of the company. With cash –also here- being king. In an African context benchmarking is a challenge but will become easier as more deals get done and more reliable data becomes available.
This being said what has worked in one country, ecosystem or industry should not just be applied in a different environment without understanding how and why something works. Investor education is as important as educating entrepreneurs when it comes to deal structuring, term sheets and angel investing in general.
Besides the science and the analytics, early stage investing is still very much an art form ‘As an Angel investor when your gut feelings tells you walk from that deal, follow your gut as it will haunt you later’. Brigitte Baumann also shared findings from the recently published Go Beyond Investor Portfolio Strategies and Performance report accessible via www.go-beyond.biz
Local Investors Joining the Conversation
The relevance of teams was stressed versus ‘lone-wolf entrepreneurs’ and the role angel investors play in discovering talent, coaching & developing entrepreneurs and opening doors. ‘You get out of it what you put into it’. An angel investor who takes her or his investing serious becomes actively involved. Period. Otherwise it is just play and for entrepreneurs this is serious business. Entrepreneurs are emotionally fragile when you talk about their business; they have poured their life into it.
Kenyan entrepreneur Hilda Moraa, co-founder of Weza Tele (recently acquired by AFB), confirmed some of the lessons from the master class during the panel later during the event when local investors joined the conversation. Commenting on a question from the audience about the level of involvement and control by investors, Hilda replied she was fortunate to find the right investor locally who gave autonomy to execute. During the same panel discussion local investor Sean Nowak quoted Y Combinator’s Paul Graham in answering the question what investors look for in entrepreneurs “Committed to the vision but flexible enough to adapt’.
Other members on the panel were Robert Yawe who has been part of the Nairobi start-up scene from the early days and Mutuma Marangu investor and director in several agricultural, energy and real-estate companies in sub-Saharan Africa and advisor to the Nairobi Stock Exchange. The panel was moderated by Viktoria Ventures Co-founder Stephen Gugu, also co-organizer of the Bootcamp.
Emerging trends and New Initiatives
VC4Africa’s head of Investor Relations Thomas van Halen also spoke, presenting the findings from VC4Africa’s annual research ‘Venture Finance in Africa’. This research provides valuable insights in trends in investment size, number of deals, jobs created and other aspects of early stage investing and entrepreneurship in Africa.
Meantime Atreya Rayaprolu Executive Director New Initiatives & Africa Intellecap presented the launch of the Intellecap Impact Investment Network East Africa Chapter. “Aim is to plug the pre-VC funding gap early stage enterprises face by mobilizing domestic capital and connecting international investors to domestic investors. Our investors come together to support brilliant and passionate entrepreneurs who are dedicated to solving difficult problems at the bottom of the pyramid”, Atreya explains.
Sebastian Levantard from law and advisory firm Intercontinental Trust also joined the event to speak about deal structuring, tax issues and some of the opportunities available to investors in Mauritius.
Next in the Series of events is the ABAN Angel Investor Bootcamp in Cape Town August 27 organised with local partner Silicon Cape. For more information, please see the ABAN website. This September the “Angel Investing in Africa” Annual Angel Investor Summit is presented in Lagos, by the African Business Angel Network in partnership with VC4Africa, DEMO Africa and the Lagos Angels Network. Lessons learned from the series of ABAN Bootcamps and Master classes will feed into the program for the summit. A special VIP event package has been made available to investors and can be accessed via the Investor Registration page.
African Business Angel Network (ABAN):
ABAN is a pan African non-profit association founded to support the development of early stage investor networks and to get many more investors excited about the opportunities in Africa. ABAN began as a consortium of independent investor networks including the Lagos Angels Network (LAN), Cameroon Angel Network (CAN), Ghana Angel Network (GAIN), Venture Capital for Africa (VC4Africa), Silicon Cape, DEMO Africa and the European Business Angel Network (EBAN).
For more information please contact David van Dijk, Director African Business Angel Network, via [email protected]