In this interview, Ifeoluwa Adepoju, a lawyer with over 6 years of legal experience, shares her experience assisting startups set up structures, scale and fund-raising processes.
She is an LLM graduate of Business Law and currently heads the legal and compliance team at Future Africa.
Ifeoluwa has worked with over 50 startups giving her current role in a VC firm and in her capacity in the tech ecosystem.
What actually led you to pick interest in startups?
I’ve always been drawn to startups because they’re like the underdogs with big dreams. Imagine this: a small group of people with a brilliant idea, working hard to turn it into something amazing. That kind of energy and determination is contagious.
Before I moved into the VC space, I worked with many founders and their needs to get the right team, the right agreements, and getting them ready to become investable, starts right from the formation of the company.
There’s this one startup I worked with early on. They had this revolutionary concept, and I got to be a part of their journey. We faced challenges together, including legal complexities, and celebrated victories.
Seeing them grow from a small idea to a successful venture was incredible, and it fueled my passion for helping startups thrive.
It’s like being part of a story where every small decision can make a huge impact. That’s why I love startups – they’re full of potential, surprises, and the thrill of making things happen.
A lot of startups struggle to raise funds. What do you think is responsible for this?
It is one thing to have a great idea; it is another to tell your story. The impact of storytelling is great when it comes to storytelling.
One thing that makes each compelling story about how their product or service addresses a real market need is crucial in attracting investor interest.
Investors are not just looking at numbers; they want to be captivated by a story that resonates with the problem the startup aims to solve.
When startups can compellingly articulate their journey, it humanizes the business, making it relatable and memorable.
The power of storytelling lies in creating an emotional connection, helping investors understand not just what the startup does, but why it matters, a well-crafted narrative helps startups stand out in a crowded market. It differentiates them, making them more memorable amidst numerous pitches.
Successful fundraising often starts with a captivating story that leaves a lasting impression on potential investors, compelling them to be a part of the startup’s journey.
What are the things startup founders must bring to the table to convince VCs to make investment decisions?
Clear Vision and Mission: A well-defined vision and mission that communicates the startup’s purpose and long-term goals. VCs want to invest in founders who have a clear direction for their company.
Transparency and communication
Coachable Founders and Capable Team: A skilled and dedicated team with relevant expertise. VCs invest not only in ideas but also in the people behind them and teachable people.
Traction and Milestones: Demonstrable traction and achieved milestones, showcasing that the startup has made progress and has the potential for scalability. This could include user growth, revenue, partnerships, or product development milestones.
Market Understanding: In-depth knowledge of the target market, including a thorough understanding of competitors, potential challenges, and the overall industry. VCs want to see that founders have conducted comprehensive market research.
Effective Storytelling: The ability to tell a compelling story. Founders should be able to communicate their journey, challenges faced, and how they overcame them. Storytelling helps create an emotional connection with investors.
There is ongoing debate as why VCs prefer to invest in a Deleware Corporation than an LLC. What is your take on that?
Registering a company in Delaware, whether as an LLC (Limited Liability Company) or a Corporation, is a popular choice for many businesses due to Delaware’s favourable business-friendly laws for startups.
LLCs are “pass-through entities,” meaning that profit (or loss) is passed through to the owners as income, and is taxable as such.
VCs want no part of this as they are not investing solely to have any of the profits or losses of these businesses pass through to them.
Instead, VCs want to invest in C corporations, where the profit and loss are ascribed to the business and not the owners, allowing losses to be used to offset future revenues for tax purposes.
This does not mean that some VCs are not opened to taking on these risks and there are other options available to the VCs as well which I am writing on and should be published soon.
When is a startup due to have a board?
It is never too early or too late. What matters is having the right members who have the same goal and passion with you. You can wait till you become big and still not
This year we have witnessed some startups shutting down business/operations. Some due to financial mismanagement, economic situations, lack of skills. But for you, do you think there are foundational challenges with startups, especially in Africa?
Beyond the personal mismanagement by founders, where fundraising is sometimes viewed as an opportunity for personal financial gain rather than contributing to the company’s overall objectives, I’ve identified additional critical factors.
One major concern is the regulatory environment, which often lacks the conducive conditions necessary for a thriving business in many African startup ecosystems.
Furthermore, the engagement of shareholders and venture capitalists (VCs) post-investment is crucial. The lack of follow-up by investors can pose a significant challenge.
This emphasizes the importance of a robust board that includes experienced mentors. With the right board members providing guidance and mentorship, startups stand a better chance of navigating challenges and achieving scalable growth.
Don’t miss important articles during the week. Subscribe to techbuild.africa weekly digest for updates.