Notes on early stage investing the VP way.

As it’s a few hours to VP’s first investor demo day. I thought to share some house tips on how to invest in a VP company or any early stage company for that matter.

• As a baseline its important to note that our companies are early stage, but all have amazing growth potential and are already recording healthy MOM growth.
• The best investors bring more than cash, are passionate about the startups solution or sector and can help the business beyond investing money.
• VP has done very detailed due diligence on all the companies as we invested, you can rely on this with paperwork to booth.
• Our recommended investment instrument for this fundraising round is a convertible note (CN). The valuation conversation can be controversial and energy sapping; hence convertible notes are recommended. This CN is similar to the YC SAFE, with a bit more detail for the appetite of most active investors in Africa.
• While terms are specific to each startup, there are recommended terms for the CN which can be discussed with the companies. They all have a term sheet that can be shared for ease of process.
• In the event that an equity instrument is agreed to by both parties; investors are encouraged to be mindful of not de-motivating startup founders by requesting too much equity during fund raising negotiations.
• Fundraising, however important to companies, can quickly become distracting and emotionally draining, so it’s important to let the founders know early your timeline for investing, and be clear about your requirements.

This list is clearly not exhaustive, and I intend to update this as time permits and as we learn more. Please drop a comment and let me know if I have left anything out.

All the best to our demo day companies today.

Thrive!