The rich promise of Venture Capital for startup entrepreneurs in Uganda

Mara Foundation hosted three venture capital providers on Friday 30^th March 2012 at the Mara Launchpad, to answer questions to 50 assembled entrepreneurs about what venture capital is, how it works, and whether all those rumours we’ve heard are true… Solomon King, founder of Node6 tweeted at the end of the event, “Great advice and insight into the mindset of Venture Capitalists,” so it seems it did the job. Here you can read the profiles of the speakers and some of the live tweets that were made throughout the event (have your dictionary of financial jargon at the ready). First up though, is a bit about Mara Foundation’s own Venture Capital fund being launched soon.

This blog entry has been compiled by Nigel Ball and Gilbert Beyamba of Mara Foundation, with contributions from Solomon King of Node6 and Billy Branks of Crystal Interactive Systems who live tweeted throughout the event (with thanks).

Mara Launch Uganda Fund, a venture capital firm for entrepreneurs

As a young entrepreneur, raising funds for your idea or business can be challenging and it’s no secret that this is becoming harder as borrowing from banks is a nightmare for small entrepreneurs. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don’t despair. It is because of these frustrations and discouragements like the amount of time it takes to secure capital, the rejections endured, and the lack of linearity and progress checkpoints over the course of the fundraising process, that entrepreneurs need to be creative in their search for alternative sources of financing.

Mara Launch Uganda Fund as an alternative source of financing is a Venture Capital firm designed to support entrepreneurs build high growth companies. With an emphasis on backing Ugandan youth with a talent for business, it provides risk capital in the form of debt but later converted into equity.

Although bank loans or debt financing seem to be the only source of financing on the Ugandan market, entrepreneurs need to know that there are several alternative sources of capital outside of the traditional debt financing, like venture capital. Venture capital is an option for enterprises that have a seasoned management team and very aggressive growth plans.

Mara Launch Uganda Fund provide risk capital between 5,000,000 UGX and 10,000,000 UGX to high-growth new and early-stage start-up, small and medium-sized Enterprises in various sectors which show good growth, in return for an equity share in the business. We believe it is the first locally owned venture capital firm in the country.

Speaker profiles from the event

Kim Kamarebe

Kim Kamarebe holds a BS Financial Engineering Degree from Princeton University and an MBA from the Harvard Business School. Kim has significant experience in Investment Banking, Business Management and Private Equity in the European and African arenas. Kim is currently in charge of East African Investments for TLG Capital, a leading private equity investor in frontier markets with a focus on Sub‐Saharan Africa. TLG has a number of investments in East Africa, including Quality Chemical Industries Limited, the first WHO‐approved manufacturer of antiretroviral and anti‐malarial medications in Sub‐Saharan Africa. Prior to TLG Capital, Kim worked at HSBC Bank’s Principal Investments Practice focusing on private equity investments in large cap African enterprises. At HSBC, Kim accumulated significant African commodities transactional experience, including but not limited to, the management and sale of a diamond mine in Southern Africa, and the proposed purchase of a chrome and platinum mine in Southern Africa. Kim spent the bulk of her career at Goldman Sachs International in London and New York, primarily covering Real Estate, Leverage Finance and Sub‐Saharan Africa Coverage. At Goldman Sachs, Kim worked on US$bn US and European real estate transactions, €bn European leveraged finance and financial restructuring transactions, in addition to European and African Mergers & Acquisitions advisory. Kim is a frequent speaker on finance and investment and sits on several Boards in the region.

Ssenyimba Samuel Collin

Samuel is a development finance professional who begun his professional career in the microfinance sector working with Centenary Bank Ltd before joining French rating agency, Planet Rating where he focused on reviewing potential investment prospects in tier 2 – 4 MFIs, for various microfinance investment vehicles (MIVs). He joined the social impact investment space in 2009 and currently serves as LGT Venture Philanthropy’s investment manager in charge of the social impact fund’s investment activities across East and Southern Africa. This includes investment appraisal; due diligence; deal-structuring and post-investment portfolio monitoring. Samuel holds a masters degree in International Development Finance from Reading University (UK) and a BSc. Agriculture Economics from Makerere University.

