As you may know, we have four masterclass sessions every year (one every quarter) and each covers different aspects of the investment life cycle, i.e. due diligence, deal structuring, valuation etc. Below is a snapshot from each of the sessions of 2018.
Early Stage Investing Strategy – March 2018
It was our first session of the year and it focused on guiding the participants on developing their own investment strategy based on how much time they want to invest, the type of investment, the form of investment and the model of investment. This requires answering the most pertinent question which is; why are they investing? Is it to give back, or purely for return?
We had a panel session with Aun Ali Rahman of InfoDev and Kanini Mutooni of East Africa Trade and Investment Hub, both angels themselves. They reminded the participants that angel investing is not a passive activity. Most businesses don’t only need cheque books, they need advice and linkages, and that is where local angel investors can plug in.”
Due Diligence – June 2018
The second session was in July and covered the due diligence process in the investment process life-cycle. Some of the learning objectives here were understanding how to screen and investment opportunity and developing and investment thesis, how to undertake a due diligence process.
When all is said and done, still no amount of due diligence can guarantee a return. Angel investing is about creating your own value as an investor. As mentioned above, you’ve just have to get involved as an angel investor.
Valuation – October 2018
The session was facilitated by Tomi Davies, President of Africa Business Angel Network (ABAN) & Lagos Angel Network (LAN) who explained to the participants the different valuation criteria and which one is preferred depending on stage of business, sector they’re operating in etc. However, valuing a start-up still remains an art, there isn’t an exact mechanism.
We also had Alexander Fraser of Dazzle Angels brief the participants on the angel investing scene in South Africa. Some highlights of her presentation:
- Of the total early stage investments, 27% of the deals were by angel investors
- There’s an increase in the number of people who were entrepreneurs then exited and begin angel investing activities
- Most angel investors invest their own funds and prefer to invest in syndicates – very few choose to invest alone
- Tax breaks (through the South African 12J structure introduced in the Income Tax Act) are also an incentive to boost angel investing activity though they’re still exploring its practicality for a small pool of capital (like angel groups).
The Masterclass was in partnership with the Make-IT in Africa Initiative, by GIZ. Is seeks to create an enabling environment for better access to finance, markets and skills, in close collaboration with corporate and financing partners, social enterprises, hubs, and investor networks.
Deal Structuring – December 2018
The December session covered deal structuring. The gist of structuring a deal is to achieve risk–reward balance i.e. manage risks and align expectations. How you structure a deal is also how you add value to it as an investor.
The session was powered by Google which supports the growth of the start-up ecosystem through its Launchpad Accelerator, by supporting initiatives which include exclusive events, mentorship opportunities, and training.