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To disclose, or not to disclose: Striking the right balance when making a case for your business

by Efe Ukala

As promised in Navigating The Catch-22: Successfully Fundraising For Your Business, this segment discusses, in detail, the nuts and bolts of confidentiality agreements. Also referred to as Non-disclosure Agreement (NDA), the NDA keeps certain aspects of what an entrepreneur will discuss or disclose with a potential investor a secret.

While an NDA is an important document that helps protect your new venture’s confidential information, entrepreneurs should endeavour to strike the right balance between protecting their business secrets and sharing relevant information with potential investors to attract capital or other resources.

1. Timing is everything: Relationships come first

Indeed, the know-hows of your new venture might necessitate the execution of a NDA. However, this does not mean that you should walk into a potential investor’s office for the first time offering a NDA as a substitute for a handshake. This singular act may, in fact, be counterproductive as it may scare away savvy investors! The use of the words “scare away” is intentional. Indeed, this choice of words begs the question, “Why would a potential investor be reluctant to sign an NDA, if they do not intend to breach the agreement?” A few answers are listed below:

Most potential investors sit on numerous pitch competition boards. They encounter numerous entrepreneurs in their professional lives and are often asked to sign NDAs. Consequently, your NDA may be number 500 on the request list. As such, a potential investor’s reluctance to sign your NDA may not be because they intend to disclose your trade secrets, rather, it may be due to the practicality of keeping track of thousands of NDAs that they receive.
From a practical standpoint, it gets really challenging to track thousands of NDAs especially where entrepreneurs submit pitch decks with similar ideas.
Investors are not only attracted to an idea but to other factors such as your team, track record, probability of success etc.
Given that NDAs are important legal documents, investors will often want their lawyers to review these documents before they sign. This costs time and money—two things that have huge opportunity costs for an investor.

Notwithstanding, if you are concerned about a potential investor’s ability to protect your confidential information, you should vet them. This can be easily done by utilizing your networks to find out more about a potential investor. If you are not satisfied with the results of your due diligence, then consider safeguarding your proprietary information.

You have to strike the right balance between keeping your business know-hows a secret and attracting investors. The free flow of ideas is an important factor in further developing your product and raising capital. However, you do not need to disclose every minute detail of your business to an investor if you do not feel comfortable doing so.

2. Practical consideration when reviewing an NDA

When you get to the NDA stage, it is imperative that you carefully review the NDA, negotiate the terms, and participate in the drafting process. If there are provisions you do not understand in the NDA, don’t feel embarrassed asking about the intent of that provision. Below are a few items you should consider when negotiating your NDA:

Ensure that the party that signs the NDA has the authority to do so. Check to make sure that individual is an authorized officer of the company.
Ensure that the NDA details what the word “confidentiality” means. If the definition is too broad and contains everything under the sun, you might get a lot of push back from your potential investors. So, be practical about the scope of the definition!
In the same light, your NDA should clearly explain what doesn’t constitute confidential information. Remember, exceptions are equally as important as inclusions.
The NDA should also detail the manner of the disclosure that will be kept confidential. For example, will both parties treat oral disclosures as confidential information?
It is also important that you carefully think through your negotiation strategy during the NDA drafting phase and that you negotiate from a practical perspective. Spending too little negotiating a NDA might create an impression that you are not a savvy businesswoman. This perception may hurt your negotiating power with your potential business partner in the long run. On the other hand, overly negotiating a NDA might make you appear as one who might be difficult to work with. It is essential that you find the right middle ground. As a general rule of thumb, entrepreneurs should not negotiate past three drafts. More drafts may be required for an extremely complex project.
Treat the NDA negotiations as a pre-investment negotiation interview. During this stage, your potential investors are just getting to know you. This is your opportunity to show them that you are savvy businesswomen with excellent negotiation skills.
During the drafting phase, be cognizant of who will have access to the confidential information. Will all employees have access to the information? What third parties will have access to the information? All these considerations are important as they let you know the individuals that will be privileged to the information you have provided.
Your NDA should also list each party’s responsibilities or burdens.
Ensure that the NDA contains remedies that are reasonable.
Most importantly, research your potential investors or business partners to ensure that the individual or firm is a reputable and fair player in the market.

