News
South Africa Has The Best Startup Ecosystem In Africa, Says New Ranking     |     New Findings Show Entrepreneurs Who Go Alone Survive More     |     Zipline In Ghana: What Is Left For African Entrepreneurs?     |     Zimbabwe’s Richest Man Takes Botswana’s Largest Telecom Operator Out On First IPO     |     Do Startups Really Need Auditors?     |     Five Proven Ways To Retain Your Customers     |     New Survey Report Shows Manufacturing Rate In Nigeria Is On Increase     |     How Spotify Built a $36 Billion Music Business And Lessons To Learn     |     Uber’s First IPO Promises Each Driver $40,000 Worldwide     |     Five Ways Investor Pitch Efforts Are Not Successful For Startups.     |    
Menu

South Africa Has The Best Startup Ecosystem In Africa, Says New Ranking

April 30, 2019

South Africa does not seem to be competing with any African country as far as the startup ecosystem is concerned. It remains the number one in Africa. This is according to a ranking developed by StartupBlink, a global map for startups worldwide, which has thousands of registered startups , co-working spaces and accelerators in its database.

South Africa does not seem to be competing with any African country as far as the startup ecosystem is concerned. It remains the number one in Africa. This is according to a ranking developed by StartupBlink, a global map for startups worldwide, which has thousands of registered startups , co-working spaces and accelerators in its database.

The ranking says South Africa is now the 50th in the world and the first in Africa, after it fell 13 places off from the previous ranking. Kenya is next, ranked 51, followed by Nigeria at 56, Egypt at 60, Rwanda at 64, Morocco at 65, Tunisia at 74, Ghana at 75, Uganda at 81, Cameroon at 84, Botswana at 90, Zambia at 92, Algeria at 99 and Ethiopia at 100.

Just Any Random Ranking From A Random Organisation?

The ranking is not one from a random organisation. StartupBlink, which works with notable global partners such as Crunchbase and SimilarWeb draws its data from what it claims is an algorithm that analyzes tens of thousands of data points on registered startups, accelerators and co-working spaces listed on the StartupBlink global startup ecosystem map, as well as data received from its partner organisations. 100 countries appeared on the ranking and 1000 cities from across the world were featured.

This feat by South Africa is remarkable because it may mean that, more businesses are finding it convenient to start up new ventures in South Africa than in Brazil, Russia, India, Russia, Kenya, the Philippines, Nigeria and Peru. However, the report still puts South Africa behind Malaysia, Slovakia, Slovenia and Croatia.

Russia on the fifteenth spot is the highest (15) ranked top emerging market country, closely followed by India (17). 

As expected, the US, the global startup hub is the most ranked country, trailed by the UK, Canada and Israel in that order.

Why South Africa Deserves the Top Position In Africa

South Africa is the number one spot in Africa in the startup ecosystem in Africa, according to the ranking, because it is doing things differently.

StartupBlink says despite the drop in ranking, South Africa has an extremely high potential. It adds that the country is still very much better positioned than its African counterparts to become a global startup hub. 

All the country needs to do is that:

“More active and positive government support is needed in order to reduce the difficulties facing startups and to simplify laws, helping entrepreneurs focus on what really matters — their business,”says the report authors.

However, StartupBlink says Kenya is Fast Closing This Gap 

“Since 2007, Kenya’s startup ecosystem has been revolutionising mobile payments with such startups as m-Pesa. Kenya’s government has been involved in startup ecosystem development since 2013, with the launch of Konzo Techno City, a tech park project built outside of Nairobi.

“Global tech giants like Google, Microsoft, Samsung, and Intel are also located in the capital city, ’’ the report says.

But Many More Things Are Still Left Undone:

”Despite being one of Africa’s well-established startup ecosystems, Kenya still has room to improve. The country receives far less global funding and investment, and has fewer helpful government initiatives, than are present in higher ranked countries,” the report said.

Lagos, Nigeria Remains The Top African Startup City

Cummulatively, South Africa wins, but city by city, its cities are shut out from the first 100 in the world. South Africa’s highest ranked city is Cape Town on the 157th position (down 17 places over 2017). Johannesburg climbed up to the 248th spot the world(up 22 places).

Lagos, Nigeria remains the city for African startups at 99, globally (up a massive 120 spots); Nairobi, Kenya is at 105th spot (up 86 places from 2017) and Cairo, Egypt hangs at 177th (up 27 spots). Kigali, Rwanda is ranked at 232 while Tunis, Tunisia at 223 is ahead of Accra, Ghana which is at 244th and Casablanca, Morocco which is shot down to the 284th startup city in the world.

US’ San Francisco is the global city for startups, says StartupBlink followed by New York, London, Los Angeles and Boston. Three emerging market cities are among the top 20 — Moscow at 10, Beijing at 17 and New Delhi at 18.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

New Findings Show Entrepreneurs Who Go Alone Survive More

Entrepreneurs who slug it out alone appear to have the upper hand in running startups that survive than their counterparts who run startups as teams.

Jason Greenberg, assistant professor of management and organizations at New York University’s Leonard N. Stern School of Business, and Ethan Mollick, associate professor of management at the Wharton School at the University of Pennsylvania in their recent working paper, once again brought to light a strongly debated question among academics and entrepreneurs over which approach is more suited for long-term success. Solo-founded companies or team-led ventures?

The Research Took Seven Years To Arrive At This Conclusion

Jason Greenberg and Ethan Mollick found over the course of seven years during which the study lasted, that solo-founded ventures were more than 2.6 times more likely to remain in business than companies with three or more founders.

The researchers also found that solo founders were 54% less likely than teams of three or more to dissolve or suspend business functions without actually closing, and about 41% less likely to do so than two-person teams.

Also See: Best Ways To Carry Out Market Research As A Startup


The study also found that the solo ventures generated more average revenue than ventures with two founders—and they brought in at least as much revenue, and often more, than those with three or more.

Key Highlights of The Findings

  • The researchers focused on a group of 3,526 companies that crowdfunded using the Kickstarter platform. 
  • Collectively, these companies raised $151 million in crowdfunding cash and generated about $358 million in total revenue between 2009 and 2015.
  • Dr. Greenberg notes that the solo-run companies, as a group, raised less money initially—even though they often went on to generate more revenue and last longer than their counterparts.

