by Lionesses of Africa Operations Department
Regular readers of this column will recognise that it is highly unusual for us to review books here. We quote to illustrate points we wish to make and then draw people to where they can buy such books to support the authors, but review? Never. That is until now, so pour yourself a Coffee or cup of Tea, and enjoy!
Why now we hear you ask. The Lioness membership of over 1.7 million, is across all countries of Africa (and increasingly in USA, UK and EU), all industries and all sizes of business from SME to multi-million US$. What we also have are our ‘100 Lionesses’ group, those who have shot the lights out either in impact, or in creating massive multimillion $ companies, or in a few inspirational cases, both.
One such Lioness is Dr Ola Brown, a medical doctor, helicopter pilot and the health-care entrepreneur founder of West-Africa's first air ambulance service company, Flying Doctors, Nigeria (currently servicing 47 out of the 54 African countries). She has been a Lionesses almost from the day Melanie founded Lionesses of Africa in 2014, here is her start up story. A few years ago she moved into investing and now with her second fund (her first returned a cool 25% IRR), she has a portfolio of incredible businesses, many of which are Lioness owned and run, such as by the inspirational Temi (here) and brilliant Affiong (here), although given her portfolio is 50% women there will be many others. Here is Dr.Ola’s more recent Lioness Weekender Cover Story. She is truly a Lioness of Africa.
A well known financial market saying is that anyone can buy, but the real skill is in selling - so too with VC/PE. Investing in companies is one thing, but exiting or having other investors joining in at a later date and at the right price shows the quality of one’s portfolio. Remember investing in a company is not just the cash paid, but also the knowledge, experience and mentorship one then brings, which in turn builds these companies from good to great so increasing their value. The list of the investors who followed her lead is here. Those in the know, know how impressive this list is.
All of that is a long winded way to say that Dr. Ola knows, she really knows both how to raise funding herself and also what it takes for top investors to become interested in a business.
With that deep knowledge and experience, she has decided to pack it into one simple and brilliantly written book…all for free! Rude not to have a look we thought…and wow, were we rewarded!
Journey to Series A. A Playbook for Founders, Funders and Policymakers’ is clear, simple to understand and tells it straight.
From the moment you open this book, you realise there is nothing passive about raising capital. There is no waking up one morning, seeing the sun streaming through the window, and thinking: “Oh, maybe today I’ll do a Series A funding round…”, sorry, none of that. This is a tough process that runs over many months and Dr.Ola leaves us in no doubt what to expect.
Although this book deals with Series A, which is when it gets really serious (institutional money gets involved), anyone who is running a business should read this to understand what is required to move from good to great. The FMO say you have to “do what is right, right from the start” (see here their guide on corporate governance), and Dr.Ola certainly emphasises that as her introduction quickly shows why Series A demands so much more. No Friends and Family involved here. This is the big league.
From an investor’s perspective pre-seed and seed funding rounds are all about ‘promise’. The promise of the Team, the promise of the solution to solve the problem, the promise of the market to understand and believe. When you get to Series A, there is a different ‘P’ involved - that of Performance. And from that, there is no hiding. This is about the numbers, audited by a firm that has a respected name. If these are poorly prepared, stop now, there is no point going on until you have tightened up this area. If your numbers are messy, not audited well and do not link through to all your other numbers such as Bank Statements, the investor will probably not bother to even return. A seriously avoidable lose-lose.
Investors want no surprises after they have invested in you and your company - far better to find them now and have the opportunity to walk away.
It is always said that you can tell who really knows their subject because they do not hide behind complexity. Dr.Ola guides us through this all in a clear, simple and friendly way, from which you can see that she knows and cares deeply about her subject.
So for ‘Performance’ we need traction, such as “…number of users, revenue, views, or other milestones/key performance indicators (KPIs)” she tells us. For most Lionesses who have had to bootstrap (financing for women we often say being more of a rounding error - see here one of our articles), this will not fear us. Building our businesses through profits rather than financing turnover has created strong foundations, but for Series A we already need to be well on our way to monthly revenue of $200k+. Ok, serious traction. But for the rest of us - it is still important to know the route we must tread, so even if we never need a Series A raise, Dr.Ola is showing us the way to build a great company.
The other thing we need? Time. As Dr.Ola states, this takes so much out of your day-to-day life (and that of your team as well) that perhaps alternatives can be looked into and she delves into Customer Funding (seriously MailChimp? Bootstrapped through Customer Funding?! Kudos to them), Venture Debt, Bridge and further seed rounds, and indeed Crowdfunding. All of these lean on particular strengths that you might have that will avoid the huge time of a Series A, and typically she tells us that it takes 18 months of hard work from the closing of your seed round, to close a Series A (although 6 months of that is just getting your Data Room up to scratch ready for the massive scrutiny coming). Start early - by the time you think you are running out of cash, it is probably too late.
Dr.Ola goes onto practicalities, such as a list of what is required in your Data Room. If anyone were to ask, we would all assume our paperwork is in order, but which of us can truly say that if an investor turned up that we would have everything securely ordered and held in an area ready for scrutiny? Hmmm, not many, that’s for sure. Yet a well organised Data Room shows professionalism to the highest degree and Investors will assume this professionalism flows into the rest of your business. First impressions count!
One of the best bits of advice in her book is on your seed investors. Keep them close she tells us as you need to begin “building connections and establishing the right network”, and who better to do that with than someone who has backed you with hard cash. They will actually want you to succeed, so keep them in the loop - they might even be happy to introduce other investors! Don’t be shy, as we always say - if you don’t ask, you don’t get! Plus, and here’s the kicker - Series A investors will reach out to your previous investors to ask about you! Why leave this to chance? Not only your professionalism but your ‘like-ability’ counts (more than we think!).
Never forget the odds are not with us, not only do women owned and led companies have a minute share of the funding pot, but the numbers that actually make it to funding are tiny - so we get a tiny bit of a tiny bit! Marc Andreesen and his team at the massive ‘a16z’ fund look at 3,000 of the 4,000 startups in the USA searching for VC funding each year in their sector (Tech) from which they take 200 and of these they only invest in about 20 a year. Yes - 20!! These numbers are similar across the entire VC/PE world (see here).
This is why this free book, this font of knowledge from someone who has been there, done that, is so important. You may not be thinking of a Series A funding round at this moment, and perhaps like MailChimp you can grow organically but just from a good governance point of view, creating a clear roadmap backed by strong structure and processes - how good you will feel having done it. Look at her ‘cheat list’ at the end of the book and ask yourself why you don’t have all that information at your fingertips, in a safe place or have not asked those questions of your team…
There is so much more to this book than we can cover over this one cup of Coffee or Tea, but you can download it here from Dr.Ola’s LinkedIn post, and for those who prefer, here is a link to a short lecture on YouTube. Please drop her a one liner in the comment section to show her the Lioness love as you watch or download. It is also well worth following or subscribing as well because she is often dropping great advice and videos onto her feed.
Lionesses across the globe never fail to amaze us with their interest, their kindness and their eagerness to uplift others though their own knowledge and experiences, this is the community Melanie imagined when she started on this incredible journey.
Dr Ola Brown, Medical Doctor, Helicopter Pilot, Entrepreneur, Investor, truly shows us what it is to be a Lioness of Africa.
Stay safe.