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Investing or taking on investment is a decision to build a long-term relationship much like a marriage, with multiple parties involved, according to panelists at the recent AfricArena conference in Cape Town.<\/strong><\/p>\n
When considering an investment deal, the panelists focused on the importance of every investment making sense for both the startup and the investor, noting that it is crucial for both sides to see eye-to-eye and have the \u201csame DNA\u201d to make the company\u2019s long-term journey workable.<\/span><\/p>\n
\u201cIt is a marriage. \u00a0One of the biggest lessons I teach to anyone looking to raise capital, is that it has to work both ways,\u201d said Clive Butkow, chief executive officer (CEO) of Kalon Venture Partners.<\/span><\/p>\n
\u201cIf we create wealth for the founder, we create wealth for ourselves.\u201d<\/span><\/p>\n
As such, Butkow says startups should look for investors who they think they can \u201cwalk with\u201d for the next seven to 10 years.<\/span><\/p>\n
Charlotte Koep, investment associate at 4Di Capital, highlighted that the \u201cmarriage\u201d is not always between only two parties. \u00a0Other co-investors also play a big role in how the company\u2019s trajectory pans out, and as such they must be considered when making any new investment.<\/span><\/p>\n
\u201cAn important part of making an investment is the question: are you aligned with the other investors?\u201d<\/span><\/p>\n
Her colleague at 4Di Capital, Justin Stanford, agreed, saying: \u201cThose relationships are important. \u00a0You\u2019re going to work together for a long part of your life.\u201d<\/span><\/p>\n
As a result, investments are made largely based on the people involved, the panellists said.<\/span><\/p>\n
\u201cWe don\u2019t invest in a product. \u00a0We invest in a person, we invest in the team,\u201d Butkow said.<\/span><\/p>\n
However, alarm bells will sound if an entrepreneur has already given away too much equity to angel or seed investors. \u00a0The founder needs to retain a strong connection and incentive to work hard on the company, which ebbs if too much equity is taken away.<\/span><\/p>\n
\u201cBe wary of giving away too much equity, because you\u2019re cutting your hands off when it comes to securing funding from any more sophisticated investors,\u201d Butkow said.<\/span><\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Investing or taking on investment is a decision to build a long-term relationship much like a marriage, with multiple parties involved, according to panelists at the recent AfricArena conference in Cape Town. When considering an investment deal, the panelists focused on the importance of every investment making sense for both the startup and the investor,<\/p>\n","protected":false},"author":4,"featured_media":17380,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,39,40,26,28,29],"tags":[2024,8627,10196,6209,17,223,8872],"class_list":{"0":"post-17378","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-east-africa","8":"category-events","9":"category-features","10":"category-north-africa","11":"category-southern-africa","12":"category-west-africa","13":"tag-4di-capital","14":"tag-africarena","15":"tag-charlotte-koep","16":"tag-clive-butkow","17":"tag-featured","18":"tag-justin-stanford","19":"tag-kalon-venture-partners"},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/posts\/17378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/comments?post=17378"}],"version-history":[{"count":0,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/posts\/17378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/media\/17380"}],"wp:attachment":[{"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/media?parent=17378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/categories?post=17378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/old.disruptafrica.com\/wp-json\/wp\/v2\/tags?post=17378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}