Empathy and early-stage investing

This week, The Flip’s executive producer Sayo Folawiyo and I were given an intimate, inside view on the happenings of Africa-focused angel and venture investors at the Africa Early Stage Investor Summit, organized by VC4A and ABAN. We were honored to have the opportunity to have our retrospective conversations live on the AESIS stage, and reflect on where we are as an ecosystem. 

A couple hundred angel and early-stage investors gathered this week to talk about the work required to invest in early-stage businesses in Africa, with the potential for a high level of returns and impact. 

Through the conversations, trust and empathy were words we heard a few times this week. Dr. Ola Brown, on her panel, talked about being in the business of trust. In our conversation, Sayo remarked on the importance of trust and empathy between investor and founder. In an unrelated Twitter thread, Benji Fernandes, CEO of Y Combinator-backed NALA, raised the topic of empathy, as well. 

In our day two retrospective, Sayo talked of his appreciation as an entrepreneur when investors have a clear point of view – empathy demonstrated through clarity. When investors and entrepreneurs are on the same page good things happen.

We particularly enjoyed a moment of discourse that took place between Lateral Capital’s Steven Grin and HIMangel’s Khaled Ismail on their panel on exits. They had different strategies as it related to cap table management and how they viewed the importance of getting strategic investors, and potential acquirers, involved in early funding rounds. Sayo remarked, 

The best investors don’t look the same but what they have is a real clear point of view and clarity and consistency between what they say and what they do. 

Meanwhile, some have seen too much money chasing the best deals. In a separate AESIS panel, Iyin “E” Aboyegi of Future Africa referenced a “herd mentality” amongst investors, while Sangu Delle of Golden Palm Investments acknowledged that most of the “best deals” are oversubscribed.

While increased collaboration and deal syndication amongst investors is a great thing for the ecosystem, there’s a fine line between collaboration and groupthink. 

A big area of focus during AESIS was also angel investment – how important they are to seed an ecosystem and the rate at which they may be achieving liquidity events, if not through major newsworthy sales but through secondary exits. As more continue to participate – and gain additional resources to participate more meaningfully – perhaps we can expect to see greater consistency of thought to action.

However, we’re not there yet, as exemplified by the representation and diversity of founders during AESIS’ venture showcase – of the 19 pitches, four founders were women, four were foreigners (including two members of the Diaspora), and six founders were white.

So while we’re buoyed, as always, there’s still work to do. 

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