#RoundUp: Venture Capital in Africa

Beginning today, we shall be sharing periodic roundups, on issues that affect African Entrepreneurs and innovators, with a focus on a particular industry space. This week we shall be at looking reports which relate to the African Venture Capital space. Enjoy.

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Date: O7.09.2015:

Location: Nigeria

Brief:

The Bank of Industry announced an investment commitment of 6 million dollars (about N1.2 billion) in Nigeria’s small and medium enterprises (SMEs). The investment commitment is being made through the 60-million dollar Venture Capital Fund being raised by Grow Africa Equity Partners Limited.

The Venture Capital Fund aims to provide equity capital. It comes with strategic and operational support to early stage and fast-growing businesses involved in technology, agriculture, consumer goods and services sectors.

"This new investment will increase development impact and socio-economic benefits through the creation of additional jobs, development of local entrepreneurship and will create additional fiscal revenue to government.”"

Bank of Industry is Nigeria’s foremost industrial development-financing company, with a loan portfolio of N592 billion. The bank lends to projects in Nigeria’s real sectors of agro-processing, solid minerals, gas and petrochemicals, as well as engineering and technology.

Grow Africa Equity Partners Limited is a Nigerian Venture Capital Fund Manager, which helps to develop outstanding entrepreneurs and businesses in Nigeria. Grow Africa provides business advice, as well as equity capital to new and established companies.

Quotable quotes:

“Nigerian businesses cannot be built on debt alone”. 
                                  - Rasheed Olaoluwa, MD, BoI

See more at: http://www.aitonline.tv/post-bank_of_industry_partners_grow_africa_for_venture_capital_funding__commits_n1_2_bn_into_smes#sthash.vZeM9YDB.dpuf

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Date: O8.09.2015:

Location: Africa, Kenya

Brief:

Sobek Venture Bank launched what is being called, the first Venture Bank, dedicated to serving Africa.  It is raising $3,075,721 ( with  US$768,930 already committed). According to reports, Sobek Venture Bank intends to respond to the gap in the African market, and roll out financial services to the continent’s most ambitious entrepreneurs.

Venture banks offer services  to venture capital (VC) backed firms, typically those which do not yet have sufficient cash flow to service a traditional loan. Among some of the services Sobek offers are, raising venture debt, growth capital, M&A advisory and modern wealth management services.

Quotable quote:

 “There is a tremendous business case to service loans, deposits, working capital and other day to day services required by fast growing companies that traditional banking business models aren’t built to handle… 

"The impact of having a bank designed for entrepreneurs by entrepreneurs is powerful beyond measure because we believe that Venture banking could actually reverse the risk averseness of banks that is prevalent throughout the banking sector on the continent.” 

                                            – The Sobek Team

See more at:- http://disrupt-africa.com/2015/09/sobek-venture-bank-raising-3-million-for-africas-1st-venture-bank/

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Date: O7.09.2015:

Location: Zambia

Brief:

Kukula Capital and eVentures Africa Fund (“eVA”) have announced the signing of a transaction with a view to provide an initial invest $500,000 in Dot Com Zambia. The investment is structured as a combination of debt and equity.

Kukula Capital (“Kukula”) a Zambian venture capital investor; are reported to be the only locally domiciled Venture Capital firm in Zambia and Dot Com Zambia becomes its seventh investment into a Zambian SME since its inception in 2010.

 eVentures Africa Fund (“eVA”), is a leading Dutch venture capital fund specializing in E-commerce in Africa. eVA, is reported to be the  first venture capital fund to invest in African technology driven companies nearly six years ago under the philosophy that it is African IT-engineers and tech-entrepreneurs that are best suited to deploy technology for African issues.

Dot Com Zambia is an e-commerce company with two subsidiaries: Import Zambia is an e-commerce platform that allows Zambian customers to shop from local and international retailers. Book Now Zambia, which includes the Bus Tickets Zambia brand, is a technology platform that allows customers to reserve, pay and receive bus tickets electronically.

The investment will enable Dot Com Zambia to grow its existing e-commerce business and roll out its proprietary digital bus ticketing system across Zambia and, with Kukula’s and eVA’s network, begin further piloting across the Southern African region.

Quotable quotes:

“while many more of todays investors are looking for investment opportunities like Dot Com Zambia in the ‘major markets’, in Nigeria and Kenya, we are the first Tech fund investing in this space in Zambia. And we believe with this investment, a Zambian tech-entrepreneur can set the example for his country, for the Southern Region of Africa, and one day maybe, for the whole of Africa.”

