Happy Thursday! As we enter the third month of 2022, it’s difficult to know what to make of it. In some parts of the world, the COVID-19 pandemic seems to be heading into “remission”—precautions are being eased in many places and the African Tech Summit made a notable return to Nairobi last week. But much of the world has also watched in horror as Russia invades Ukraine, even as African students were impeded from fleeing the same conflict due to racism. It’s a complex world…
With that in mind, it’s comforting to dive into something consequential, but much less fraught. Here at The Trajectory Africa, we’re shifting our focus from key drivers of African VC opportunities to how funds capture those opportunities. In this episode, Track 8, I chat with Eghosa Omoigui, founder and Managing General Partner of EchoVC Partners, a seed and early-stage technology venture capital firm investing in underrepresented founders and underserved emerging markets. Prior to EchoVC, Eghosa worked for Intel, and in his last role served as the Director of Consumer Internet & Semantic Technologies for Intel Capital. A Kauffman Fellowship mentor, Eghosa is also engaged with organizations that support women founders and angel investors such as Astia, where he’s on the venture advisory board, and Rising Tide Africa, where he’s a board member.
If you’re like me, you’ve observed the fundraising trends in African tech with a keen desire to understand the ‘how’ and ‘why’ behind the ‘what’. In this conversation, Eghosa and I do the math (literally) to demystify how GPs aim to design high-performing funds, and how exits impact fund performance. More specifically, we talk through why consumer market plays are hard to exploit, what it actually takes to return a $50M fund (spoiler alert: it may involve 10 Paystack exits), why ownership and valuation heavily influence fund economics, and why investing in women (among other variables) is a key element of portfolio construction. Then, we’ll conclude with a case study of hypothetical Ghanaian fintech Moolah Mountain to help us understand how exits impact fund performance.
Sound like fun (minus the math part)? No worries; I’ve got you. Check out these excellent pieces about fund economics, exits and fund performance, valuation, and Y Combinator’s “New Deal” for startups to get up to speed quickly.
Until next time,
Tayo