A Prep Guide: Your Pre-Seed Round

Are you thinking of getting into a fundraising round for your startup? This is a heavy handed task that can take between 6 months to 18 months for startups in Africa to raise a round. It is usually longer when you are at the pre-seed stage. So how can you prepare?

1. THE IDEA: make sure you validate your idea. How do you do this? Make use of your existing customers to narrow down on your value proposition. Conduct surveys with a pre-defined aspirational outcome. Don’t be afraid to pivot if your customer challenges your assumptions.

2. Use the feedback from your validation process to make changes to your product. Refer to the Lean Startup Methodology to understand how best you can do this. Remember, while you are passionate about the problem you are solving, a customer knows what they are willing to pay for.

3. FINANCIALS: This is where the rubber meets the road. Having poor financials will negate the impact story about the problem you are solving. Come up with a simple financial model that is a reflection of the market research you have previously conducted.

4. THE KPIs. If you already haven’t started doing this, make sure that you begin to define and track your impact metrics for success. Understand simple things like your customer acquisition costs, customer lifetime value etc…

5. A strong and crisp investor deck and resource materials such as a one pager summary of your startup’s value offering. You can read more on how to prepare a winning investor deck in our thread here: A Winning Deck

6. Valuation: Finally, make sure that you know just how much your company is valued at. Work with a corporate lawyer to define this and go through any term sheets that are shared with you by potential investors during your fundraising journey. You can more tips on how to work on your valuation in our previous thread here: Valuation: Tips & Tricks

We hope these tips will be helpful as you start raising your first round in Africa.

Feel free to drop us a DM or send us an email: founder@mamaglobal.co.ke if you need us to look through your decks as you prepare.

Kitawa Wemo is the founder of MAMA Social Ventures which is an impact company builder that supports startups cross the t’s and dot the i’s as they prepare for growth and investment.