To summarize, it is imperative that you carefully consider the timing of requesting an NDA. When it becomes necessary to execute a NDA, carefully negotiate your NDA and ensure that you understand every word on the agreement before you sign on those dotted lines.

In the next segment, we will discuss the art of successful negotiation. If you would like insights on a particular topic, write to us! We are listening.

Navigating the catch-22: Successfully fundraising for your business

by Efe Ukala

Once you have successfully registered your new venture and executed your partnership agreements, the next phase is getting your new venture up and running. For some, this might not be an issue as you probably have sufficient savings and contributions from family and friends to commence this new venture. For others, the fundraising process begins!

Fundraising is not a task for the faint hearted, as it requires a high dose of patience, perseverance, tolerance, and politeness. However, while the fundraising process might require a heightened tolerance for frustration, it is imperative that you think beyond the fundraising process.

For example, you should not accept a potential investor’s offer simply because that investor has agreed to give you all the funds you need to scale your new venture without thinking through the possible impact that potential investor may have on your new venture or ownership structure. This segment details some important points that you should consider during your fundraising process.

1. Don’t let the cat out of the bag prematurely

During the fundraising process potential investors will ask you to share information about your new venture so that they can make an informed decision on whether or not they can provide you with the funds you require. Indeed, you have to furnish them with some of the information they seek.

Nonetheless, it is important you strike the right balance between your fundraising needs and safeguarding your new venture’s confidential information. You have worked hard to develop your new venture and create a niche for yourself, as such, while you may be in desperate need to fundraise, you should also think beyond the fundraising phase by safeguarding your new confidential information.

Moreover, of what use will the funds raised be if at the end of the fundraising process your new venture’s secrets has been disclosed to potential competitors who are now offering the same exact product you wanted to offer? You owe it to yourself and your new venture to protect your new ventures’ confidential information such as the “know-hows” of your new venture, the trade secrets, and all other information that makes your new venture unique. Thus, before you commence deep discussions about your new venture with a prospective investor, it is imperative that you sign a non-disclosure agreement (even if that prospective investor is a friend!).

Your non-disclosure agreement should: (i) be executed by all parties that you want to be bound by the agreement, (ii) identify the right legal entities and/or individuals that are intended to be bound while also indicating that representatives and affiliates will be bound, (iii) provide remedy in the event of breach, (iv) include a definition of what constitutes confidential information, (v) address the term of the non-disclosure agreement and what happens at the end of the term, i.e. whether the investor has to return the confidential information to you or destroy it.

Indeed, executing a robust non-disclosure agreement with an investor does not prevent such investor from breaching the agreement. As such, protect your new venture by taking the extra step of researching each potential investor to ensure that such investor is a respected and professional player in the market.

2. Think carefully, pick selectively

You must carefully select an investor. Yes, the order of the previous sentence is intentional! In a world where financing is not infinite, entrepreneurs often feel very lucky to find an investor who is willing to invest in their business. While the feeling of immerse gratitude is not misplaced, it is imperative that entrepreneurs also carefully select their investor. Do your due diligence on your potential investors! Remember, an investor’s investment is never “free”! It often comes with numerous strings attached.

Oftentimes, these strings are good strings in that they bring value to the new venture. For example, the investor may require you to adopt environmental, social, and governance policies, or anti-money laundering policies. Such requirements are valuable additions as such changes could translate to higher returns for your new venture.

As such, before signing those dotted lines, entrepreneurs should consider the investor’s track record and reputation in the industry, the investor’s proposed economic rights and governance rights and whether such economic rights are proportional to the investor’s proposed investment, the factors the investor considered in arriving at its valuation.

Think of your investors as long-time business partners—you may be married to them for a long time. So, think carefully and pick selectively!