Reasons For Reaching This Conclusion

Although the findings needed more testing, according to Dr. Greenberg. The data shows that:

“The more cooks you put into the kitchen, the more likely there is to be disagreement about what ingredients you should use and so forth,” 

“It’s too early to form conclusions about the extended data. But preliminary analyses suggest that the solo ventures in this group are also more successful in terms of revenue and long-term survival than team-built businesses.

Single entrepreneurs remain the ultimate decision makers and bring in help only when they need it. By contrast, with team-led companies, decision-making holds the possibility of becoming contentious.’’ Dr Greengberg says.

Consequently, the research team has expanded its research to include a variety of sources, including the Crunchbase business database, the Panel Study of Entrepreneurial Dynamics II startup survey and a proprietary survey of more than 1,500 high-potential Wharton graduates, according to Dr. Greenberg.

The Disagreement And The Argument

A case would be made for why a high number of highly successful companies that started out as teams, such as Microsoft ,Apple , Google, eBay , Netflix , and Facebook

Also See: How International Organisations Are Helping Startups In Africa


But Alden Zecha, executive in residence at the Center for the Advancement of Social Entrepreneurship at Duke University’s Fuqua School of Business, was quick to point out that the reason may not be far-fetched: these team-founded startups survived and ended up more successful because there was the presence of that single dominant team member.

However, critics say both methods have their respective pros and cons, and that there’s no easy answer to the question. Rather, they say, the long-term success of a business can depend on factors such as:

  •  The size of the venture
  •  The industry
  • Founder experience
  • The number of collaborators 
  • The dynamics of the founding team, if there is one.

The Research Is Already Changing The Way Things Are Done.

It seems Dr. Greenberg is not readily buying into any further tests, even if there has to be one. He has, consequently, adjusted his classroom approach. Instead of allowing students to work in groups to develop business concepts, he has shifted to teaching them the skills they need to be successful on their own, such as how to hire the right people to balance their skill set and hire quickly, if necessary. 

“Given the choice, many students are opting to go the solo route,
Indeed, for some entrepreneurs, the solo approach may be prudent,” he says.

“While teams might be great once a venture is established and off the ground, starting a company requires decision-making speed and the authority to take chances, which can be harder with a team,” says John Bly, chief executive officer of LBA Haynes Strand, a provider of accounting, audit and advisory services.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Zipline In Ghana: What Is Left For African Entrepreneurs?

New drones would soon be buzzing around in Ghana’s airspace in desperate moves to deliver blood, or blood products or vaccines or anything related to emergency medicine. In so doing Zipline, the San Fransisco-based drone delivery company, expects to meet its target with the Ghanaian government.

Ghanaian Vice President,Mahamudu Bawumia, said a deal has been signed with Zipline to use drones to cover over 2,000 health facilities in Ghana which serve 12 million Ghanaians (out of a population of just 30 million) . Zipline is expected to begin operations from small community clinics and vaccination centers and then reach out to larger general hospitals.

The Terms Of The Deal, In Part, Are As Follows:

  • Zipline is to make 600 deliveries a day (150 deliveries from each of the four centers it would be operating from) for the next four years and they will be paid per successful delivery.
  • For that to happen, Ghana has been billed $12.5 million by Zipline to cover the period.
  • The hope of Ghana’s health policymakers is that the drone delivery system which has faster drop-off rate will improve its health outcomes including reducing its maternal and infant mortality rates.
  • The delivery program, if successful, will also help to reduce the incidence of wastage of medical products, as a result of overstocking at hospitals.
  • According to the World Health Organization, “severe bleeding during delivery or after childbirth is the commonest cause of maternal mortality and contributes to around 34% of maternal deaths in Africa.” The timely access to safe blood could save many lives.

Critics Say This Is A Big Hoax

Although Zipline is describing the Ghana operation as the world’s largest drone delivery service, Ghanaian naysayers are calling out the government for wasting such amount of money, which should have been spent on more important and simpler things the health sector really needs such as the critical shortage of hospital beds, gloves, consistent supply of water and the improvement of hospital buildings.

Zipline appears to be all out for business and does not seem to be buying into any of the stories. It plans to make Ghana the base for training future Zipline flight operators and prepares further to expand into more countries in the coming years. Already, Uganda, Senegal and some states in Nigeria are expressing interests in the drone delivery system. Zipline’s operations in Rwanda in 2016, delivering blood and blood products during emergencies, were largely successful.

The company is targeting the “last mile delivery” challenge which many logistics operators face in African cities and rural area where road networks are either underdeveloped or poorly maintained. The focus of last mile logistics is to deliver items to the end user as fast as possible.

From Delivering Blood to Delivering Pizza, Drones Have To Inspire New Generations of African Logistics Startups or Drone Manufacturers

According to a research report from Radiant Insight, “Unmanned aerial systems(UAS) markets (mostly dominated by drones) stood at $609 million in 2014. They are also expected to grow to $4.8 billion dollars, worldwide by 2021. The leading markets for drone use and sales include oil and gas mapping, utility line inspection, package delivery, and agricultural applications

Auterion Set to Announce Its Open Source Drone Control Program This Week

Should this happen, the Swiss technology firm Auterion which is working with General Electric Aviation and the Defense Innovation Unit of the U.S. Department of Defense would be allowing more consumer, commercial, and government drone manufacturers access to basic information on how drones are designed and programmed. This would also help small drone players to penetrate the drone market which is currently dominated by Chinese drone manufacturers, including DJI, by minimizing a complicated development road block: the operating system. 

Google

Just last week Tuesday, April 23, 2019, the United States’ Federal Aviation Administration’s gave the first ever certification for drone deliveries to Google’s Wing Project. Wing will now start delivering commercial packages weighing up to three pounds using drones.

Amazon

With Amazon Prime Air, Amazon.com is already delivering packages using drones in just 30 minutes. The U.S. Patent and Trademark office has already published Amazon’s patent application for its drone delivery system (US Patent 20150120094). Amazon is thinking beyond just home delivery. It already has design for features like“Bring it to Me”,which would capture a customer’s location by GPS data received through mobile devices.

UPS

In 2013, sources familiar with the company’s plans said it has been testing and evaluating different approaches to drone delivery. UPS is today partnering with Matternet under the first America’s Federal Aviation Administration-sanctioned commercial drone service to deliver medical samples in North Carolina.

DHL

DHL Express has already launched its “parcelcopter”, a helicopter-style drone which will deliver medications and other urgently needed goods to the remote North Sea island of Juist.

The Drone Manufacturing Market Is Still Very Much Open

Although the manufacturing of drones usually requires a lot of money, risk-taking investors, who are willing to stay longer in the market would have a field day of success. A few drone manufacturing companies have already taken strategic positions around the world.

Drone Current Market Leaders:

Matternet a drone start­up has been able to raise $16 million in seed capital from investors.They have successfully partnered with organization like Swiss Post to conduct pilots to deliver post by drones. This is a classic case of last mile delivery success.

Other manufacturers such as the Chinese DJI founded in 2006 by Frank Wang and headquartered in Shenzhen, Guangdong province, China is not focused on last­ mile deliveries but on other applications like photography and amateur applications.The number of players in this segment just depicts how familiar and aware people are getting with drones. DJI is the leader in civil­ drone industry. A privately held company, it has been able to raise 0.5 billion USD in revenue in 2014.

South African drone startups such as Aerial Monitoring Solutions (AMS) founded in 2013, UDS and HAEVIC also occupy a niche in the market for low cost, customised drones.

Also See: Ghanaian Startup mPharma Acquires Kenyan Second-Largest Pharmacy Chain

The Era of Drones Is Inevitable and Smart Startups Who Can Take The Risk Would Win Big

Drones are already business models to these industries:

  1. Global courier and delivery service companies using drones for last ­mile delivery​:
  2. Logistics companies have been experimenting with drones for delivery. According to Business Insider:

“Drone deliveries will translate to instant cost savings, part of which will be passed onto consumers.It costs far less to operate a fleet of unmanned aerial vehicles than it does a fleet of ground vehicles.It costs 10 cents to deliver a 4.4 pound(2kilo) package over six miles(9.7kilometers)using a drone,according to Raffaello D’Andrea,who co­ founded Kiva Systems (the warehouse robots used by Amazon) . That’s far cheaper than the $2 to $8 per package that it costs Amazon today using ground transportation for deliveries over this “last mile.”

Offering 30 ­minute delivery at such a low cost to consumers could boost Amazon’s eCommerce and retail market share.That’s because “high­ than expected shipping costs” are the top reason why consumers abandon a shopping cart online. The retailer achieving the most significant reductions in shipping fees will likely win consumer loyalty and market share.

3. Companies providing drone operations and management:​

The drone era will also benefit companies that offer service drones for flight and management console or software. Matternet still is exploring subscription based leasing of drones.

Motivation to adopt Drones:

Main factors that could motivate online retailers to adopt drones are:

●Cost 

●Value of fast delivery

●Convenience

Last Miles Delivery Drones Are Finally Coming To Stay

This is why for Ghanaian nurses like Gladys Tetteh, the use of drones are very much a case of what’s not to like?

“It makes us work faster and the mothers will not stay too long here trying to vaccinate their children,” she said.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Zimbabwe’s Richest Man Takes Botswana’s Largest Telecom Operator Out On First IPO

April 29, 2019

Interested investors should get their funds ready as Mascom, Botswana’s largest mobile operator with over 1.7 million subscribers is about to have its Initial Public Offering (IPO) on the floor of the Botswana Stock Exchange. However, only a portion of the shares held by Strive Masiyiwa’s Econet, which has 60% of Mascom’s stocks, would be offered to the public for subscription. Mascom’s offer is for 100 pula ($9.36) per share and trading is due by October of this year. 

Mr. Strive Masiyiwa

Zimbabwe’s richest man Mr. Strive Masiyiwa, who owns Econet which is also the largest mobile operator in Zimbabwe said last week that he intends to list some of Econet’s shares in Mascom on the Botswana Stock Exchange in what he believes will be one of the biggest flotations on Botswana’s Stock Exchange.


“This is what I have always wanted to do …I have never held enough shareholding to push it through,” he told reporters.

Mr. Masiyiwa is Zimbabwe’s Richest Man And He Owns Both Mascom and Econet

Mr. Strive Masiyiwa founded Mascom in 1998 in Botswana, months before he established Econet Wireless in Zimbabwe. Both telecom mobile operators are now the largest in the two countries.

Earlier in March 2019, Econet Group spent $300 million acquiring a 53% stake in Mascom from MTN Group. This increased Econet’s stake in Mascom from 7% to 60%. The remainder of 40% is held by the Botswana Public Officers Pension Fund. The deal is expected to be concluded anytime soon as regulatory approval is at its final stages.

Also See: MTN Nigeria Prepares To List On The Nigerian Stock Exchange, Converts To Public Company

Mr. Strive Masiyiwa, aged 57, is the 8th richest man in Africa with a net worth of $1.9 billion, according to Forbes 2019 estimates. His wealth comes mostly from the telecom industry.

Masiyiwa also owns just over half of private company Liquid Telecom, which provides fiber optic and satellite services to telecom firms across Africa. His other assets include stakes in mobile phone networks in Burundi and Lesotho, and investments in fintech and power distribution firms in Africa. He and his wife Tsitsi founded the Higherlife Foundation, which supports orphaned and poor children in Zimbabwe, South Africa, Burundi and Lesotho.

Botswana’s biggest IPO was in 2016, when Botswana Telecommunications Corporation listed after a 462 million-pula ($43-million) offering.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Do Startups Really Need Auditors?

The dream of every startup is to start off the project first, and then make profit. Having in-house or external auditors for the startups is not usually part of the game. Auditors are, however, usually there to review the accounts of companies and organizations to ensure the financial records of the company are accurate and rid of any illegality. They can also act in an advisory role to recommend possible risk aversion measures and cost savings that could be made by the business. An auditor can simply spill the beans about how you go about your expenses or how to go on borrowing. Here we discuss whether your startup business really needs an auditor in the first years of its doing business.