- Vincent Kouwenhoven. MD of eVA Fund

See more at https://www.lusakatimes.com/2015/09/08/kukula-capital-and-eva-fund-invest-500000-in-dot-com-zambia/

#ArtisteManagement101: Seven Lessons On Managing the Artiste’s Brand

The Nigerian social media was recently inundated with the news surrounding an artiste and His management. We must be careful about what we read in the media (including social media) these days, so I am not narrating this as verified fact, but the news more or less came out in the following sequence:

·         i. Artiste is reported to be dead

·         ii. Artiste is subsequently reported to be not-dead

·        iii. Manager- & record label exec is alleged to have falsified the news of the Artiste’s death as a publicity stunt

·       iv. Co-Artiste (& Co-Label Owner) apologizes for the false alarm of Artiste’s death; he further informed that the Artiste Manager & record Label Exec. responsible had been fired.

           v. Label Chairman (who happens to be brother of Co-Artiste is accused by someone- probably on social media- of attempting to use the Artiste  for “Money Ritual” and  Co-Artiste decided to clear the air on that as well.

·       vi. Label Producer is alleged by Co-Artiste to have  caused the misinformation leading to the "Money Ritual" accusation; he also said that the Label Producer was on suspension as he spoke.

·         

      vii. Artiste finally speaks- according to reports, he said:

“ This is not the first time this is happening to me. It’s like a blackout which occurs anytime I’m over excited. It’s happened two times…”

I had a feeling I should write when I first heard it might have been a publicity stunt, but this last statement by the artiste was the tipping point for me. So here are 7 lessons- learned- for Artiste Managers (including record label owners and artiste promoters)

1.       Not every publicity is good publicity- Yes; I know you’ve heard that- especially for entertainers- any publicity is good publicity. You & I both know that this is not true. You don’t. Do I really need to explain that? I don’t think so. You do? Ok let me try:

In the past 18 months, the Nigerian entertainment space has provided some controversial stories about Artistes, which were later alleged and/or claimed to be publicity stunts.

These ranged from a popular twin brother group purportedly planning on a split, to a producer/musician and wife claiming pictures of her face allegedly bruised & battered by Him was all a stunt- for real?? Maybe it was photo shopped- as was claimed by the two popular and usually controversial male entertainers making out in photos. There was also the one where a 23 year old pop singer, offered her virginity to boko haram members in exchange for the kidnapped girls.

What these diverse “publicity stunts” had in common was the public back-lash they generated. Some of the not-so-nice words used to describe these “stunts” included “dumb” & “dangerous”….  I hope that’s clear enough

2.       You do not need to respond to everything:  I have a theory that 8 times out of 10, responding to rumors only make them more popular and begin to assume the nature of truth, sometimes the response itself then becomes a rumor then we find ourselves dealing with a whole other issue, than the issue that started it e.g “Money Ritual”

3.       If  you need to respond, think your response through: let me explain this by using  a simple logical thinking model:

·         Major Premise: Artistes should be very excited when they are performing at shows

·          Minor Premise: Artiste X says He blacks out when He is very excited.

·         Logical Conclusion:  Artiste X should not be performing at shows

Now, a conclusion can be logical without being valid, but imagine if it was an concert sponsor or a show promoter coming to the above logical conclusion; Artiste X may not be getting on their show. L

4.    If you need to respond, respond with one voice: There was a lot of communication about the one artiste from different artiste management sources- no one person be able to communicate unilaterally for the corporate body, on such a sensitive issue, without a go from the group.  

5.       If you need to respond, respond with one message: Nothing kills a brand like multiple, mixed, inconsistent messaging. Branding is about finding an anchor in the minds of the brand audience. It is easier to build a brand when people know THAT ONE THING the brand stands for.

6.    If you need to respond, use a consistent and competent spokesperson:  I often advise that artistes, should as much as possible, focus on their art, and minimize engaging with key partners on corporate brand issues. Just as with getting a good lawyer and finance managers, it is important to engage a good PR Manager, agree a communication strategy that is consistent with your brand, then get the hell out of their way at let them do their work.

I believe some of you may be thinking about the costs, but there are bootstrap ways of innovating around that challenge- more in subsequent posts.

