Angel Money & Venture Capital | The Good

A bit heavy for a Friday afternoon read, but indulge me.

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As always, we shall begin at the beginning…

The term “angel” comes from the practice in the early 1900’s (US) of wealthy businessmen investing in Broadway theatre productions.  These individuals fought all odds to put up the early stage seed money to launch the shows. Being the “sponsor” of a show carried prestige and potentially big returns that could be re-invested if the show was successful. In today’s world of corporate investment and financing, the term Angel Investors refers to a similar concept.

It’s been said that Angels aren’t average investors. They’re people who can financially afford to indulge in every way their love of entrepreneurship (with its associated extreme risk). Often angels are retired entrepreneurs or executives, who are mostly interested in investing on a level that goes beyond pure monetary return. These include wanting to keep abreast of current developments in a particular field, mentoring the next generation of entrepreneurs, and making use of their experience and networks on a less than full-time basis.

In addition, angel investors offer integral value beyond the funds they provide – they also bring you valuable industry experience, executive knowledge, creative ideas and those coveted business contacts.

So the question begs, what does the Kenyan market offer in terms of Angel Investors for your struggling start-up/SME? A quick search on Angel List reveals these https://angel.co/kenya/investors.

The flip-side of this coin is Venture Capital Financing. With VC Financing, companies can acquire large sums of money that would not be possible through bank loans or other conventional means. This is because, repayment of VC investors isn’t necessarily an obligation like it would be for a bank loan. Rather, investors are shouldering the investment risk because they believe in the company’s future success. So essentially, they allow you to build your company with OPM  – Other People’s Money 😉 – with the hope that it increases in value. So much so that you eventually list an IPO or sell to another company. The VC’s can then get a return on their investment capital.

Like Angels, venture capitalists also provide the expertise and industry connections that are extremely valuable. We have quite a number in Kenya. Most are concentrated in the tech sector;

– Fanisi Capital

– VC4Africa

– NaiLab

– iHub

– 88 MPH

– mLab

Now… how to get their attention, and more importantly their backing.

Find out as we share from our own experiences and observations with an especially interesting guest commentary from none other than George – one of our Lead Developers. He instructs us on “How To Survive An Alien Invasion” <—– His words, not mine.

Stick around.

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