3. Don’t jump to the finish line

So you are extremely excited that you have selected the right potential investor and strongly believe that the potential investor will invest in your new venture within a few months. Indeed, you trust your intuition on this because your intuition always leads you to the right path. As such, you believe that the next logical step is to email all your new venture agreements (shareholders’ agreements, share purchase agreements etc.) to the potential investor while they conduct their final review process so as to streamline the process. Please Don’t!

Wait until you hear from your potential investor that they have decided to strike out “potential” from the words “potential investors.” There is no point jumping to the finish line and investing resources by drafting agreements that may not be eventually utilized. Moreover, your investors might have a preference for providing the definitive agreements.

To summarize, the fundraising process is not a task for the faint-hearted. While you may have an urgent need for working capital, you should also ensure that you safeguard your new venture throughout the process. The success of your new venture also rests on your ability to protect your new venture’s confidential information.

In the next segment, we will discuss the non-disclosure agreement in detail. If you would like insights on a particular topic, write to us! We are listening.

8 things we learn from the acquisition of Kenyan beauty brand, SuzieBeauty

by Bridget Boakye

In 2011, Suzie Wokabi, founder of Kenyan cosmetics brand, Suzie Beauty, said the following about her vision for her brand: “My dream is to turn SuzieBeauty Limited into a household name for everything beauty on the continent, and internationally. I want to become the MAC of Africa!”.

Six years before that, she had returned to Kenya as a trained makeup artist looking to stock up on goods. She faced a number of challenges such as not being able to find the high quality brands she was used to. Where she was able to find them, they were often unavailable, overpriced, or counterfeit. So in 2009, Wokabi launched her own local brand.

Seven years later, she is in reach of the vision she set out for her company. On January 25th, 2016, SuzieBeauty announced that it has been acquired by regional manufacturing company, Flame Tree Group, pending approval of the competition authority. Suzie said the following about the sale of her company: “For me this is the biggest milestone so far.”

Wokabi explained, “with the resources at Flame Tree Group, SuzieBeauty will likely expand its range to include skincare products such as cleansers, moisturisers and eye creams. There will also be investments into better distribution and marketing. In the long-term, production could be moved from China to Kenya”.

This wife, mother, daughter, and entrepreneur is trailblazing the way for other Motherland Moguls. There is so much to learn from the successful sale of Wokabi’s company. We’ve narrowed it down to just 8.

1. Do your research

In choosing to start a beauty brand, Wokabi did extensive research on the Kenyan beauty market. In an interview with How We Made It In Africa, Wokabi said the following: “My research shows that the development of products to fill our specific market needs has the potential of becoming a big and profitable business.”

She also did extensive testing of her products in the market before launching her business. She developed her product line and spent a year of testing on the market before launching in 2011 and beginning retail operations in 2012.

2. Choose to work in your passion

Wokabi once said, “If I did not completely love everything about SB and the beauty industry, I would have given up a very long time ago. I now understand why most startups fail. When you don’t have the passion and everything is an uphill battle, it becomes so easy to quit.”

3. Dream BIG

From the start, it is clear that Wokabi had a strong vision for her company and brand. From her early interviews before the launch of her product line to more recent ones, the vision has always been, as she said, to “distribute Africa-wide. The sky is the limit”.

4. Know your magic

While strong on quality products, Wokabi has said time and time again that the affordability of her products is what makes her competitive in the local and international market.

When she was asked if SB stand out in the midst of international beauty brands that had recently entered the Kenyan market? She responded, “None of them will ever beat me in price. The whole point of SB is the affordability of quality beauty products.”

5. Get help in your weak areas

Wokabi says she knew nothing about business prior to her endeavor. She has especially struggled with financials, an area her husband has supportive in.

6. Learn from your mistakes

While successful, Wokabi has never shied away from the mistakes and mishaps in her journey. After some false starts with partners, Wokabi made sure to engage differently with future partners.

She explained: “We have had so many bad partnerships. We have had both equity partners and debt investors. There were just too many mistakes made. We were very particular about this one. This time we didn’t make any mistakes – and it feels right, completely.”