7.       If you need to respond, be careful about throwing people under the bus:   Another way of saying this is; try not to burn bridges, or I could say; fight all your personal  fights in-house, before coming to fight your corporate fights out-house … the team is always bigger than the individuals that make it up; finally Leadership -whether by Manager-ship, Co-Owner-ship or Chairmanship- should be about taking responsibility, not hanging out scapegoats to dry, I am not saying that is what happened in this case, but I hope you get the point.

Meanwhile, while we are on the topic of scape goats- there’s a question that’s been nagging at my mind, which is:

How do you suspend a producer?  I’m thinking: No producer, no production; no production, no product; no product, no packaging; no packaging, no promotions,; no promotions, no purchase… no pay… So  I  ask again: how do you suspend a producer? Answers, anyone? :)

#Business Planning 101: How To Prepare A Credible Business Plan

Over the past seven years, I have been involved in preparing business plans for clients across different industries ranging from Building & Construction, Agriculture, Media & Entertainment, Renewable Energy, Fashion and Education amongst others.

While I have grown to understand that  there are some, probably more critical fundamentals than a business plan, including an understanding of the customer needs/wants,  the company’s value proposition, the business case  and the business, I find that a business plan remains a minimum requirement for any entrepreneur, business or organization seeking to attract high level support, from investors, grantors and technical partners, among others.

A few days ago, I got a referral to a client who is interested in developing a business plan for His business initiative. Like many of my clients, they had significant knowledge, skill and/or experience in the relevant business industry. He needed my help in articulating and communicating the business idea   to His key customer and investor audiences.

Unlike most of my previous clients however, He wondered how the business plan could be made to appear more credible, as it related to who prepared it- in this case, me.

In response to His query over the phone, I gave Him a simple answer to His question which may be summarized thus:

• ·         Business planning is not a profession or professional endeavor like Accountant, Auditor, Builder or Lawyer (which I am)
• ·         Increasingly, everyone and anyone, who seeks to launch and/or attract investment for their business, is expected to be able to prepare a business plan.
• ·         The credibility of a business plan is in the research behind the business plan and the PLAN of the BUSINESS itself.

The more I thought about this though, I realized that while this concern was new in my experience, it was very likely a question many business owners were asking, even if they were not articulating.

I knew that my answer, while sufficient for my client, might not be for some others. Thus, even after our early morning conversation, I asked myself the question again; “What makes a Business Plan Credible?” Below are answers some of the answers I arrived at:

i.                     Business Feasibility:  A properly conducted feasibility is the official claim of credibility for any business venture that is still ventured upon after the conduct of an objective feasibility study.

ii.                   Business Model: A good Business plan should be a detailed interpretation of the Business Model; this covers the building blocks of the business including, customers, value  proposition, key resources, key partners,  sales channels, customer  relationships,  operational costs and revenue streams.

iii.                 Business Market:  A credible business plan shows an understanding of the market i.e. what is the size of the marker? Where are the opportunities? What are the challenges? What are the growth prospects? The answers to these market questions are critical to demonstrating credibility.

iv.                 Business Team: the most experienced venture capitalists invest in the team of people who are responsible for implementing the Business idea. It’s great to have a business visionary with a great idea and personality, but it’s even more critical to have a strong start up/ development team; i.e   what is their level of knowledge, skill and experience? What is their passion for the Business/industry? In this phase, it is critical to highlight the relevant achievements of the team.

v.                   Business Competition: Strategy is mainly relevant because of the existence of competition. Competition also includes substitute products; e.g Water as a substitute product for Coca Cola or and Public Transport as a Substitute for private cars; A credible business plan highlights a sound understanding of the Competition and how to gain competitive advantage over them; either through  your business  concentration, business costs reductions or my personal favorite, business differentiation.

vi.                 Business Risk: The risk analysis section of a Business plan, while often neglected, is one of the most critical components of the Business plan. It demonstrates that the Business owner is not overly but cautiously optimistic, is dealing with the plan realistically and would be better prepared to deal with challenges that may arise.

vii.               Business Assumptions: Assumptions are the bedrock and basis of interpretation for your business plan. According to personalmba.com “Critical Assumptions are facts or characteristics that must be true in the real world for your offering to be successful.” While assumptions apply to all the components of a Business plan; they are usually applied more to the financials. They usually cover things such as market size, market growth rate, interest rates, tax rates, depreciation e.t.c We can talk more about these later, but for now, as much as is possible, make your assumptions dependent on real market/industry research.

viii.             Business Financials: This is the core of the business as it relates to potential investors. It should at the very minimum capture    the Balance   Sheet (for existing businesses), Start-up requirements (Budget), Cashflow Analysis and Break-even analysis.

