Ep 22 Michael Simeon

My guest today is Sangu Delle. Sangu is an entrepreneur, an investor, author, and someone who is deeply rooted in Pan-African ideology. His latest book Making the futures: Young entrepreneurs in a dynamic Africa explored similar themes and topics that I've often explore on this podcast. So it's not surprising that we started the conversation in this episode talking about the book. We discussed the challenges and opportunities of building a business in Africa. We also deep-dived into the competitive advantage of raising capital and having a longer runway as a startup, the outsized importance of foreign venture capital in African early-stage businesses and the role of government in facilitating a successful startup ecosystem. This episode is packed as we move from one serious topic to another. I hope you enjoy it as much as I did.

On this episode, we spoke about

• Sangu’s book and why he wrote it
• His investment thesis on Africa and her economic growth
• Why it's not the best ideas that win and find out what wins
• The relationship between reputation, intentionality and luck(grace) and their impact on the probability of success
• How philanthropy and unhindered dreams helped him achieve his goals
• The outsized importance of government and foreign investor in facilitating the African startup ecosystem.

Recommended book

Guns, Germs, and Steel: The Fates of Human Societies By Jared Diamond

My guest today is Andrew Alli. Andrew is a real-life and virtual mentor to a lot of investment professionals in Africa. He is the Partner and Group CEO at Southbridge a pan-African financial advisory firm. Before then, he was the president and CEO of the Africa Finance Corporation, where he was responsible for over $4,5 billion of investments in 30 countries. Andrew's career is an inspiration and signpost to upcoming African investors like me, and it was a real pleasure to deep dive into how he got started and the lessons learnt till date. We also talked about how to reduce investment risk through temporal and geographical diversification in portfolio construction and the importance of a strong ESG framework in a weak socio-political environment that most African countries operate. I really enjoyed this conversation, and I hope you do too.

In this episode, you'll learn

• The importance of numerate and logic skills as a good basis for career optionality
• What it means to be an investor in Africa, despite the obvious contradictions and challenges
• The role of boards in corporate governance
• The importance of ESG in mitigating investment risk

Recommended books

• World Order: Reflections on the Character of Nations and the Course of History by Henry Kissinger

Andrew's twitter handle - @afalli

My guest today is Eloho Gihan-Mbelu; she is the founding Managing Director & CEO of Endeavor Nigeria. Endeavor is a mission-oriented, global organisation that is supporting high-impact entrepreneurship in close to 40 underserved markets across the world.

Eloho and I got introduced a few years ago when she started her role with Endeavor Nigeria, and I find her intellectual honesty very refreshing. You can get more of her thoughts on her twitter handle @elohoGM. In this episode, we discussed her early career journey as an investment banker and then in private equity focussed on African growth companies. We discussed her perspectives on the infrastructural and the regulatory challenges of building a startup to scale up in Africa. We also discussed the opportunities that COVID presents for accelerating digital demand on the continent. And how to set up a board at different stages of company life. I hope you enjoy this episode as much as I did.

In this episode, you'll learn...

• Why did Eloho choose to work with Nigerian companies?
• The two key factors that contributed to the growth of the African startup Ecosystem
• Formulating investment thesis for growth-stage companies in Africa
• There are numerous infrastructural and regulatory challenges to building a startup to scale up in Africa...what's her take?
• Infrastructural, regulatory and macroeconomic challenges of building a company in Africa
• The difference between startups and scaleups
• What is the right size for a board of a growing company?
• Her tested methods for making the most from your board meeting

Timestamps

(03:00) Her journey to Endeavour Nigeria, why she wanted to work with Nigerian companies.

(15: 22) How resilience helped build the African startup market

(27:32) Factors founders need to consider in making the right decisions in the face of competition

(31:07) Her thoughts around how to set up a board of directors at different stages of a company's life.

(33:57) How board members should be engaged to get the best results

(43:00) What she thinks is the right support that businesses need

(48:52) Her approach to achieving a healthy work-life balance

(51:12) Her current reading list and the new perspective she has recently garnered about business

Books she's currently reading

Water dancer by Ta-Nehisi Coates

The hard thing about hard things by Ben Horowitz

Social Media

@ElohoGM

My guest today is Tokunbo Ishmael. She's the co-founder and Managing Director of Alitheia Capital, an African focussed PE and VC firm. Alitheia Capital investments include businesses that enable the provision of financial services to the unbanked, and underbanked through traditional and branchless banking models. Alitheia Capital focuses on doing social good and also having a good return on investment.

Tokunbo Ishmael is an alumnus of London Business School, and the University of London, she's a chartered financial analyst, and she used to be an investment banker before starting Alethia. She's a member of CFA Institute, she has sat on several boards in the different organization across Africa, including First City Monument Bank in Nigeria, and the African Venture Capital Association.

In this episode we discussed...