7. Engage with investors and finance partners who understand your company and your vision

While in talks with Flame Tree Group, Wokabi was in talks with other potential investors. She had this to say about Flame Tree Group: “The chemistry has always been right from the beginning. So any challenges we ever came across, we would fix together.”

Flame Tree Group CEO, Heril Bangera, also had this to say, “We want to increase the brand’s presence in the market. We have seen the brand is successful, so there is an opportunity now to use that as a base to grow it within Kenya and beyond.”

8. Knowing that someone did it helps

Wokabi often mentions her role models, Bobbi Brown, in interviews. Bobbi Brown was an American professional make-up artist who founded Bobbi Brown Cosmetics. Estée Lauder, the America beauty products giant, bought the brand in 1995, with Brown retaining creative control. Wokabi will similarly retain creative control of SuzieBeauty.

We wish Wokabi, SuzieBeauty, and Flame Tree Group much success in their new venture. What other insights have you learned from this acquisition? Share them below.

Archel Bernard kickstarts her Liberian ethical fashion factory

by Afua Osei

Archel Bernard is a Liberian fashion designer and entrepreneur. She successfully raised more than $40,000 on Kickstarter for her company’s growth and shares with us how someone stealing her ideas got her started in fashion, her ambitions to build a global brand and why crowdfunding was the way to go to raise much needed cash.

Why did you choose fashion as your avenue to make a difference in Liberia and how has your business made an impact on the local community?

I wanted to be the West African Oprah Winfrey when I moved to Liberia. I would go to communities and shoot and edit videos of exciting things happening around Monrovia, and of course the West African Oprah had to wear West African clothing! I made my dresses at a trendy boutique in town, and the seamstress would take FOREVER to get my clothes to me. I was doing my own designing because traditional African clothes aren’t typically my taste.

One time I went to pick up a dress the boutique had been working on for about a month, and when I saw her, she was wearing a copy she made for herself, another customer was wearing a copy she just purchased, and another tailor was sewing one for her to sell on her racks! I still had to pay top dollar for a dress she was taking credit for designing. At that point I realized I could figure out a way to do everything I was paying her to do for me, AND possibly make a profit from it if people liked my styles.

I made 8 different styles, found two tailors, and paid them a small fee to make my first line. I didn’t even know I was creating a line, much less a company. I just thought I could make a little money around Christmas. I sold out of everything and used the feedback (and money) to make more styles. Two of those same looks are still our top sellers today!

I was never inspired to create until I came to Liberia. I loved the bold colors and patterns. The chaos in the markets and streets, and always the women wore bright lappa to navigate it. Seeing and wearing African cloth made me feel at home. I was thrilled by the design possibilities because from where I sat, we could do much more than tie lappa around our waist.

Two months after selling my first dress, my government contract ended and I was unemployed. My mom hired me to be her driver on a visit to Liberia, and my dad gave me his pick up truck, so I bought cloth with the money and sold dresses from the back of the truck. Slowly, I saved enough money to open a shop. I’ve worked all kinds of jobs to make this happen.

Now our business has grown so much, our tailors get sad when I leave town, not because they will miss me but because when I’m in town there’s always a ton of money to be made!

What are your ambitions for your company and The Bombchel Factory?

I want to build a large factory that staffs and trains hundreds of Liberian women, and offers classes on the side for literacy and business skills. This is about community building and industry changing.

I want our factory to rival not only rival China for quality, but be the best in the world for human development. I want clothes made in The Bombchel Factory to be sold everywhere from Nasty Gal to Bergdorf on Fifth Ave soon, to prove that there is space for quality, ethical fashion in the most exciting shopping districts of the world.

Why did you choose crowdfunding as a fundraising strategy for your business?

I chose to crowd fund our company because we had hit a point where we couldn’t grow anymore doing the same thing we were doing: small custom orders for under $100 a client. We wanted to reach the everyday girl, but customer acquisition was expensive and there wasn’t much profit in a few custom orders a month.

I’m incredibly scared of loans, after having already signed my life over to Sallie Mae years ago, and I don’t think we are big enough to start including investors with equity. Since all we needed was a strong following to preorder our goods, crowdfunding was perfect for people like us.

