Notes from MINC Talks #1 - Getting Funded: Challenges and Tips for African Startups

MEST, Saturday July 19th 2014


We’re excited to announce a new initiative: MINC Talks!

Hosted at the Meltwater Incubator, MINC Talks bring together MINC entrepreneurs with knowledgeable local business-people to share actionable advice for solving shared challenges.

Our maiden MINC Talk was themed “Getting Funded: Challenges and Tips for African Startups.” On the panel were Samuel Yeboah, co-founder of the ServLed accelerator, and Gerard Yitamke, founder and CEO of, a leading Ghanaian ecommerce platform. Prince Boampong (CEO of BigxGh and also Skyped in from the Savannah Fund accelerator program in Kenya, where he has began the fundraising process.

Below are notes from the event. Subscribe to the MEST email list for write-ups from future MINC Talks.

(Please note: the following statements are paraphrased transcriptions from a live conversation.)

The Panelists

Samuel Yeboah: Samuel is the co-founder of ServLed, a company dedicated to boosting startup potential through mentorship, access to networks and funding. Samuel was previously COO at Rancard Solutions for 5 years, where he helped secure investments from Intel and Adlevo Capital.

Gerard Yitamkey: Gerard is the founder and CEO of, a leading Ghanaian ecommerce platform. Ahonya recently secured funding from Dubai-based Rio Partners, having previously received funding from Nairobi-based Savannah Fund.

1) The 3 important questions African entrepreneurs should answer when deciding whether to look for funding


When deciding whether to look for funding, you must be certain to have firm answers to the following questions:

1) Do I have a clear, simple plan for making money that the investor can understand? Entrepreneurs in other parts of the world have the luxury of coming up with an idea and getting investors to delay the “How are you going to make money?” question until much later. For African entrepreneurs, an investor is a lore more likely to consider investing in you if you have a clear business model from day one.

2) Do I have the right team to execute on this idea? And if I don’t have the right team, am I willing to invest in acquiring people with the requisite skillset?

3) What is our exit plan? How is the investor going to get his or her money back?

[Tweet "3 things to consider b4 raising money: 1) Business Plan 2) Right Team 3) Exit Plan"]

2) On the importance of trust


I can’t emphasize enough the degree to which the success or failure of your fundraising efforts relies on trust. Ghanaian investors are relatively unused to investing in technology companies, and outside investors often know little about the local space. In such as an uncertain environment, your success will come down to whether you can convince the investor that he can trust the integrity and ability of you and your team.

This is why incubators and accelerators like MEST, ServLed and Savannah Fund Accelerator are so important. Beyond the funding and the mentorship, they serve as a seal of approval and a signal of legitimacy for investors.

[Tweet "Incubators/accelerators eg. @MESTghana @servled @SavannahFund important signallers."]


3) How can you convince investors that you’re trustworthy?


Have impressive traction, with the records to back up the numbers. If your numbers are interesting enough, a serious investor will take a hard look at you.

Additionally, make sure that you have a visible, active profile on the internet. Does your LinkedIn appear trustworthy? Who are you connected to? These are some of the signals that an investor looks out for.

[Tweet "Traction trumps everything."]

4) How to find and contact investors


At Ahonya, we begun by putting together a list of 50 prospective investors. To create this list, we researched investors on AngelList (with the filter set for Africa investors), VC4Africa, and also got the help of our initial investor, Savannah Fund.

The second step is to get introduced to the investor. The way this introduction is made is extremely important. A warm introduction from someone the investor is familiar with is a lot more likely to result in a meeting than a cold email. Use LinkedIn to figure out who can make a great introduction on your behalf!

The decision-makers at VC funds are called Partners. While Associates do important work at funds, they don’t make the final call. If at all possible, make sure you’re getting face time with a Partner.

After an initial meeting, follow up is important. Investors are busy people, so be prepared to be politely persistent about moving the conversation forward.

