Thread by @kola_aina

If you are in the African startup ecosystem today - you need obsess about exits and liquidity!

Yesterday I had a very nice seat-down with an aspiring micro fund manager to share my experiences. This was the 3rd of it’s kind this month, and in the past weeks I have had many such conversations. On this occasion like always, I wished him the best and offered my support.

Then it got me thinking. 🤔

As we continue to see an increasing number of micro funds, accelerators, syndicates and VC funds come on stream in our market, the thinking of all these brilliant people needs to start shifting to “exits.”

You see, when you invest your own money like I started out doing a few years ago, perhaps you can afford not to bother so much about exits (“vanity investor”), but once you start raising outside capital, long term performance (exits / liquidity) is all that matters.

In this market we aren’t or “haven’t started” seeing much of this outcome and this should be cause for concern or at the minimum contemplation.

Some will argue that it is still early days. I will avoid that debate here.

For sure though, managers and others actors must burden themselves with this puzzle:

“How do we create liquidity and orchestrate the exits that are urgently required to ensure the air in this ballon we are inflating isn’t suddenly let out?”

I don’t have all the answers yet; but I suspect that a few things matter in this contemplation. List:

In no particular order.

1. What venture funding model is most optimal in Africa. What does the “Wakanda Venture Model” look like?

2. Why aren’t alternative forms of capital returns, like dividends or profit-sharing, an option? Why are these bad words. I mentioned this once at a retreat and everyone shouted me down. lol

3. How do we get more corporates involved to drive M&A activity downstream?

4. How might we “responsibly” explore the possibility and promises of blockchain and ICO’s

5. How might we deliberately curate our portfolios such that we create strategic alignment and generate greater value

6. How might we build stronger follow-on partnerships with larger funds to make the conveyor belt more viable towards exits.

7. How might we strengthen the size, depth and quality of our customer markets so scaling companies don’t contend with glass ceilings of growth.

8. What is the place for secondary listings and public markets?

I’ll love to know what you think.

But for sure what got us here, won’t take us further. We need new thinking around exits and liquidity.

#buldingthefuture