So, assuming you have, like my client, asked the question “How do I prepare a credible business plan?” do the above answers answer your question?

Please share your thoughts.

Photo Credits: Alexander Stein for pixabay.com 

#Opportunity- Towards an Agenda for The Nigerian Creative Industries

 

Are you interested in the Nigerian Creative    Industries? You should be- they are one of the fastest growing sectors of the economy and have immense potential to address issues such as national development and youth unemployment among others.

One of the challenges being faced in the Nigerian Creative economy though is in our ability to understand, organize and tap value from it, in a way that is mutually beneficial for all- creators,      distributors, regulators and users.

The need for developing a national creative industries    strategy for Nigeria has been identified by The British Council   and Gen Talks Creative. With the support of First bank, they are working with stakeholders in  the creative industries to explore the following:

·         The profile and dynamics of the creative industries in Nigeria: what is happening, trending and moving the sector forward

·         YOUR aspirations for the creative industries – such as your professional and business interests or your dreams for a specific sector, city or region

·         YOUR perspective on what the sector needs to develop, grow, innovate and make a real difference to the economy and society of Nigeria.

In the light of this, an online platform has been launched www.gentalkscreative.com. The objective is to aggregate input from  stakeholders on various creative industry sectors including advertising, Broadcasting, Film, Publishing, Software & Gaming.

As it happens, I am a moderator in the design category. Thus, I am particularly interested in hearing from those interested in  design,  designers of all kinds, engineers, industrial designers,  product  designers e.t.c.

Over the next few weeks we would be asking a series of questions to  guide the conversation.

Today we are asking;  How can we mobilise a new generation of design practitioners who collectively can find design solutions for Nigeria?

Please follow this  link http://bit.ly/1pUI7D8  to share your thoughts-

Thanks in advance.

#OP-ED: The Nigerian Creative Industries - Tackling The Challenges

In recent times there have been numerous reports about the relevance of the creative industries to the development of National economies.

It has been reported that world trade in creative goods and services is one of the fastest growing sectors of the global economy, doubling from 2002 to 2011, when it reached a record of US$ 624 billion. At the same time, developing countries averaged 12.1 per cent annual growth in the export of creative goods and services.

According to United Nations Development Programme (UNDP) Administrator, Helen Clark,  “The cultural and creative industries are important engines of economic growth. They generate jobs and income and contribute to individual and community well-being in both developed and developing economies”

In Africa, the creative industries have experienced immense growth in the past decade. An October  2013 Business Day article reported, Oby Ezekwesili, the former Minister of Education and former Vice President of the World Bank, Africa,  as valuing  Nigeria’s  creative industry potential at over N5 trillion with annual turn-over of over N500 billion- indicating that it could be a bigger asset than the country’s oil industry.

With all of the optimism being expressed, the potential of the creative economy is not without its challenges. In this post, I aim to highlight some options for tackling the challenges facing the creative industries; before that though, just in case you’re wondering “What, exactly are the creative industries?” and “Why are they important?”

#101 SERIES: Dear Nigerian Blogger - Avoiding Intellectual Property Pitfalls

Two days ago, I came upon some reports  that a journalist, Aye Dee, successfully got Google to takedown infringing content on the popular Nigerian blog lindaikeji.blogspot.com. (Linda Ikeji, in case you don’t know, is a Nigerian blogger, whose blog page  is among the 10 most visited sites in Nigeria.

Apparently, there has been some backlash against her on social media- as indicated by comments and other reports. It is difficult not to wonder how much of this is due to disapproval of what some feel she represents, what some might call “beef” and how much of it is really concerned with the issue at hand i.e. copyrights and related infringements.

Yesterday, Linda, in her characteristically un-fazed manner, responded to the issues in a long rebuttal. Her reply may be summarized as follows: 

• She did not infringe on Mr Aye Dee’s rights because she has never been to his site.
• 1.       The real reason Aye Dee & co are raising this claim is because they are  “haters”  trying to take her blog down_ because
  

OP-ED: Africa: Between Current Challenges And The Need For Educational Innovation

In previous write ups I have highlighted the importance of education to innovation. In this one, I intend to draw attention to the importance of innovation in education. This write up begins with the relationships between challenges and opportunities and how these can stimulate innovation.