[Tweet "2 useful resources for finding investors: @AngelList + @VC4Africa."]

5) When should you start raising money?


Don’t wait until you’re running out of money. At that point, you’re operating from a position of weakness, and you’re in danger of taking on very unfavourable terms.


Absolutely do not wait until you’re running out of money. If your record-keeping is in order, you’ll have an accurate sense of your burn rate and your runway. The due diligence process takes many months, so your runway should determine when to start raising money.

[Tweet "Don't wait until you're out of money to start raising money."]

6) How long does the due diligence process take?


For us it took about 3 months, which was longer than I expected.


It’s not unusual for due diligence to take anywhere from 6 months to a year. Be prepared for that.

[Tweet "The investor due diligence process can take between 3 months to a year."]

7) Be prepared to say no


Sometimes, you’ll be given an unfavourable term sheet. It’s okay to say no. An investor-investee relationship is like a marriage - you want to make sure that it’s a relationship you can be happy with for years.


Don’t only look for any money, look for smart money. Beyond the cash, what else does the investor bring to the table? Do they have deep domain expertise in your target industry or a certain geography? Do they have relevant relationships?

Make sure that the investor is adding tremendous value beyond only the money.

[Tweet "Make sure investor is adding real value beyond the money - eg. domain expertise"]


8) What to do if the investor says no.


You should be having parallel conversations with multiple investors. This allows you to compare offers. In case a promising investor falls through, you have backups.


Even if an investor says no, it’s important to nurture that relationship. Politely ask for their feedback about your business and your fundraising efforts, and ask if they would be willing to make an introduction to someone else in their network.

9) What’re some things African entrepreneurs don’t think about when fundraising until it’s too late?


It’s important to get your books in order. Too many founders don’t think about proper record-keeping until it’s too late. Sales records, bank account details, receipts - keep track o everything.

During our initial conversation with Rio Partners, they even asked to see the SMS confirmation that is triggered when an order is made. A serious investor will be thorough in doing due diligence, and you need to be ready.


I find that founders wait far too long before putting together a Board.

Beyond operational expertise and domain insight, a strong board can be invaluable during the fundraising process by making warm introductions, and also by vouching for you. Again, in a low-trust environment, the word of a trusted board member can carry a lot of weight with an investor.

[Tweet "2 things African founders don't think about till too late: record-keeping and forming a board."]

10) What’s something that founders overthink during the fundraising process?


While equity is an important issue, too many teams spend so long thinking about equity that they cripple their chances of building a thriving company.

11) On maintaining the post-funding relationship with an investor


You must be proactive when engaging with an investor, especially when there’s bad news. Don’t wait until the Board meeting to spring up surprises. Check in frequently to make sure that everyone is on the same page, so that the Board can be understanding when something doesn’t go as planned.


Remember that you might have to raise more money from this investor at a later date. What sort of relationship do you want with them when that conversation is happening? It’s important to be in constant communication. You don’t want to acquire a reputation for unpleasant surprises.

[Tweet "Post-funding relationship with investor is important. Share everything, even bad news."]


12) Most of the investors in local tech companies are outside investors. Why?


Local investors are a lot more comfortable investors in areas they understand well, such as real estate. Technology companies are something that local investors are generally still relatively unfamiliar with.


There’s a massive need to educate fund managers about how to make informed bets on local tech companies. There’s still a ways to go, but with every additional announcement of Ghanaian company getting funding, that might chang.

[Tweet "There's a big need to educate local fund managers about tech."]

13) How can organizations like MEST and ServLed help improve the local funding landscape for home-grown technology companies?


We can help by very actively engaging with local fund managers. Fund managers have a real pain point - poor deal flow. We’re in a position to direct them towards very attractive investments, but only if we proactively invest the time and energy in educating them about the opportunities in local technology companies.

We should also facilitate knowledge transfer between tech-knowledgeable outside fund managers and local fund managers.