Viktoria Business Angels Network (VBAN) launched the 2018 Master Class series at the Nairobi Innovation Week which was held in Nairobi last week. The Master Class on Early Stage Investing Strategy taught by Stephen Gugu was held on 6th March and attended by 35 interested angel investors. The participants were able to explore on a personal level how much time they want to invest, the type of investment, the form of investment and the model of investment. Why are they investing? Is it to give back, or purely for return? The participants also had a chance to come up with their own strategies with this in mind.
It is the objective of VBAN to provide an investment vehicle that enables local and foreign angel investors to pool their resources to invest in early stage businesses. As well as shared information on the benefits of group investing, there was an emphasis on the importance of building a portfolio of companies over a number of years. It is also imperative that you and your co-investors are on the same page. There was also a healthy debate when it came to the issue of valuation and dilution on follow on rounds. “At the end of the day, as an investor you need to ask yourself what strategy you want to have; do you want to participate in subsequent fundraising rounds of startups you feel are doing well within your portfolio, or do you want to be a one round angel? There are pros and cons of each but it is generally advised to leave some cash for follow on rounds to avoid too much dilution. Dilution will happen, the key is to ensure that as it happens the company is increasing its valuation,” said Stephen Gugu.
The second session consisted of a lively panel discussion with Aun Ali Rahman, Head of InfoDev at the World Bank Group’s Access to Finance program and Kanini Mutooni of East Africa Trade and Investment Hub, both angel investors themselves. Aun spoke of his experience in the Caribbean and how angel investing compares in other ecosystems. “Angel investing is not a passive activity. Investors need to play an active role in the company”, said Aun. There was also discussion around the need to lobby for a framework that gives tax incentives to investors as has been applied in different geographies, a good case in Scotland. This would encourage more investment into local early stage businesses. Kanini Mutooni also shared her passion for female led angel investing and said of her decision making on which entrepreneur to invest in, “I make the decision both based on my head and my heart. Most businesses don’t only need cheque books, they need advice and linkages. And that is where local angel investors can plug in.”
The Masterclass was held in conjunction with the USAID Trade and Investment Hub which is supporting initiatives to improve the enabling environment for trade and investment in East Africa. The Nairobi Innovation Week and Africa Business Angels Network were also key partners. This master class will be available online soon. To stay updated on this content, please send an email to info@viktoria.co.ke
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