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

Kai’s definition of true broadband – being able to do what you want, when you want to online, and without bandwidth restriction. He is on a mission to (hopefully?)  change the market’s perception of data operators as being out make money of the common mwananchi at all costs.

On local content he likened the submarine cables to ships bringing grain from abroad to Kenya (and the rest of East Africa). We should be worried though, as what will happen to the ‘grain’ farmer in Kenya.

For good ideas, reasonable partnerships are possible with KDN.

He also mentioned licensing models, and said that ideally there should broadly be infrastructure licenses and service licenses. Rolling out infrastructure is expensive thus these licenses would be pricey enough to discourage gold diggers. However service licences ought to be free. In Kenya, it is a unified license which is a bit tricky when it comes to empowering startups and encouraging local content.