Page 23 - Start Up_Genesis

Serial entrepreneurs Evan Baehr and Evan Loomis suggest, “Post your
profile only when you’ve raised at least a third or even half of the total
amount you are looking for from quality investors.”
Meanwhile, VCs target firms that have the potential to return ten times
the investors’ risk capital within five to ten years. Unlike angels, these
financiers have a far more visible presence for startups to spot them.
VC firms opt to invest less money into a business because so much time
and effort goes into negotiating a VC deal, thus it needs to be worth the
company’s while.
Because of lack of immediate liquidity and high risk associated with
this financing, the VCs are likely to target those firms that have high
potential payoffs. If a firm’s venture lacks the potential to excel, its search
for VC financing will be fruitless.
To connect with VCs, you need to have an online presence. A business
that doesn’t have a webpage doesn’t seem like a real business. You also
need to attend entrepreneurial forums and have a good pitch presentation.
Make sure you have well-connected people on your team who help to
grab VCs’ attention.
Entrepreneurs should not waste their time pursuing venture capital
unless they have all the characteristics VCs look for. In addition, venture
capital is nice to have, but it is costly both in economic terms and in
loss of control of the enterprise. When giving a pitch presentation to an
angel investor or a VC, articulate your business idea well and build your
audience’s trust in your character.
It is easy for a fast-growing business with huge growth to succeed
using outside equity capital, but for slow-growing firms, it is better to
avoid it or delay its necessity while building real value for themselves.
The question remains: Have African entrepreneurs mastered the art of
attracting angel and venture capitalists?

Photographer: Alex Ng’andu
Model: Ngan’dwe Chansa
Styled & Dressed by: Aurora Bella Collections
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