Everyone who backs our campaign knows to expect a wait before receiving their goods, so that gives us a chance to perfect our items and plan our website and New York Fashion Week launch party. We are using Kickstarter to literally explode onto the market, and Kickstarter is good for helping you build a loyal following.

What factors did you take into consideration before starting the crowdfunding campaign and how did you prepare to make sure it was a success?

I had a friend, Chid Liberty of Liberty & Justice factory, also do a Kickstarter for his t-shirt line. He was actually the person who recommended crowdfunding to me.

When his campaign launched it was flawlessly executed. They met their goal in a few hours and even got endorsements from several celebrities. I knew I didn’t have that kind of reach, but I also knew I had a lot of things going for me that I could package. I read every article and watched every video on having a successful crowdfunding campaign and applied what I could.

My best friend in Atlanta offered a great photo shoot deal, and my sisters have been known to work long hours for clothes, so I knew my packaging would be spot on. I had a ton of people interested in ordering my designs, but I needed to streamline the ordering process and show the need for my product would gain the same results as having a large network. Crowdfunding has proven I have a market, not just cousins and friends who want to support me.

What message would you share with other young African women who have big dreams but limited funding to make them happen?

I would ask you the same questions Chid asked me:

You need more money? Yes
You don’t want a loan? No
You don’t want equity partners? How much is your business worth? Not enough
You ever thought of crowdfunding?

You can ONLY use Kickstarter if you have a product. I would also make sure you have thoroughly tested the market, as you don’t want to pre-sell items and not be able to fulfill quality orders. Reputation is everything and that would kill yours. Just prepare, and prepare some more, and keep going because your (company’s) life really depends on it.

Want to support Archel and her Kickstarter campaign? Make a donation by March 11.

Photos courtesy of the New York Times and Archel Bernard.

10 things I learned about pitching to an investor

by Joy Akinfenwa

She Leads Africa recently had a free webinar session with Andrea Barrica on the fundamentals of pitching your business – The Do’s and Oh No She Didn’t of Investor Pitching.

Andrea Barrica is a Venture Partner at 500 Startups, a global seed fund and accelerator for early stage startups based in Silicon Valley. She was previously co-founder at inDinero, an accounting and taxes software solution where she led the team to the first $1M in sales in 10 months.

Here are ten things we learned from her.

1. Don’t try to pitch to all investors

Most of the interactions that you have with investors are not investor pitches. Most of the interactions that you have with investors are about how you can get the right type of investor who wants to hear about your company and is willing to hear about your pitch. When you have an investor who is interested, it is then time to have the investor pitch.

2. Differentiate yourself, be clear, and don’t overly pitch

Create a level of personal connection. People invest in people they like. Make it a conversation (never corner someone in a party). Keep it brief, and tell your story in 60 seconds or less. Understanding the market and asking questions and advice versus pitching the business is a great way to get investors interested. Be natural, authentic, and humble.

3. If you do not have an idea, investors will not be willing to invest

Support your idea, prove it out
Wait until you have traction and a great team
Wait until you really need the money. However, when you really need the money the most, the investor has all of the leverage versus having a great team and traction without the desperation.

4. Use your resources, networks, and community to find investors

Meet people — It’s better to meet investors when you’re not fundraising
Standard networking — get introductions from other investors
Go where investors hang out and then find the ones that you respect
Write — start writing your own blog and content

The key is running your business—it is important to build, go out there and get some traction. The first investors will be family and those you are close to.

5. When meeting investors, know who is going to be there, and how many people—know your audience!

The important thing to know about a meeting is that, no one is as interested in you as you think they are. You must be brief. Think about how to you make your presentation interesting. How will you make it unique?

6. If you want to stand out, work the room, run the meeting, tell a story

Make a personal connection, research the people in your room. Don’t make it to feel robotic; not too many slides. If people ask questions at the end and if what you presented was clear, that means that they are interested. Don’t leave asking: are you interested? Rather leave with: will you be willing in investing; how much will you be willing to invest?

