5 Lessons From Tomi Davies, Africa’s Most Influential Angel Investor
By Fiona Njagi
Tomi Davies is an angel investor, technology advisor, and mentor. He is one of the most influential angels in early-stage funding for tech startups in Africa. A born Pan-Africanist, he has travelled city to city across Africa educating local investors on the opportunities that abound on the continent mentoring and investing in young founders.
His TechnoVision syndicate invests in tech-enabled startups and has members from across the world. He is a co-founder of the Lagos Angel Network (LAN) and the founding President of the African Business Angel Network (ABAN), a pan-African non-profit association founded to support the development of early-stage investor networks. He is Chairman of the Diaspora Angels Network DAN) and sits on the boards of the World Business Angels Forum (WBAF) and the Global Business Angels Network (GBAN).
TD as he’s often referred to will be joining us an angel on this week’s episode of The Nest.
Catch Tomi Davies among other angels on TODAY'S episode of The Nest at 9 am San Fransisco / 12 pm New York / 5 pm London / 7 pm Nairobi!
Ahead of his appearance, here are 5 key lessons you can learn from Tomi’s years of experience as a mentor and angel investor.
Mentor driven capital
While money is often the focus in early-stage investment, Tomi Davies emphasizes that angels are in a unique position to add more value through their industry experience and networks in what he calls, mentor-driven capital. “There’s a much bigger case to be made for experiential involvement: being there not just as investors, but more importantly as mentors,” he says.
Mentorship is a key driver of success. Experiential insight from an investor saves early-stage ventures time and resources. This allows them to focus on issues that are unique to their business.
Though angel investing in Africa is still at its infancy, interest continues to grow year after. The African Business Angel Network (ABAN) has been one of the catalysts behind this growth. Established in 2015, ABAN’s mission is to increase the quantity and quality of angel groups in African early-stage investment markets. Co-investing is a smart strategy, especially for a new investor. It reduces risk and provides a great platform to learn best practices around investing in the African market.
“Never undermine the power of local co-investors, especially if they belong to groups, syndicates, or networks as investment collaborators. These individuals can provide you with guidance on where to find good venture opportunity and help monitor and evaluate post-funding”, say’s Tomi who has helped bring to life some of the 50 member networks ABAN now has in 33 African countries.
New to investing?... How do you start?
With over 1000 Startups in Africa actively seeking investment, it can be daunting for any new investor to know where to start. Tomi advises starting with industries you know well and getting to know the team behind the startup and not just the founder. Take time to understand the unique solution the business idea brings to the market and the financial, social, and regulatory context of the market they operate in. Most importantly extract a picture of the future from the founders to be sure you are in alignment on the journey.
The role of Government in the Startup ecosystem
The startup ecosystem in Africa has made big leaps in the past decade. Incubators such as The IHub in Kenya, and CChub in Nigeria among others, have been the chief drivers of creating an ecosystem for startups to thrive. However, most governments on the continent are yet to do their part to support the ecosystem. “The role of government is to set policies for startups to run. “ Tomi Says. He explains that the government’s job is simply to act as a referee, setting policies, and creating an environment for startups to operate.
It’s the government's mandate to build a culture of innovation by creating educational programs and supporting research to spur talent development, economic growth, and employment on the continent.
Pitching to Investors- The POEM framework
A great pitch always begins with the vision the founders and the team have for their business, “To start and sustain a successful technology business in Africa, like in any other continent, a techpreneur requires a compelling vision that will drive execution of all the activities required to bring it to life as a successful business venture,” Tomi writes in his blog.
The POEM framework developed by Tomi Davies is a guide that answers the question, “where do I start?”, especially when pitching to investors. POEM is an acronym for proposition, organization, economics, and milestones.
The framework challenges founders to; outline the potential of their idea to earn returns and generate wealth for the investors, define their team’s skills and abilities to meet company objectives, understand customer profitability, and make known the competitive advantage and current status of their venture.