Two major challenges which have hit Nigeria in recent times are the rise of insurgency and more recently the Ebola Virus Disease (EVD). In processing the immediate impacts of these, in terms of loss of lives and liberty, it is easy to lose sight of the impact it is having on other sections of the socio-economic polity. One sector being seriously impacted is Education.

OP-ED: Connecting Law, Entrepreneurship And Innovation

Last weekend I had the privilege of speaking at the National Open University during the Law Week Dinner of the University's Law society. While I had been nominated in view of my experience with intellectual property law, I was given a blank check to speak on any topic of my choosing. I used the opportunity to speak on a range of things that were within my areas of interest, in a way that was relevant to them. Below are some of the key insights I shared.

Let’s begin with some working definition of the key terms: 

• Law: A rule defining correct procedure or behavior for individuals, businesses, organizations and societies.

• Entrepreneurship:  The process of starting a business or other organization. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure (Wikipedia).The entrepreneurial mindset is usually characterized by risk-taking and innovation.

• Innovation: A new method, idea or product; a new thing, or a new way of doing an old thing.

• The need for regulation to guide a business environment becoming increasingly complex

#101 Series: Protecting Your Ideas: An Introduction to Non-Disclosure Agreements

One of the aims of this blog is to aid the understanding and creation of Intellectual Property (IP). Intellectual Property refers to creations of the mind that may be transformed into a functional, visual and/or artistic form for the benefit and enjoyment of others.  One of the key goals of Intellectual Property Law is the protection of ideas by the owner.

Ideas may be protected by various means; by copyrights in the case of a literary or artistic work, by a patent- if you are an inventor who has created a functional product, a trademark   for your logo, product or cartoon character, or by a registered design for the way   a product looks.

Regardless of what type of intellectual property you are protecting, there will be a need to share your ideas with some people such as investors, technical partners or promoters, before the product gets to the market.   At this stage, issues like confidentiality, non-circumvention and non-disclosure become important.

Many years ago, I submitted a proposal to a Finance Company in response to an open Request for Proposal (RFP).  The lady who received my proposal was really pleasant, and I was really hopeful.

After awaiting feedback for what I figured was too long a time, I decided to approach someone in the company who ought to know about the RFP. He came back to me saying he didn’t find my proposal in all the submissions. However, he saw a proposal which was almost identical to mine (as per the copy I showed him), and it had been submitted by a company the husband of the pleasant lady worked for.

OP ED: Nigeria's New National ID Card, What's A Nation's Identity Worth?

One of the high points of the news in Nigeria last week, was the announcement of the New National Identity Card launched by the federal Government, through the Nigerian Identity Management Commission.

The card allows handlers effect payments and other financial transactions, stores their biometric data  and also serves as a means of identification. The cards will be issued to Nigerians, 16 years and older, and are expected to serve as voting cards in the 2019 elections.

While it was flagged off by the president himself with a lot of fanfare and enthusiasm by its core sponsors and promoters, it was greeted with outrage

Op-Ed: On African Innovation: Where Do We Begin?

             

In the first installment of this series on African Innovation, I sought to establish the fact Africa was ripe for innovation, if necessity was the mother of invention,   and that African innovation, need not be high-tech. In the second part (read here), I asked the   question:  Can African Innovate? My preliminary answer : Africans Innovate, therefore Africa can innovate, IF…

The “IF” introduced a series of preconditions, which would be critical for driving relevant African Innovation. 

In this edition, I would like to address one of those pre-conditions by asking the question, where do we begin? 

In order to get “there” however, a little digression: a few days ago I read some refreshing news about two Nigerian female students who had won an Award in the Medicine and Health category, of the Intel International Science & Engineering Fair, in LA. They had found a solution for bad breath using walnuts. They actually came up with an hypotheses and tested it by conducting structured research into it leading to  an innovation that solves a problem which according to them is  faced by many of their peers.

They were secondary school students (Doregos Academy), just like the other young girls (Where are the guys?) the ones who powered a generator using urine.

This story was refreshing in and of itself, but it further served to reinforce my belief that African Innovation must begin with Africa’s Education.  We cannot change a people until we

Dear Artiste: Ten Questions To Ask Before You Sign That Recording Contract (Conclusion)

In the first installment of this article (you can read here) I highlighted the first three questions:

• What do I really need from the record label?

• What is the scope of the contract?

• What costs are recoupable by the record label?

In this second and final installment, helped by a warning from my Editor to conclude the  post and to avoid “to be continued write ups” in the future, I’ll jump right into the last seven questions to ask: