MEST Lagos Hosts Sold Out MasterClass on Angel InvestingThe road to building a successful technology startup is riddled with numerous obstacles - from ideation, to building a prototype, to discovering early adopters willing to pay for or even use your solution, down to the one minute you have to prove to an investor that putting their money into your business will return some potential multiples of “x”.
Last Friday, the MEST Lagos Incubator held its first Master Class for entrepreneurs in the Nigerian technology ecosystem. This edition featured Mr. Tomi Davies - President, Africa Business Angel Network (ABAN), who discussed what angel investors look for in startups.
Tomi took the entrepreneurs through an in-depth exposition of his P.O.E.M. framework which allowed them see into the minds and thought processes angel investors leverage while listening to a pitch.
[caption id="attachment_5350" align="aligncenter" width="665"] ABAN President Tomi Davies during the MEST Lagos Masterclass[/caption]
Here are some key takeaways from his presentation:
You must be able to explain the P.O.E.M of your "idea" to an investor when pitching
When you pitch, it is important that you are able to communicate your vision and your passion for the business; this is the foundation on top of which the rest of your pitch will be laid. In order to properly understand your business and grade the product opportunity, investors often employ the P.O.E.M framework below.
Who is it for? Who are your customers? What is the pain point?
Who are the people on your team? What are your processes and underlying technology?
E - Economics:
What is the measure of revenue generated by the proposition you’ve made and what will it cost you?
M - Milestones:
How will you measure your proposition and your organisation using a timeline?
If all you need is money, you do not need an investor.
Cash is the least expensive thing an investor can offer you. What you should be looking for is an investor that can mentor and open doors for you using their network. It needs to be a fit on both sides. This is why it’s imperative that you understand what value-add comes with approaching a certain investor.
[caption id="attachment_5351" align="aligncenter" width="665"] Tomi Davies having a post-event chat with some of the attendees of the Masterclass.[/caption]
If you can’t demonstrate that the customers that matter are willing to pay, you don't have a business- you have a wish list!
Investors are generally more interested in, and keen about, your customers - the lifeblood of your business. However, it’s less a question of “how many” there are, and more about their willingness to pay.
As an entrepreneur pitching to an investor, you must be able to demonstrate specific customers who have provided credible evidence that they are ready to buy. It is also worthy to note that the person who pays for your product is not necessarily the end user; that’s why it’s also important to obtain valuable information about these decision makers.
Entrepreneurs need to be able to define explicitly how much progress their company will make with the proposed funding.
As an entrepreneur seeking investment, you not only need to show your potential investor where his/her money is going but also how much progress and returns will come as a result of the cash injection.
When trying to demonstrate progress explicitly, it also helps to have a track record, or a history of progress made with previous kinds of investments. Angel investors feel more confident putting their money, time and network into ventures that have shown credible evidence of being able to execute ideas.
Tomi’s full presentation can be found using this link. We’ve also made available a quick primer defining the most common startup jargon here.
Be sure to mark your calendars for the next Masterclass to be announced shortly. Registration information will be available on our website and on social media.
Here are comments from last Friday’s attendees:
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Due to COVID-19, MEST postpones training program to next year and doubles down on growing portfolio companies
At MEST, we continue to be deeply concerned about COVID-19 and have been closely monitoring developments locally and globally. Our number one priority remains the health and safety of our community and we will continue to follow local authority and health official guidelines.
Due to the ongoing nature of the pandemic and the uncertainty that the future of travel holds, we have been unable to conduct in-person interviews and host recruitment around Africa for our next cohort. For this reason, we have taken the decision to postpone the Training Program to next year.
While these circumstances are indeed unfortunate, we see this as an exciting opportunity at MEST to double down on providing support and mentorship to our existing portfolio companies and the African ecosystem.
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