• Why Alethea capital is both PE and Venture capital
• The necessity for developing the ability to reason and present a sustainable argument on the basis of numbers
• Parallels between early 2000s dotcom burst and the disruptive impact of COVID on startup investing
• Key success factors for surviving as an entrepreneur during unpredictable times 
  • be grounded on core mission but flexible to make opportunities out of the current challenge
  • rethink the value you're bringing to the table
  • understand their existing developmental gaps and where to collaborate to fill up the deficiencies
  • amplify their powers and use that to innovate and re-imagine themselves
• On discovering the riches at the bottom of the pyramid by building essential goods and services for the mass markets
• Why entrepreneurs should expand their view to stakeholder value creation and not just profit

Books

• How Women Rise: Break the 12 Habits Holding You Back - Sally Helgesen and Marshall Goldsmith
• Conscious Capitalism: Liberating the Heroic Spirit of Business - John Mackey

My guest today is Eric Idiahi. Eric is the co-founder and partner at Verod Capital, a private equity firm based out of Lagos Nigeria. Verod is one of the top PE firms in the continent with a significant number of successful exits as well as admirable money multiples record from their previous fund. Eric is someone I've known from a distance, so when we met at a dinner late last year I invited him to be a guest on this podcast and he graciously obliged. In this episode, we discussed how he and his partner, Danladi, started Verod in 2008 by working with other investors on a deal by deal basis. We talked about the fundamental differences between PE and VC model, especially the way it's done in Africa, how to maintain a balance between portfolio support, value creation and investor control. We discussed exits and how investors can think about it and position their portfolio companies for that event. And of course, we discussed COVID, what it means for businesses in Africa and how to frame its inherent challenge and opportunity. I hope you enjoy this conversation as much as I did.

My guest today is Nnena. Nnena is a Principal at Digame Investment, a growth capital investment firm that back tech-enabled businesses in Africa. Their portfolio companies include GetSmarter an online education company based in Cape Town and London that work some of the top global universities to offer premium online short courses to working professionals around the world. GetSmarter was acquired by 2U in 2017 for $103m, demonstrating that the possibilities of a successful exit.

We talked about the key difference between the venture ecosystem in Africa and the silicon valley or Europe in terms of startup valuation, capital allocation, returns expectations and timelines. We also spent the time to discuss how COVID is creating both opportunities and challenges for startups in Africa. Why execution matters in building a startup

This is the second part of my conversation with Yele Bademosi, you can listen to the first part of this conversation in the last episode of this podcast series. Apart from being the founding partner at Microtraction, Yele is also the founder and CEO of Bundle a social application for cash and cryptocurrency transactions. Yele is the first person I go-to for any question I have on blockchain and cryptocurrency.

In this episode, Yele and I discussed his previous role as a director at Binance LB and his highly optimistic views on blockchain and cryptocurrency in Africa. We also discussed his thought on credit and other alternative funding instruments for tech startups apart from equity. I hope you enjoy this episode as much as I did.

In this episode we discussed

• How economic development in Africa is like telephone technology
• Capital formation, advantages of blockchain technology and how value is created through crypt(12:54)
• The role of credit in the African tech startup ecosystem (18:59)
• How to build an organization; learning from the Binance Model (28:15)

Quotes

• Credit is taking a bet on the future
• Culture is important, but organization structure is as important

Recommended Books

• Loonshots
• Traction
• High output management
• The libertarian mind
• The lean startup

My guest today is Yele Bademosi. Yele is the founder of Microtraction, an angel investment platform that funds Africa’s technology entrepreneurs in their early stage. Microtraction is one of the most active pre-seed investment firms in Nigeria.  Yele and I have known each other for some time. We’ve worked together closely in the past, when he became the first person to join my previous company, Starta, barely a few weeks after it was founded in late 2015. It is quite fitting that Yele is the first guest on season 4 of this podcast after a long break. We recorded this episode in late 2019, before COVID, so a lot of the things we talked about might be out of kilter with the current post-COVID world realities. This is the first of the two-part interview. In this episode, we talked about how he started his career and why he left medicine to pursue a whole different path. We also talked about leadership, growth and how good relationships often create a funnel of positive serendipity. I hope you’ll enjoy this episode as much as I did.

In this episode we discussed;

• How he left medicine to pursue his Startup dream
• His first idea for the Nigerian market and why it failed
• The hype around blockchain and the possibilities it holds for the African startup ecosystem
• Yele's definition of success and what growth looks like in tech startups
• If regular management hacks can work for the new tech startups
• The role good relationships played in his journey and what it means for upcoming generations
• The two things new tech founders should focus on in their early stage and why

Venture-backed startups are disrupting existing business models, redefining market potentials and creating new verticals. In Africa, startups are finding innovative models for addressing underserved market segments, repurposing under-utilised resources and facilitating efficiencies and visibilities where none exists before. These companies have catalysed wider conversations, policies and actions from both government and non-governmental institutions on how to leverage democratised access to technology and innovation across the continent. Although the long-term 'financial success' of these companies is still yet to be proven, their potential impact on market opportunities and social benefits in Africa is undisputed. 

We have now come to the end of season 3! It has been such an exciting journey, one I hope you enjoyed as well. Please listen to my review of the season, what you can expect from next season and when we will be returning.