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Leslie Tita | UI & UX designer residing in Maryland

Leslie Tita | UI & UX designer

This where I assemble all my thoughts and projects as the years go by

African Entrepreneurs: Investor money is not yours

Bash >_Hello World

Investor money is not mine

My partner and I repeat that phrase everytime, We see ourselves slacking, getting too comfortable or willing to spend frivolously, like to get that latest 4K IMac 27in.

Your circumstances maybe different,but.

Getting any type of funding for a venture is no easy feat for an African based startup, if you haven’t raised a kobo, then go read articles on how to raise money, but if you have then congrats, and read on. 

Regardless of the amount raised, let it be a hefty $1.1 Million of Marc Essien or the 7 figure seed for showroom.co.ng, the rule is same.

This post is targetted to you! For a majority of African countries, their culture and expectations are quite peculiar (forgive the Generalization ), and as with most community oriented families, African parents will expect you to succeed and share that success with them immediately.

Unlike the western nuclear family, most African families will expand to third cousins, and every one of them will want a piece of the pie, and unfortunately you can’t disregard them, unless you want to be called the “greedy bush faller”.

And while they expect this handout for the right reasons ; They are the ones who brought you up, played nanny, did your homework, and so you feel like you owe it to them if you make it.

Breaking news > No you don’t “yet”. This is why.

Its quite a hard pill to swallow especially for first time entrepreneurs  who want to keep sole ownership of their companies or those who think company’s money is theirs but once you go raise funds, your startup now belongs to everyone who put in some $$$.

Investors know the risk they take when they decide to invest in you, for the most part they will be fine if their investment does not give the ROI they expected, their options are usually good, they will ask that you sell the company, force you to liquidate, hostile take over or stop funding you.

However we will not get into the legal how to prevent that, but rather focus on the sole fact, any form of investment is not yours.

So dear budding African tech Entrepreneurs you can not:

  1. Buy yourself a new Tesla yet.

  2. Build your parents new house yet.

  3. Take first class tickets back home yet

  4. Pay your cousin’s college tuition yet.

Keyword here is “yet”.

Every dime counts, as well you may want to plan for the goodtimes, plan for the unexpected, because should your business ever become successful, you will face new type of challenge, i.e. you will be on the radar of competition, disgruntled employees, exes and the following

  1. Lawyers & Lawsuits

  2. Unpaid invoices

  3. Competition

  4. Depending on your entity, maybe Taxes

  5. Negative PR and Real Estate.

  6. Being fired as CEO of your company

And to give you a taste of how this really plays out in real life, read ” Evidence Suggests Erik Hersman & Riyaz Bachani Orchestrated The Ousting Of Angani Founders

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