1.?Prepare your venture
Before your venture is put into fundraising mode, it is important to post documents to your venture profile. Here you can add your pitch deck, financial projections or any other materials you want investors to see. Also make sure to add team members and advisors to your team page. As part of this process, you will be asked to complete the VC4Africa Quick Scan (PDF ? 200KB). This is a straightforward questionnaire to help you check your investor readiness and to identify any points that need to be addressed before investors will take you seriously. When you?ve completed the Quick Scan upload it to the documents section of your venture.
2.?Register your intention
Given the results of the VC4Africa Quick Scan, the next step is to register your intention to raise a round of funding. You need to indicate the financing stage ? Seed, Start-up, 1st round (Series A), 2nd round (Working cap), 3rd round (Mezzanine) and 4th round (Bridge). You also need to indicate the financing type ? Equity, Debt or Hybrid and your capital needs (between USD $10,000 and USD $1 million). Your registered intention is reviewed by the VC4Africa team. Once approved, your venture is added to the list of ventures fundraising on VC4Africa. The next step is to garner investor interest and secure a lead investor. Post updates and progress to your venture profile. Investors who are interested in your work can express their interest to join as a possible lead investor.
3.?Engage lead investors
If you have done your work and your venture clearly shows traction, you will hopefully secure interest from a number of possible lead investors. You can engage them and work to understand the differences between them. It?s up to you to decide who is the best investor for your business and agree to a fair term sheet. Do not approve the lead investor until you feel confident about the terms of the deal they are offering. If they have not made the investment into your business, you can ask them to send a bank guarentee showing they have the required capital on reserve. When the lead investor is approved, you can upload the term sheet to the documents tab on your venture profile.
Note: If you have already secured a lead investor, get them to sign up on VC4Africa so we can add them and your venture profile and advance you to the next stage (if the lead investor is not yet registered as an investor on VC4Africa, they are not expected to pay the success fee ? see point 5).
4.?Raise capital
Once a lead investor is secured, the venture can go into ?Raising Capital Mode? for 90 days. At this stage, investors registered on VC4Africa can review the term sheet and express their interest to participate. They can outline how they plan to contribute in non-financial ways and any terms or conditions they might have as part of their participation. The amount of capital pledged by each investor will appear in the progress bar indicating your venture finance goal. At the end of the 90 day period, copies of these pledges are sent to the entrepreneur and lead investor.
5.?Close the deal
At the end of the 90 day period it?s time to close the deal. You will receive copies of the registered intentions and can follow up with the lead investor to close the financing round. Any round that is successfully completed using VC4Africa is expected to pay a 3% success fee (1.5% from the entrepreneur and 1.5% from the investor). The ?Pay it Forward? model allows VC4Africa to support new generations of entrepreneurs. Once completed, the venture is put back into building mode. Update your network on progress and make sure you maintain the foundations needed to raise additional capital in the future.
If at any point you want to cancel your participation, let us know and we will pull the venture out of fundraising mode. You can also see our Terms & Conditions and Disclaimer for additional detail. Want to register your venture? Sign up here!
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