4th May, 2017
Q: What do you look for as an investor when an idea is presented to you?
A: Knowledge of the subject matter [product / service] and industry as a whole. Realistic projections and business goals as well as personal drive and character of the entrepreneur.
Q: You watched over 20 different pitches in the den. Which presentations did you find the most captivating as an investor and why?
A:Businesses where we were able to touch and feel the products were definitely more interesting than those that simply came across as concepts.
Q: What was the hardest part of being a Lion?
A:Telling someone that you are not interested / will not be investing in their business was definitely difficult for me [even if it did not look like it]. It is unfortunate that we have to “let some people down” as we seek out the best businesses to invest in, and it’s my hope that we did not kill anyone’s dreams.
Q: It is said that we make a judgment on person within 30 seconds of meeting them. How much does an entrepreneur’s appearance matter?
A:Well, as an image consultant, I suppose I would say that it matters to me A LOT!!! Possibly more than it should. It is my take that your presentation shows your level of organization and self-respect. Regardless of your industry or code of dress, there is a level of grooming and care that should be maintained, for you to be taken that much more seriously.
Q: How much does the social impact of an enterprise affect your decision to invest?
A:It depends on the nature of the business. Social enterprise is a whole new arm of business and has different dynamics. What I look at is not so much the social impact, but the ability for a product and / or service to solve a problem in society today. That is what creates demand. Demand is the foot-stool of a thriving business.
VALUING YOUR COMPANY
Q: Which is the best way of raising capital for startups?
A:It would be best advised for a start-up to work with savings or funds from family to kick off and prove their concept. Once this has been done, they can seek out angel investors and angel funds to invest in their ideas. However, if you do not need capital, do not raise capital. I would recommend organic growth any day. It will then be much easier to get funds for growth and expansion of your already thriving business.
Q: In season 1 many failed to make deals in the den because of poor valuation. What is the best way to determine a company’s worth?
A: There are three very technical methods of valuing a company. Most people will value a business based on future projections, which is not wrong per-se… You however need to peg this future growth on existing growth, meaning that the business has to have existed for at least two years. It is therefore very difficult to value a start-up or an idea. The value of a start-up is directly equivalent to the funds required to start. Raising funds for a start-up automatically means that you would have to give up more equity.
MAKING IT ALL A REALITY
Q: Many business concepts/ideas never move from imagination to execution. What do think brings about this problem?
A:Procrastination on the side of the entrepreneur. Lack of confidence in the idea and playing the when-then game [when I get capital, then I will start my business / when I understand the market 100%, then I will bring in the product].
OWNING YOUR IDEA Vs SHARING IT
Q: The phrase Kenya uniform speaks to how much we ‘copy’ one another in our society. Do think this hinders new business ideas from flourishing?
A: Not at all. Competition is the fuel that drives innovation. The more people / businesses get into your space, the better you have to become in order to stand out. I any case, there is almost nothing new under the sun, just innovation on ideas and concepts passed.
YOU, THE SHOW AND THEM
Q: We saw a jet engine and an app created to save lives come into the den. Did you feel inspired by the ventures presented to you?
A:Yes, definitely. I think Kenya is a hotbed of creative ideas, and the more entrepreneurship flourishes, the more innovation we shall see. This is not necessarily because our generation is more creative than generations passed, but because in the here and now, we are seeing successful young entrepreneurs who have built successful businesses through coming up with unique ideas and monetizing them. This has in turn opened up people’s minds to possibilities!
Q: Angel investors take calculated risks. Are things different in the den in comparison to the boardroom?
A:Yes and no. Business is all about the same things; product, value, revenue. The only difference is that in this case, we are on the outside looking in.
Q: What was like being in a competitive environment with other investors?
A:It was definitely interesting to see other people’s approach to investing, and to business as a whole.
Q: In your experience what creates good chemistry between entrepreneur and investor?
A:Mutual respect, trust and understanding. As an investor, I need to respect an entrepreneur’s decisions and trust that they can make the right decisions. The entrepreneur needs to respect the investor’s opinions and trust that everything is being done for the overall good of the business. The investor and entrepreneur need to understand each other and each other’s processes. This is especially so in angel investing, because there is a very close relationship between the investor and the entrepreneur.
Q: Unemployment amongst the youth of our country is a major issue. Comment on the efforts being made by the youth, to change the Kenyan employment landscape themselves?
A:I definitely think it’s commendable that today’s youth are not looking to the Government to solve its problems. It is because of this drive that we see other players jumping in to offer support, and it is this drive that will grow the economy.
Q: Are there any other learnings from this first season that you can share?
A:n/a
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Article first appeared in the Standard Newspaper