7. The don’ts

Pitching is a conflict between what we say, what we mean to say, and what the person actually hears. What we say and what we mean to say is not what the investors hear.

Don’t: Create slides first

This is a bad way to start a presentation. So don’t rely too much on your decks and your slides.

Don’t: Be A 1 pitch pony. Don’t only have one pitch prepared

Have more than one prepared. Prepare for the different types of investors and what they may care about most.

Don’t: Forget the 20:1 rule

For every one minute of a presentation, practice out loud. Make sure the delivery and confidence is there.

8. The do’s

Do: Tell a strategic story

Tell a story that will help the listener understand something about your story that they didn’t before. How does my story help me to achieve my goal? It is important to ground out the things that you want people to know about you in short stories.

Do: Know your secret sauce

How will you win when everyone else fails? It is your differentiation.

Do: Know what is the most compelling thing about your business

Use this cheat sheet:

Traction
Team- past experience and your background
Product
Vision

Do: Pass the 60 seconds test

You need to get someone interested about your company in 60 seconds, no matter what industry you are in.

9. If you want to get in touch with foreign investors, build a great business

They will reach out to you. Make sure people know you. How so? Support local organizations. What are you doing? What problem are you solving? How do you understand the market?

10. You close deals

A great pitch deck and a horrible pitch won’t do anything for you. So how can you improve? Get together a small group of other young entrepreneurs and force yourself to practice consistently. Go out to new events and networking opportunities and keep pitching. You won’t get good unless you do it.

Take improv classes or acting classes. Have a few friends video tape you pitching and talk about ways to improve with your friends. The only way that you will improve is by giving and getting brutal advice—patting each other on the back, will not help.

Want to watch the full webinar? Check out the video below:

This is how you get and keep investors attention over email

by Ngozi Olojede

Entrepreneurs should always be on the lookout for investors. With Google at your fingertips, finding the contact details of a prospective investor has never been easier. That said, simply reaching out to them is not enough as there are several others like you, seeking their attention.

Follow the tips below, and you’ll soon be on your to snagging and keeping an investor.

The prep

1. Hun, are you even ready?

Before reaching out to investors, ascertain if you require external funding as meeting investors too early may undervalue your company.

Also, you would need a business plan to demonstrate the viability and profitability of your business idea.

Remember, investors are no fairy godmothers. They’re putting their money in to get money out.

2. Make a list of who you want to meet

Finding an investor goes beyond them cutting you a cheque. You need to research potential investors, how much money they typically invest in new businesses, the kind of ventures they’ve supported in the past, and the sort of industry knowledge they can provide you.

For instance, if you’re starting an e-commerce company, it’s a good idea to reach out to e-commerce gurus.

3. Engage with them on social media.

This ties into the previous step. Follow the top dogs on Twitter, read and comment on their blogs, watch their speeches for advice. If you know what makes them tick, would inform you on how to approach them.

Here’s a tip within in tip: In your email to them, reference a remark they made that gave you an aha moment. They’ll appreciate it, and you’d have gotten edge over your competitors.

#Motherland Mogul Tip: Refrain from sending invitations on Facebook or LinkedIn, because people tend to swerve on the randoms.

4. If you have connections, use them!

As competition is stiff, use every tools at your disposal. If someone in your circle, knows someone who knows an investor, tell them to ask their friend for an email introduction on our behalf.

Email introductions increase your chances of getting a response. But first, be sure to send your pitch to your friend to ensure your message doesn’t get lost in translation.

The Email

1. Identify yourself

Start by telling them who you are, what you do, and how you found out about them. If you were connected through a mutual acquaintance, mention it.

And remember: use the tip within the tip mentioned above to separate you from the pack.

2. Get straight to the point.

Mention the name of your business, it’s aims and objectives. Then summarize your business plan and the stage of your startup.

At this point, an investor will decide if your idea is worth pursuing or not, so be sure to be as clear and interesting as possible.

3. Provide additional info

Include a link to your business website or attach a pitch deck or essay that elaborates the service or product your business provides.