Auditing Gives You A Chance To Know More About How Well You Keep Your Records 

Auditing is important for your startup because it will help review the procedures your business uses to create and store records. The auditor reviews an inventory or listing — digital or physical — of the records your company keeps. The listing provides the auditor with an understanding of the volume and type of records your business manages. Auditing is incredibly important as bad accounting could lead to allegation of fraud and negligence, which may give rise to other serious issues in the future.

Once business owners know that their accounting process is up to date, it would offer them the opportunity to make key financial decisions for the growth of the business. They would also learn that for the business to be successful, they have to all work towards delivering the best results.

Auditing Will Give You A Chance To Fix Certain Errors Early

Businesses often slide into bigger problems because some minor issues were not detected and resolved at the outset of the business. What auditing does is to forestall this problem, including resolving any legal or tax issues immediately as they occur.

The risk here is that since most startups may lack the technical skills to detect some game-changing errors, errors can usually find their ways into the business and remain there, even for a long time. An auditor can set the records straight and also educate the business owner on how to effectively manage the accounting process and make sure everything is up to standards for the future of the business.


Auditing Is The Best Strategy For Tracking Your Finance and Making Adjustment

The best way to always track your finance and expenditure is to go by auditing. Auditing will make it possible for business owners to make more effective decisions, and channel their investment appropriately. Any accounting errors would usually be bad for the future of the company. 

Auditing Would also Be Required When You Are Seeking Equity Investors, or Looking For Lenders, Or Before Going On Your IPO or Simply Selling Off Your Business

Auditing is required most times, when you are looking for equity investors for your business— usually after a Series B or a Series C funding stage . In these cases, a lower level self-auditing may not be enough. However, before your business starts making profit, you may still be able to negotiate away from a full audit, even when it has been required. This may not be the case when the company matures. Again, auditing may be required if you are scouting for a lender by way of venture capital, or other types of bank loans. Audits of your business may also be required if you are thinking about selling off your business, finally.

Thinking about going public also?Audit is usually a must. 

Where Traditional Auditing Proves Costly, You Can Carry Out Self-Auditing

Getting a traditional external auditor to do the auditing may be like squeezing life out of your new business. The cost may be shooting through the roof. The best deal is to go the way of self-auditing. This would mean assigning a member of your business to look through the books and find the faults. Of course, nobody expects that this effort would generate information as accurate as that provided by a professional. It would, however, give deep insights about the startup’s finances. In all, although internal auditing may have its own set backs, it could be a good option for startups with very little money to spare.

Moira Vetter, Founder & CEO of Modo Modo Agency, a strategic marketing firm, that was recognized as a 2018 & 2017 Inc. 5000 company and a 2017 Best Places To Work, advises startups to adopt the following simple strategies towards a more effective self-auditing.

Formalize monthly financial statement review with your team — Awareness is the first step to managing budgets frugally. When the person charged with keeping the books closes the books each month, schedule a meeting to sit down and review the financial statement as a group. Ask questions about line items that are going up. Look for line items that are larger than you imagined and ask questions about why.

Review credit card statements as a group for recurring expenses & CUT THEM — For this to be efficient you need the team using the company credit card for all expenses rather than buying things on personal cards and expensing them. This is particularly important for recurring expenses so the group can see how seemingly small monthly items add up. Before you know it, lists of $5 to $25 monthly amounts are a serious monthly expense. My firm recently did such an audit and uncovered an analytics account that we are no longer using. These are the items to ensure you are still using, and take the time to cancel accounts if you’re not using them. Among these hosted items are:

Email Hosting — if you’re growing, the number of people with email accounts can grow quickly and a change in hosting can help optimize expenses. Change your hosting agreement if you need to.

Social Accounts — LinkedIn LNKD +0% and Job promotions, Facebook FB +0% and page boosts, Hootsuite or Buffer distribution services, Follower management apps like Unfollowers. Are you getting a return on these expenditures? If you don’t know, find out before you keep spending blindly.

Web Hosting — How much space and how much functionality do you need from your Web host? Could you be spending less for your website host.

Memberships — some startups belong to business clubs or Regus office locations. It can be a point of pride to invite people to a business club. If you haven’t been more than a couple of times in the last year, see if you can pay as you go versus carrying the cost of memberships you are not using.

Planning for Computer Expenditures — As a part of our year-end audit we assess the current operating condition of our computers and any anticipated expenses. New computers are like going to an office supply store, you want everything you see and all the shiny new stuff is fantastic. The extra step you should take as a startup up is not simply adding new computers, but determining who can use a computer hand me down. People that aren’t power users can use the current system of someone you are buying a new machine for to help maximize your investment.

Staffing Planning & Associated Expenses — If your startup engages recruiters, temporary staffing firms or advertises for a lot of positions, these expenses can add up quickly. Take time to assess all the positions you feel you’ll need. Only advertise when referrals aren’t a good source of candidates. If you have to use temporary staffing, pick a firm that does contingent placement and discounts fees based on the amount you have spent with the to temporarily staff a position.

Meal Expenses — As an early business you may be inclined to treat all the people you know to lunch or drinks on your card. You may also get in the habit of providing lunch on a regular basis for the staff. Remember that only a portion of these expenses can be written off on your taxes and think about when you really should be paying the tab. Food costs a lot, adds up quickly and is NOT an essential business expense.

Office Rental Expenses — Fight the urge to rent class A office space until you’re well along in terms of profitability. If you’re not using your space, consider a non-competitive sub-tenant. You could reduce your costs by hundreds or thousands of dollars a month.

Bottom Line:

Auditing can provide serious lifelines for startups plotting to go far. It starts from the first day to keep your business on focus and on the right track. It gives you deep insights on the errors of the business, including ways through which you lose money and how to move away from them. Even though it can be expensive, it could end up saving the day for startups if it can prevent costly errors.

