The Wolf of All Streets

A common dilemma for start-up founders based on my personal interactions with them overtime has been to decide which instrument is best employed to secure financing for their growing startup, relative to the company’s stage of development. Somewhere in-between the internal deal review process, some founders would place a call to notify about their intention to adopt a different fundraise instrument, this could be funny and distracting. As competition for the available fund in the Venture Capital market increases, it is crucial for business owners to understand their fundraising options, first to enable them create a solid impression in the minds of investors, as well as to avoid being locked into a structure with potential medium or long-term downsides. While each round of fundraise comes with detail-heavy intricacies, through this write-up I look to offer a brief overview and comparison of the three increasingly popular structures: Direct Equity, Convertible Note and the newer hybrid ...

Referencing one of my team's sourcing strategy, It is no longer news that investors referral (for co-investments) is now an invaluable source of rapid fund-raise traction, especially for startups in the African and LATAM ecosystems, exhibiting significantly similar features. From time to time, solid entrepreneurs and founders have leveraged this open-secret, asking one investor for referrals to other investors. After all, investors network frequently, work together and have long term relationships, hence a referral would go a long way. However, not all introductions are equal. The most successful investor-to-investor referrals are those where the referring investor is investing in the business and is seeking to fill out the round with complementary capital. By investing, the referring investor sends a strong signal to others about his/her excitement about the company. This happens most often in seed rounds but also occurs in Series A, B and subsequent stages. The next mos...