Startups
In nearly a decade, hundreds of entrepreneurs have emerged with innovative startups across the African continent. We provide insights on their experiences and highlight the activities of investors who fund them.
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Nigeria: Africa’s startup hub (3,360+). VC firms (Future Africa, EchoVC, TLcom) drive growth in fintech, agritech. Choose wisely: sector, track record, value. Funding hurdles exist.
UK patents grant exclusive rights for inventions (new, inventive, industrial application) for up to 20 years. Registration involves IPO filing, search, examination, and fees. Consider a patent attorney. UK patent = UK protection only.
Visa gift cards need activation for security and use. Activate online or by phone with card details. Vanilla Visa and Australia have specific steps. Can act like debit cards with PIN.
Startup equity attracts early hires when cash is tight. Offer stock options, RSUs, etc., with vesting (e.g., 4-year with 1-year cliff). Reserve 10-20% equity pool. Early employees get more (1-3%). Document in a cap table. Understand tax implications. Clear contracts are key.
Understanding Series A, B, C, D, and E funding and its workings is important for navigating your startup’s growth journey. Each stage represents a milestone from development and market fit to large-scale expansion and IPO preparation.
Startup valuation in Switzerland: Multiples (revenue, EBITDA) differ by sector (e.g., tech vs. retail). Factors: growth, risk. Early stage: revenue multiples. Mature: EBITDA. Consider CAC, LTV. Adapt to market. Realistic projections are key.
Phantom stock in Switzerland: Rewards employees with cash based on stock value, no actual shares. Avoids dilution but taxed as income. Consider cash flow & admin. Legal/tax advice essential.
Key deal docs: Term Sheet (initial terms), Letter of Intent (preliminary agreement), Purchase Agreement (legally binding). Understand their roles and when to use them for successful negotiations in Switzerland. Seek legal counsel.
Founder vesting: Gradual equity earning over time (common: 4-year plan, 1-year cliff). Protects company, incentivizes commitment. Key terms: grant date, vesting period. Legal counsel advised for fair agreements.
Debt financing: borrow, repay with interest. Use collateral. Unlike equity, keep control. Types: loans, lines of credit, bonds. Pros: ownership, tax-deductible. Cons: repayment pressure. Assess revenue, cash flow, & market before deciding.
VC IRR: High-risk, high-reward, aiming 30%+ for seed, less for later. IRR measures profitability over time. Factors: market, stage, exits. Use with TVPI, DPI, RVPI. Diversify, target growth. IRR vs. ROI: annual vs. total return.
Accelerated vesting: early access to stock options upon termination or acquisition. Single/double-trigger types exist. Benefits employees with financial security, but may cause tax issues. Employers attract talent but risk dilution. Negotiate terms carefully!
Patent your invention in Nigeria! Secure exclusive rights & prevent theft. Ensure novelty, application, & compliance. Use the Trademarks, Patents, & Designs Registry. Consider a patent attorney for smooth registration. 20-year protection!
Advisory vs. Equity Shares: Advisory for expertise, equity for ownership. Advisory shares lack voting rights, equity grants them. Dilution & tax differ. Choose based on advisor role & company stage. Consult experts for tailored agreements.
ESOP pools: reward & retain talent. Plan pool size, get valuation, & legal approval. Align with growth stages. Avoid common mistakes like over/under allocation. Communicate transparently & consult tax experts.
Equity in startups: balance funding & control. Valuation, stage, & investor value matter. Seed: 10-20%, Series A: 20-25%. Plan for dilution, negotiate terms, & seek legal advice. Retain at least 50% through Series A.
Flutterwave powers African payments. Offers diverse tools, but watch for delays & security issues. Compare with Paystack, Monnify, etc. Assess fees, features, & security to pick the best fit.
Pre-Series A funding bridges seed & Series A, fueling growth. Investors back potential, product traction. Challenges: valuation, market, fit. Secure funding with clear pitches & strong metrics.
Track equity changes with roll forward. Crucial for startup transparency & investor confidence. Manage dilution, funding rounds, & compliance. Use tools for accuracy. Vital for growth.
Incentive units (LLCs) vs. stock options (corps): Units grant ownership, options offer purchase rights. Units: flexible, taxed at vesting. Options: ISOs (capital gains), NSOs (income). Choose based on company type & goals.