LGT Venture Philanthropy is an impact investor supporting innovations and organizations with outstanding social and / or environmental impact on lesser advantaged communities across the globe.

Ted Pantone

Ted Pantone is the East Africa Director for The Mango Fund, a non-profit investment fund that comes alongside SME entrepreneurs to help them grow their businesses. Ted holds a Bachelors of Science in Business Administration from The King’s College. After college Ted spent several years managing a division of a manufacturing company in the US. He then transitioned to East Africa where he worked for Innovations for Poverty Action managing operations for a Bill and Malinda Gates Foundation funded project in Western Kenya. Now, with the Mango fund, he hopes to see developing economies grow rapidly through private investment in industries that will create lasting value.

Live Tweets from the event (hashtag #VCUG):

• Kim Kamarebe talking about company valuation methods. Options are EBITDA, asset valuation and multiples of revenue.
• Advice: Get a sense of the multiple of your industry and work that into your revenue.
• Second speaker mentions intuitive valuation. How much a VC “feels” your business is worth.
• More advice. Figure out when you want to approach a VC, source/bootstrap to get started, then approach VC with facts & track record.
• Kim says be realistic. Approach valuation as a negotiation and don’t get too cocky/unrealistic with your valuations.
• Kim on Exit: depends on fund size. $100,000 will not work with IPO exit.
• Exit options are numerous and are pretty much dependent on what the VC’s investment strategy is.
• Ted from Mango Fund says Good Management is often indicated by knowledge of products, industry, and competition.
• Teams at #marafoundation #maralaunchpad discussing the biggest problem of startups venture capital
• Exit strategies are very important
• Kim says Good management is purely objective and can be indicated by dedication, character,and good track record.
• Sammie: Good management includes making decisions on gaps in team expertise and working towards filling those gaps.
• Ted: If you can get audited financials, do so, but they are not mandatory.
• Qn: What if I’m more interested in skills than cash?
• Kim: Get the cash, take it home. Consultancy services (defined by VC skillset) can be valued and that gets converted into equity.
• Sammie: Projections need to have a basis. Can your assumptions be backed up by fact or research?
• Sammie: Understand stages of growth and know when to bring in partners. Manage and understand your growth cycle. Do not be myopic.
• Kim: Treat your equity partner like a partner. Don’t lie or be dishonest about your business history.
• VC Involvement in the business is dependent on the VC’s confidence in the team and also the maturity of the team.
• Kim: Most entreprenuers have an ego issue. The VC may need to fire you to get the business growing better and faster.
• Kim: VC’s that want to be involved in the business are often a good thing. Their goal is to build the business.

Uganda video launched

So, the Uganda video launched on Tuesday morning under the title “Uganda 2012 – More Than Kony 2012”. The whole team is happy to see the video go out into the world and the timing couldn’t be better, with Invisible Children set to launch a sequel to their viral Kony 2012 effort this week. The Kony 2012 video split opinion in Uganda and even within the Foundation itself, but without wanting to detract anything from the effort to catch Kony, we are pleased to be able to offer an alternative view of the country, and hope that more people outside of Uganda and Africa generally start to see another side to the continent.

It took four attempts, four separate production companies, and lots of time and money to get 3 minutes of video that we thought projected Uganda in a world-class light. The winning team in the end was the very talented French-Cameroonian Yann Leblond of EyesBreakers productions, who directed the video, and our very own Isaac Oboth of Media 256, who did supplementary shooting and editing – himself a young entrepreneur, mentee on our mentorship programme, and member of our incubation space, the Mara Launchpad. Isaac’s company Media 256 produced our other two videos as well, which you can see on our Youtube channel. Which just goes to show that the homegrown talent is very much available…

The film’s sountrack, in case you were wondering, is performed by Radio & Weasel, one of Uganda’s biggest pop acts, who sing “Ndi mu na’Uganda” which simply means “I am Ugandan”. The song was composed by producer Richard Kaweesa as part of the “I am Ugandan” campaign to enhance national pride and unity in Uganda, and he kindly gave us the rights to use the song. Thanks are also due to Uganda Tourism Board and Uganda Wildlife Authority, who shared some archive footage.