Also, state how your company is solving a teething problem and what sets it apart from its competitors.

4. Why them?

Investors want to know why they’re a good match for you and your business.

Consider what your business requires to reach the next growth phase, and use it to sell your point.

Also, peruse the prep steps above for help.

And of course, we’re not done…

5. Get the ball rolling

Round up your email by mentioning you’d love to discuss in person, and provide three suitable dates. Also if you have product samples, offer to show them at the meeting.

6. Pique their curiosity a little

Finally, if you’ve already met or are meeting a influential person, mention it! This would give you more credibility and make them pay attention to you.

But be slick about it because name-dropping is oh tacky.

Have you used any of these tips to reach out to investors? Did they help? Have you used others that have been helpful?

Young African women should start investing through equity crowdfunding

by Neku Atawodi

In 2015, investments in African startups grew by over 100 percent. Approximately half a billion dollars was invested, notably through large funding rounds for technology companies like Jumia, Konga and Takealot. Konga raised a $3.5 million seed round in 2015. The startup reportedly grew its 2014 revenue 450% from 2013. In 2014, Konga finalized a $40 million Series C round at a $200 million valuation.

While there’s no doubt that African startups are growing tremendously, we are also at risk of leaving an important sector of the society behind. Amid this impressive growth in technology startups, equity investments in companies founded or run by women are infinitesimal.

Imagine if you, yes you, lady, had invested in Konga in 2012 after founder Sim Shagaya accepted his first seed round, your portfolio would have done better than the Nigerian, Kenya and South African Stock exchange combined.

Impressive statistics right? Well, here are some not so great ones:

90 percent of women will have sole responsibility for their finances within their lifetime, yet 79 percent have not planned for this.
3 out of 4 elderly living in poverty are women (80 percent were not poor when their husbands were alive).
50 percent of marriages end in divorce (and women usually end up with the kids).
After divorce, a woman’s standard of living drops an average of 73 percent.
As of the year 2000, women are expected to live an average of 7 to 10 years longer than men.
Only 29 percent of women know where to invest in today’s market.

Of the world’s 1,826 known billionaires, only 197 are women. Studies show that the majority of women believe they don’t have the money, background or risk appetite to make angel investments. However new technologies and inventions have pushed the frontier for people from various financial abilities and backgrounds independent of gender.

Building an investment portfolios can help a woman take control of her financial growth and security and avoid dependency. Taking control in a world where the markets don’t care whether you are male or female can really build self esteem.

The richest women in the world hold their wealth in equity holdings in companies (whether inherited, worked for, or acquired- worryingly only 29 of the word’s 197 female billionaires are self made, the rest are inherited from husbands or fathers). Christy Walton, inherited a stake in retailer Wal-Mart, and retains the title of world’s richest woman. In China, investments are the second highest source of income for its wealthiest women. Our African sisters are not left out. Folurnsho Alakija’s $6.44 billion net worth comes from a 60 percent stake in one of Nigeria’s most prolific oil blocs.

The controversial Dos Santos’ portfolio includes a 25 percent stake in UNITEL, 7 percent in Portugal’s Galp Energia, 19 percent in Banco BIC, an initial $200M investment in Efacec power co, and a controlling stake in Portuguese Telco Nos SGPS, to name but a few.

Self-made women billionaires have even more intriguing stories. Doris Fisher cofounded gap with a raise of $63,000 to open their first store, today the company is worth $16 billion, of which Fisher remains a large shareholder.

With technology disrupting the hotel and transport industries with Uber and Airbnb , it is now also playing a disruptive role in the finance sector. No longer do you need millions to be an angel investor. The emergence of the equity crowdfunding sector now allows businesses sell shares to users for as little as $10!

The idea of raising finance from a group of people is not new, however the Internet has made it easier by reducing transaction costs and increasing the pool of financiers. With Africa’s rising GDP, our continent’s hosting of six of the world’s fastest growing economies, and our immense population- we have an environment that can play host to start ups with the potential to be the world’s next blue chips.

