The second in a series of Angel Investor Bootcamps organised by the African Business Angel Network (ABAN) has taken place in Nairobi, Kenya, with key takeaways including the use of benchmarking as a successful valuation tool and the need to understand local environments.
Disrupt Africa reported last month ABAN, a pan-African initiative to promote angel investing and boost early stage startups, had announced bootcamps in Lagos, Nairobi and Cape Town, South Africa, in partnership with VC4Africa, Intercontinental Trust and the LIONS Africa Partnership.
The Nairobi event featured a master-class by “European Angel Investor of the Year” Brigitte Baumann, president emeritus of the European Business Angel Network (EBAN) and founder of Go Beyond Early Stage Investing. Baumann shared insights from her journey as an investor and took the audience through the whole investment cycle from deal generation to exiting.
Among the discussions was one on ‘benchmarking’, which has proven to be a successful valuation tool. Angel Networks and syndicates tend to screen more deals and make more investments and will therefore also be in a better position to benchmark compared to individual investors.
“Benchmarking should be three-dimensional; sector, country and stage of development with three key divers behind the value of an early stage company being ‘Quality of Offer’, ‘Market Heat’ and the ‘Cash Situation’ of the company,” ABAN said.
Also discussed was that though there are universal rules to investing, what works in one country or ecosystem may not be applicable in a different environment without understanding how and why something works.
“Investor education is as important as educating entrepreneurs when it comes to deal structuring, term sheets and angel investing in general,” ABAN said.
Attendees heard that early-stage investing is “still very much an art form”.
“As an angel investor, when your gut feelings tells you walk from that deal, follow your gut as it will haunt you later,” Baumann said.