You can check out a list of auditing firms for small businesses in your country’s business directories. Nigeria |South Africa | Egypt |Kenya

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world

Five Proven Ways To Retain Your Customers

April 28, 2019

You may be wondering why customers or clients are moving away from you in search of your competitors or other substitute products.In fact, according to Bain and Company, it will cost a company 6-7 times more to find a customer than retaining an existing one. A mere 5% increase in customer retention can increase a company’s profitability by 75%. Below, we discuss five proven ways to ensure that your customers always come back,or even bring in more customers.

1. Have Loyalty Programs In Place

While your true customers will do business with you, whether they are rewarded or not, most times customers who are rewarded may go the extra length of doing the real marketing on your behalf. In fact, a 2016 survey done by Facebook found that 77 percent of people say they repeatedly buy from their favorite brands. 40 percent tend to be repeat buyers but would choose another brand that offered a better experience. 37 percent, meanwhile, say they make purchase decisions rooted in their emotions. 

The Case of Dollar Shave Club:

The American Dollar Shave Club’s example is one of cultivating loyalty. The company has built a base of more than 3 million repeat customers in five years by ensuring its members feel like they are valued. After you sign up as a Dollar Shave Club member, you receive a welcome email that explains how to make the most of the service. 

Clothing and shoe ecommerce site Zappos is also well-known for its excellent customer service — including its efforts to show customers how much they care by saying thank you and sending gifts.

Zappos also has an office-wide tally of how many gifts and surprises have been sent to customers during the previous month to make sure the whole team is doing their part to show customers how much they are appreciated.

Referral programs like those in use at Stitch Fix, reward users who refer their friends to the business. These users earn discounts, products, or credits if successful sales are made based on their referral.

In a recent survey, when asked what would make them more satisfied with their purchase, 61 percent of consumers said “a simple thank you.”

Also See: Five Ways Investor Pitch Efforts Are Not Successful For Startups

2. Have A Culture of Excellent Customer Service

Businesses planned for service are apt to succeed. Businesses planned for profit are apt to fail, wrote Nicholas Murray Butler. The market is full of competitors who can offer the same products or services as you do. Customer service is therefore the big difference that sets the players apart. Customers are willing to come back a hundred times to brands that prove to be loyal to them.

Amazon.com as a Case Study:

Amazon.com is an example that customer experience is not only a physical thing alone, but could also be extended to online user experience. Customer experience begins from the website. Describing the customer experience of online market, Executive Editor Rick Ayre said: 

“If you spend a lot of time on the site, I hope you get a sense of the independent, literate voice. And that behind it all, you’re interacting with people, and it’s people who care about you and not people who are trying to sell you these things.”

To stress the importance of excellent customer service, Jeff Bezos took a flight to Boston in 1999, stopping at a construction site, to personally present a set of golf clubs to a construction worker, who the company claimed was the 10-millionth customer.

3. Track and Personalize Each Customer Experience

Tracking and personalizing each customer experience helps you to maintain long-lasting relationships with all your customers.

Businesses now use Customer Relations Management (CRM) tools to make this happen. The software can help you to track every interaction you have with every client. These tools show you every message a customer has sent to you when you view their profiles. CRM software makes it easier for you to see your customer as a person and not just a number.

Lidiane Mocko,a small business CRM coach, advises that:

“If you have a CRM system that supports automation, then you can configure an automated sequence that sends them a request, followed by reminders.”

The effects of personalization can be seen in this research by Econsultancy in which it found that personalization based on purchase history, user preferences and other relevant information typically found in CRM software delivers a high Return On Investment.

4. Send Engaging Emails Or Newsletters to Your Customers

If the number of time a customer makes purchases determines the level of customer retention, then email marketing determines the level of customer engagement and retention.

Emails present an opportunity to build more on the relationship with your customers, especially before and after their initial purchases. Email messaging is so critical that every sent message adds value to your customer’s experience.

The Case of Shopify:

Shopify data from Black Friday Cyber Monday indicated that, compared with other sources, email has the highest conversion rate at 4.29%, followed by search in second. It is clear therefore that email is a channel that converts customers to the company. 

Shopify.com

According to Shopify, one effective strategy is to use follow-up emails.

“ A week after a customer’s first purchase, send them an email that acknowledges and thanks them for buying from. This type of acknowledgement helps customers feel good about their decision to buy from you, and makes your brand more approachable.

You can make this initial email even more impactful by recommending products that complement their initial purchase. Finally, you can even start including customer reviews as well. These endorsements will increase both the value of each recommended product and the customer’s desire to buy.”

5. Widen The Gap Between You and Your Competitors.

This looks like the safest way to retain customers, because in the first place, there is not much competition, and customers have smaller range of products or services to choose from.

The Case of Apple:

If you want your customers to see you as the obvious choice over your competitors, then widen the competition gap so much that the customers would have to take notice of Apple’s strategy, demonstrated by their “Mac vs. PC” ad campaign.

The campaign starring John Hodgman as the inept PC and Justin Long as the cool, collected Mac saw the two humorously quipping over what made the Mac a better choice than a PC in a really entertaining manner.

The “Mac vs. PC” campaign was very tongue-in-cheek — and it generated a lot of dispute. Not only that, it divided the market and set Apple apart from their competitors by identifying the kind of consumers who should buy Apple products.

Bottom Line:

Finding the right marketing strategy is something you may have to give a serious thought because without it, the business is as good as not existing at all.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

New Survey Report Shows Manufacturing Rate In Nigeria Is On Increase

April 27, 2019

A new PMI Survey Report shows a better performance for the Nigerian Manufacturing Sector in April. This is for the 25th consecutive time in a row. The PMI Survey Report is contained in a report released by Central Bank of Nigeria (CBN) for the month of April 2019. The report shows the manufacturing sector in Nigeria improved more during the period under review.

Key Analysis From The Figures:

The report shows expansion in the manufacturing sector for the twenty-fifth consecutive month and at the quickest rate since January.

Faster Rises Were Seen As:

  • Production output (increased to 58.8 from 58.3 in March),
  •  Total new orders (increased to 57.2 from 56.7), 
  • Employment in the manufacturing sector (increased to 57.0 from 56.9); 
  • Raw materials available to manufacturing companies (increased to 57.5 from 57.1). 

