Phillip M. Verges – Founder & CEO of New Market Technology Inc had some interesting thoughts on fund raising  as well as the unique position that Kenya, and Africa at large has as an emerging market.

• Investors are not investing in your success (I have never looked at startup funding from this point of view but it rings true). The Venture Capitalist (VC) just needs to take the startup to the Initial Public Offering (IPO) to make money.
• Investors are only interested in financial milestones and not your long term success, so when pitching focus 10 minutes on your vision, and 20 minutes on how and when the investor will make his money.

Some fund raising myths:

• Long Term Investments – Investors are only interested in financial milestones
• Partner for Success – Investors can make money even when the start up is not enjoying success
• Cash flow positive – investors can make money whether it is positive or red
• Internal Rate of Return – investors are more interested in their rate of return

On Milestone Fund raising, from research:

• Less than 40% of start ups are sustainable for more than three years
• The fourth time is usually the attempt that tends to be successful for start ups
• Milestones are needed along the way
• Fund these milestones

He suggested that it is more prudent to raise funds for the next milestone – e.g. funds for a pilot of a product or service, as opposed to funds for the entire roll out at once.

He also mentioned that they are looking at local companies that they can work with. Interesting times indeed.

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I didn’t get the last bit of the seminar as I had to leave.

Great times indeed for those with good ideas and are willing to give a shot at bringing them to fruition!

This seminar was facilitated by the ICT Board – Much appreciated