Equity crowdfunding is like donation crowdfunding, except as opposed to just donating money, you get the opportunity to buy shares in early growth businesses. European and North American equity crowdfunding platforms have raised over a billion dollars for local startups in the last few years and created millions of jobs in the process.

Equity crowdfunding is poised to do the same for Africa with the launch of Malaik. Malaik is Africa’s first impacted focused crowdfunding platform. Malaik gives investors access to the continent’s opportunities, and mediates its risk with a four step due diligence process. The combination is a fresh application of technology that can unlock massive potential in the world’s most promising markets.

Malaik’s unique lead investor format allows the crowd to piggy back on deals by notable investors who act as leads, conducting their own due diligence and investing their own money, opening large scale investments previously reserved for experienced investors to the crowd. Malaik makes it possible for everyone to diversify their investment portfolios.

So now, with the click of a button, women can take control of their financial futures.

Quick Read: Your 1 minute guide to startup financing

by PAL Pensions

You already know that it takes more than a stellar business plan and an ace team for your startup to thrive. You also need financing to get your ideas off the ground. COLD. HARD. CASH.

But what type of financing is available for me, you ask? Well, you have 3 options:

1. DEBT FINANCING

Your company receives a loan and gives its promise to repay the loan. It includes both secured and unsecured loans, and can be long-term or short-term.

Pros: You aren’t giving away any part of your business.

Cons: Defaulting on the loan = signing your life away.

2. EQUITY FINANCING

Your company obtains finances from potential investors, family and friends, business angels or by issuing an Initial Public Offer (IPO).

Pros: You are not obligated to pay a dividend

Cons: Equity finance generates capital from external investors in return for a share of the business.

3. MEZZANINE FINANCING

This is a combination of both debt and equity financing. It begins as debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. This type of financing allows the owner both debt and equity options.

Pros: Allows you to get the money you need without giving up a huge chunk of your company’s ownerships…as long as you pay your debt on time.

Cons: Interest rates are much higher than traditional debt financing.

Want to learn more about financing and savings options for your business? Visit PAL Pensions to learn more about their unique products for young entrepreneurs.

Four things you must have to be pitch perfect

by She Leads Africa

What makes a pitch perfect?

This is a question many entrepreneurs ask as they prepare to speak to investors. It is also a question we are asked quite frequently at SLA. We’ve heard a number of pitches through our own pitch competitions, both the SLA 2014 and SLA 2015 Entrepreneur Showcase.

We know what moves us. To make sure we are not alone, we’ve also looked at the research and numbers and found that there are 4 items all investors look for in a pitch.

To make the point clear, first watch this video of Aaron Krause of Scrub Daddy. He is no Motherland Mogul but his pitch makes a few items easily identifiable.

The 4 items and takeaways are clear:

Enthusiasm and passion WINS

U.S. based Shark Tank investor, Barbara Cocoron, says she knows within the first 40 seconds of a founder speaking whether she will invest or not. Does your demeanor show that you are confident in your business or are you anxious and fidgety?

When you speak, are you excited about your business? Do you have a genuine passion for your vision?

Your business solves a problem and your solution is of value

Meaning, what is your value proposition? What makes your business stand out from the rest in the market.

What problem is it solving in the world? How are you solving the differently from the rest of the companies in your industry? State this concisely, clearly, and early.

Your business works in the real world

Also known as proof of concept, investors want to know that there is an actual need for your product or service. Have you taken your business to market? Have you made sales? What’s your revenue for this year and/or last?

The only way to know that a business is valuable is by taking it to market and letting the people decide its value with their money.

You are the one to run the business

We all know; coming up with a business idea is easy, execution is key. Why are you the one to make the idea fly? Are you clear in your communication and can you. Have you led a business in the past? Have you taken the time to develop some of the prerequisite skills for running a business; that is, negotiation, project management.

As we see from Aaron Krause’s pitch, not every investor will be immediately wowed by your idea. All you need is one!

One investor who believes in your business, vision, and you. But, in order to bring that one right investor on board, all four items —enthusiasm, value proposition, proof of concept, and business acumen— must be present.