The Red Light:

  • The report shows that fewer export orders were made, as total export order fell more deeply (to 37.4 from 47.9)
  • Inflation also hit input prices for most factories as input price inflation accelerated (to 60.2 from 57.6)
  • Total stocks of finished goods went up at a slower pace (to54.4 from 60.7).
  • Inflation, however, lessened on output charge for most factories (to 52.4 from 62.3) 
  • Overall, Manufacturing PMI in Nigeria averaged 51.70 from 2014 until 2019, reaching an all time high of 61.10 in December of 2018 and a record low of 41.90 in June of 2016.
Forecast Data Chart

Growing Sectors:

All the 17 sub-sectors surveyed recorded growth. Among others are management of companies; real estate rental & leasing; construction; wholesale/retail trade; agriculture; health care & social assistance; finance & insurance; professional, scientific, & technical services and educational services.

What Rising PMI Means For Every Economy:

 International investors coming into every country usually study the PMI (Purchasing Managers’ Index) to determine the most current economic situation in the country.  

PMI is usually the most closely observed business surveys in the world. It’s relied on by most countries’ central banks, including the US Federal Reserve, European Central Bank and Bank of England for providing the most accurate advance signals of changing economic growth and inflation.

Essentially, in predicting GDP growth, a sustained reading of higher than 42.0 PMI is considered to be the benchmark for economic expansion, while a sustained reading of below 42.0 could indicate that an economy is heading into a recession.

The Composite Manufacturing PMI measures the performance of the manufacturing sector and is derived from a survey of purchasing and supply executives from 13 locations in Nigeria. The survey shows the change, if any, in the current month compared with the previous month

Click here to download the full report.

Also See: Nigerian Bank of Agriculture is Open For New Investors

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

How Spotify Built a $36 Billion Music Business And Lessons To Learn

Spotify’s founders Daniel Ek and Martin Lorentzon could have had a big dream of building the biggest music streaming experience in the world, but not to the degree with which the dream has succeeded. It could still have come like a big surprise to them. Indeed, they were even more surprised, when on 3 April, 2018, the Company shares opened on the floors of the New York Exchange at the price of $165.90 per share, the cost of about 13 physical CDs then.

The music streaming company traded 30 million outstanding shares of its 178 million total, bringing the company’s market value to stand at $27 billion, and on the next day, Wednesday, after the first day trading, Daniel Ek’s shares (about 9 percent of the company) were worth $2.3 billion.

In fact, Spotify has become so popular a streaming music service that today it can boast of more than 96M paid subscribers. Why would something as less significant as listening to music in a very busy world suddenly acquire billions of dollars worth of value. Here is why Spotify made a difference.

Spotify’s Revenue/Loss Analysis as at 2018

Spotify Focused on Breaking Away From The Conventional Ways of Streaming Music

Daniel Ek and Lorentzon were not the only people in the world with the idea of changing the world’s music space. Sean Parker’s peer-to-peer music sharing service, Napster, had already become so popular with music fans, although playing some illegal games for profit. Apple’s iTunes already sold songs for as much as $2 per track. Daniel EK and Lorentzon’s plan was to find a space between Napster’s illegality and Apple’s great iTunes.

Daniel Ek put it this way then:

“I just really believe that if we create the right product, which is better than piracy, that people will come.” — Daniel Ek

And then, the solution was born:

  • First, Spotify would deliver instant music, with high-quality audio, no downloads, in ways that are completely legal. 
  • To make this happen, Ek and Lorentzon would have to invest heavily in technology to make every aspect of Spotify’s user experience memorable. 
  • With the broader music industry in decline and a strong understanding of the market, Spotify’s timing was perfect. The company was able to leverage this timing and market knowledge to negotiate its crucial early licensing deals.

Spotify spent the first few years of its existence growing the business by developing a strong product, instead of rushing for profit. In fact, it restricted how many invites users could give away to their friends. This gave it the chance to focus on continuous product development as well as plan for and manage steady, gradual user growth. It also manage the image of the product by making it seem as if it were only available to some select people. Users would therefore think it was really a privilege to have the Spotify App.


Spotify’s Early Negotiation With Record Labels Changed its Course Forever

Spotify made the best move linking the music streaming company with the best of celebrity bloggers. These bloggers not only danced to the music but spread the good news.The result: they kept coming back for more of the music. In just one year, Spotify had built a product that music bloggers were already excited about.

“Even today, Spotify’s traditional music player is better than everything I’ve tested on this side of Winamp / iTunes and a really good Direct Connect hub.” — Henrik Torstensson, CEO and Co-founder of digital health company, Lifesum, who worked at Spotify for three years, holding major roles such as Head of Premium Sales said of that era.

This was followed by negotiations with record labels.With sales falling, negotiation with the American “Big Four” record labels — EMI, Sony, Universal, and Warner Music — became an option. A couple of smaller labels also agreed to make their entire back catalogs available to Spotify for use outside the U.S. on a limited basis. The price of this deal is that the Big Four record labels would become Spotify’s biggest shareholders, pocketing almost one-fifth of Spotify’s stock for just $112,000.

Indeed, this was a game-changing deal. In fact, Spotify needed the labels — and their back catalogs — as much as the labels needed a new way to reach young music fans.

Another game changer also came, this time from Napster’s Sean Parker who was so surprised that Spotify has grown so fast and fat that he quickly took up his pen and wrote what WIRED described as a “1,700-word love letter” to Spotify. He followed up on the love affairs by introducing Facebook founder, Mark Zuckerberg, who was even more fascinated that the introduction lead to the official integration of Spotify into Facebook — a partnership that would propel Spotify to new heights of growth when it launched in the United States.

Spotify’s Freemium Model Helped the Company To Set Its Foot Right in a Crowded and Strongly Competitive Market

Spotify was already the best bet by 2011. It had earned almost over 10 million tracks in its catalog, accumulated over 1M music fans across seven European countries. The Freemium has made this growth possible.

Freemium users could get access to millions of songs, share playlists with friends, and play local music files using Spotify. Spotify’s Premium subscription, on the other hand, eliminated the friction of the Freemium app. Not only were there no ads on Spotify Premium, there were no listening limits, either. Premium users could listen to music in Offline Mode, a feature that was introduced shortly before Spotify’s launch in the U.S., and play tracks on their mobile devices — a significant differentiator at that time.