We hope whoever you are and whatever you do, the film inspires you to be a part of the exciting journey that Uganda, and Africa, is on.

Posted by Nigel Ball, Director, Mara Foundation

YOUTH BUSINESS INCUBATOR NOW OPEN IN KAMPALA

A new initiative by the Mara Foundation in partnership with the Angels Finance Cooperation is creating opportunities for young entrepreneurs across Kampala. Called the Mara Launchpad, it is an action packed business incubation ecosystem designed to foster the growth of small start up or expanding businesses that lack the tools and support needed to get their business up and running.

It can be challenging for startup businesses to be productive and professional when working out of a bedroom, livingroom, briefcase, basement or garage. With limited resources to rent a commercial space, The Mara Launchpad provides young entrepreneurs with affordable office space to conduct business in a professional manner, well equipped with furniture, boardroom, meeting area, and unlimited internet access, all for 300,000UGX per month. But more importantly, the businesses will receive marketing and promotional support, access to mentorship, and ongoing business support and guidance.

The space has incredible resources for young entrepreneurs and provides a great entrepreneurial environment. Need to book space email: Launchpad@mara-foundation.org or call: +256779698906.

The Mara Foundation Date Auction Reloaded

The Mara Foundation Charity Date Auction is back again this year due to public demand. For those of you who missed out on last years event, it was heaps of fun. Thank you to all our volunteers, the beautiful Darlyne, Michelle Tutt who unfortunately isn’t in Uganda anymore, Joanna, Carlo and the fabulous boys Rodney and Danny Ludlow. You guys were amazing and we raised a total of 11m which we used to build water reserves for the visually impaired students of Sir Apollo Kaggwa SSS.

We were able to build 2 of these tanks each with a holding capacity of 20,000ltrs. The construction has been completed and after the next rain harvest, the students will not be walking 2km to fetch water anymore.

This year we shall be focusing on a school we have only recently partnered with called Katale Kamese SSS in Nakaseke district.

The school has an incomplete but roofed 3 classroom block and an office, the office has no plaster on the walls and the floors are not cemented, it also has another incomplete four classroom block within which 2 classrooms double as a hall. Currently S.4 students sit in an outside shade which means they can’t study if it rains. The school does not have any laboratory; it has a makeshift kitchen and canteen which was not open on the day of the visit.

Let us join hand once again a give these students a roof for their classroom. We are open to any volunteers and sponsors for the Date Auction, just send us an email to info@mara-foundation.org.

Universal Access and Human Rights

One million Ugandans are affceted with HIV/AIDS and many still do not have acces to the necessary treatment they need to live a long a full life. People living with HIV/AIDS still do not have equal employment opportunities and stigma is still high. This years theme for World AIDS day calls for Universal access to treatment and advocation of human rights for all those living with HIV/AIDS. It is a reminder that the scorge is not yet over and the laxity in sexual behaviour should stop. We need to step up our campaigns against HIV infection and get off the sexaul network which is becoming the leading cause of HIV spread in the country.

The government should focus on increasing the reach of diagnosis and treatments facilities to people especially in rural areas. And also offer counselling facilities to those infected with emphasis on the available treatments and positive living.

Schools should also seize every opportunity to educate the youth about AIDS prevention and also offer Voluntary testing  and counselling to students.

On this day we remember one of Uganda’s fallen heroes who came out at a difficult time and changed our whole perception about people living with HIV/AIDS. Mr Phiily Bongole Lutaaya. He made it possible for people living with HIV AIDS to speak out about the reality of HIV/AIDS.