Also See: Uber’s First IPO Promises Each Driver $40, 000 Worldwide

Relying on this Freemium features, Spotify expanded to the U.S., where it partnered with some of America’s biggest brands, including Chevrolet, Coca-Cola, Motorola, Reebok, and Sprite, among others. Spotify ran display ads for its American launch partners on its freemium product. In exchange, the American partners gave away exclusive Spotify invitations to their social audiences. This drove traffic and brand awareness for the advertising partners.

Staying Ahead of the Competition Ensures Spotify Keeps Winning

How Spotify compared with Apple as at 2018

Spotify has kept the momentum and stayed ahead since then. The company has since launched a series of new features that would enhance user experience, such as, Discover Weekly, Release Radar, Time Capsule among others. This shows just how focused Spotify is on the core underlying technology behind its products.

Spotify’s greatest challenge is achieving profitability. Spotify revealed it currently has more than 207 million monthly active users worldwide, of whom 96M are paying subscribers. Fourth quarter financial results of 2018, showed the company making operating profit for the first time of €94 million ($107 million).

“Spotify’s done that as well,” says David Brickley, host of Entrepreneur Wrap and CEO/owner of STN Digital.

“ Sit down and think about the problems in an industry you know well, then brainstorm solutions. You have enough coffees with people, [and] you start to hear the same problem over and over again in the industry,” Brickley says.

The world is moving so fast and the next big thing, apart from Spotify, is indeed still yet to come.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Uber’s First IPO Promises Each Driver $40,000 Worldwide

April 26, 2019

Uber IPO is going to happen soon but the company has posed a loss of over $1 billion in the first three months of 2019 alone. However, one group of people who are going to benefit the most are the ride-hailing company’s drivers. Uber said each driver could get up to $40,000 each as a “driver appreciation reward” ahead of the company’s initial public offering. With its first IPO due earlier in May, the ride-hailing company is aiming for a valuation of $91.5 billion. If this becomes successful, Uber would become among the top ten US company with the largest U.S. listing in years. Plus: this is also a test of investor appetite for a high-growth but highly unprofitable business.

Here is How Everything Is Going To Play Out

  • To qualify for the reward, drivers must have completed at least 2,500 trips, including one this year, as of April 7, and have an account in good standing. Uber said payouts to non-US drivers would be adjusted to reflect different average hourly earnings across regions.
  • For US drivers, Uber said eligible US drivers would receive one of six cash rewards based on the number of Uber trips they’ve completed: $100 for making at least 2,500 trips, $500 for at least 5,000 trips, $1,000 for at least 10,000 trips, $10,000 for at least 20,000 trips, $20,000 for at least 30,000 trips, and the largest, $40,000, for at least 40,000 trips.
  • About $300 million has been budgeted by the company for more than 1.1 million drivers worldwide for payment on or around Saturday
  • In a regulatory filing on April 26, 2019, Uber is going to sell every share on its first day of trading at a price range of $44 to $50. This is not a big deal anyway.
  • The company will sell 180 million shares in the offering to raise up to $9 billion.
  • Existing shareholders in Uber, holding over 27 million are ready to raise as much as $1.35 billion from those shares. This is going to make them instant multimillionaires if this happens.
  • Of the stock being sold in the IPO by existing Uber investors, 6.86 million shares are from Uber co-founders Travis Kalanick and Garrett Camp, meaning the two men could jointly pocket $343 million if the IPO prices at the top end of its current range.
  • Already, PayPal, an American online payment solution, is making the first move by agreeing to purchase $500 million of stock in a private placement at the price the IPO eventually settles at.
  • Uber management is gearing up for what is going to be the hardest and the most stressful roadshow ever, as they would begin a difficult task of pitching Uber to public markets investors. 
  • Uber expects to price the IPO on May 9 and then begin trading on the New York Stock Exchange the following day, people familiar with the matter have said.
  • A valuation of $91.5 billion is already a handwriting on the wall. In 2018, Uber’s underwriters or investment bankers told Uber they would raise $120 billion when the IPO is ready to go, but then, this sudden adjustment in the valuation brings the company closer to the $76 billion valuation it attained in its last private fundraising round in 2018.
  • This adjustment of valuation expectations reflects the poor stock performance of its smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Thursday down more than 20 percent from their IPO price amid investor skepticism over its path to profitability. The most probable guess, of course, why Uber’s IPO would be more successful would be that Uber has more market share than Lyft, and would definitely perform better than Lyft.
  • Uber’s projected $91.5 billion market capitalization would make it bigger than General Motors (GM), Ford (F), Fiat Chrysler (FCAU), Tesla (TSLA), Honda(HMC), Volkswagen (VOW.Germany), Continental (CON.Germany), the entire U.S. rental car industry, and most of the aftermarket car-parts business. Only Toyota (TM), with a market capitalization of $200 billion, is larger.

Related: Is Uber Really Not A Profit Making Organisation?

The Loss, The Scandal, The Public Outrage

Uber Founders, Garret Camp and Travis Kalanick

When the road show begins, Uber expects to find a lot of answers to provide to questions posed by potential investors. Such questions would include:

  • When will Uber ever make profit? This question is going to be quite depressing for the company. The company reported in the filing, a net loss attributable to the company for the first quarter of 2019 of around $1 billion on sales of roughly $3 billion. 
  • How will Uber navigate the gradual movement to self-driving vehicles; would Uber’s business model support higher driver costs from minimum wage rules?
  • How will Uber handle sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas, going forward?

    “When it comes to Uber, we believe there are still questions over the current car-sharing model, the economics of which are not immediately or obviously attractive for sustainable, long-term investment,” Mark Hargraves, head of Framlington Global Equities, wrote in a note.
Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Five Ways Investor Pitch Efforts Are Not Successful For Startups.

Pitching your ideas as a Startup to investors is one of the hardest things to do. David Rose, founder of New York Angels and Gust explained that, “[Each year] roughly 1,500 startups get funded by venture capitalists (investors) in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.” So this means that of the 400 startups, for example, 399 others get their pitches rejected.

Searching for the right investors and convincing them through your investor pitch can be an intensive experience as a startup. There is no doubt about it. DocSend’s studies reveal that companies needed an average of 40 investor pitches over 12 weeks to close a funding round. Twelve weeks might seem a big deal especially when your startup relies on funding to move to the next level. While being rejected after the investor pitch can be depressing for most startups, the following are the reasons why investor pitch efforts by most startups do not turn out successful.

1. Bad delivery

Eric Ries, a founder of IMVU and an advisor to Kleiner Perkins, and the Author of the Lean Startup says startup investor pitches fail because of bad delivery, and particularly because startup owners answer the wrong questions during pitch events. He advised that:

“I have come to believe that there is a hierarchy of pitches, and that understanding where your pitch falls in this hierarchy can assist in making decisions about what information to highlight. Pitches that sit higher in the hierarchy tend to be more successful, and if you can fit your company into one of those categories, you can get better results or better terms. It’s not always about what is being said; how it’s being said is equally as important. It doesn’t matter that you have a great business model with incredible traction and the ability to scale if you can’t properly convey those qualities in your elevator pitch.” Eric Ries proceeds to advise on the best ways to pitch deals, by answering questions, to avoid bad delivery.

On Printing money. 

Key questions: Are those numbers real? How big is the market? Can your team execute the growth plan?

Most important slide: Valuation ( However, wait for the investor to begin the discussion of valuation and pricing.)

Also See: Business Schools: Flights To Success For Entrepreneurs?

On Micro-scale Results. 

Key questions: Who is the customer, and how do you know? What is the potential market size? What are the business economics? 

Most important slide: Lessons learned. 

Practice your investor pitch. Make sure it is well organized, and that you have done enough research to know who you’re pitching to. If you have been successful in the elevator pitch, and are using the PowerPoint presentation style, you have to present a slide presentation in about 15 minutes, then leave time to answer questions within another 15 minutes

2. Traction Is Not Just Enough

Again, many times, startups get turned down after their investor pitch because they simply have not proven themselves enough. Almost no investor will fund a startup that has not demonstrated some initial success — meaning sales or users. Eric Ries further offers the following set of questions and answers to help your pitch get traction:

On Working Product. 

Key questions: What does the product do? What’s the launch plan? Who’s on the marketing team? 

Most important slide: Live demo.

On Prototype Product. 

Key questions: What will it take to ship a working product? How do you know anyone would want it? Who’s on the engineering team?

Most important slide: Demo (if the product solves an obvious problem), engineering resumes 

On Breakthrough Technology. 

Key questions: Who owns the patents? Can we make a product out of this technology? Are there any good substitutes? 

Most important slide: Barriers to entry.

On All-star Team.

 Key questions: Has the team made money for their investors in the past? Are they domain experts? Are they committed to an idea in their domain of expertise? 

Most important slide: Problem we are trying to solve.

On Good Product Idea. 

Key questions: What kind of risk does this company need to mitigate (technology risk, market risk, team risk, funding risk)? Is it a revolutionary and novel idea? Is this team the one to back? Can the team bring the product to market? Who is the customer? Who is the competition? Will they fail fast?


Most important slide: About the founders.

You may believe in your startup, but investors believe in the numbers behind the startup. Although your funding resources may be small today, investors want to know that you were able to use those limited resources wisely to prove your concept and secure initial customers.

3. You May Be Dealing With The Wrong Investor 

All investors are not the same; the same with their investment strategies. While some firms and angels prefer to invest in startups in the very early stages, others prefer to invest later funding rounds. 

Ryan Westwood Co-Founder and CEO at Simplus, says:

“An investor with millions of dollars to spare usually requires a different level of oversight than an investor who’s dropped his entire life savings into your startup and needs it back in time to pay his kid’s tuition for college next year. It is also helpful to bring on investors who can make follow-up investments as you grow so you don’t convolute your capitalization table with more investors.”

Again, the choice of investment depends on the interest of the particular investor. While some may only invest in tech startups, others may only partner with hardware startups. The bulk of the work would be done by you, however, in finding out the best investors that fit your portfolio. You can also evaluate the investor’s personal business history before pitching the deals.

4. Your Investor Pitch Is Below Standards

Investors are interested in having best returns on their money. They like to put their money into something promising, and the best time to win their enthusiasm is during the initial investor pitch. An exceptional startup investor pitch is unforgettable. Even if an investor heard 50 investor pitches that day, only a few great ones will stand a chance for a deal. The keys to powerful investor pitch that get startups funded include that the investor pitch deck must be:

  • Clear and simple
  • Compelling
  • Easy to act on

Standard slides should contain the following: Problem; Solution; Market; Product; Traction; Team; Competition; Financials; Amount being raised.

According to some researches done by DocSend, potential investors spend on average 3 minutes and 44 seconds per investor pitch deck. The studies in about 200 investor pitch decks were analyzed, investors spent the most amount of time reviewing the contents concerning financials, team, and competition.

5. Very Bad or Inexperienced Team

Having a very a bad or inexperienced team may rub off on your investor pitch efforts. Bad or inexperienced team members may have hard times getting the interests of potential investors.

Your team members need to leave their pride at the door when making an investment presentation and be open to the investors’ suggestions. The fundraising process can be grueling because experienced investors tend to ask numerous questions that are likely to have been posed to your team before. These questions test your business model and technology platform so all parties might realize the best way of structuring an investment.

Rick Frasch, a partner in venture fund KLM Capital Group has this to say:


“Most of the time, these questions are offered in the spirit of openness to justify the investment of such a large sum of money. But rather than viewing the questioning process as an exploration of alternatives by an investor who is obviously interested in the startup (otherwise why else would the investor have met with the entrepreneur in the first place?), some people reactively resist suggestions to consider changes to their business model or technology platform. Such a reaction is likely to cause a thoughtful investor to move on. You should instead take the time to consider the investor’s questions and suggestions, and view the process as useful insight into his or her thinking.”

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Afrikan Heroes
Theme by Grace Themes