Wimbart Investor Comms Partner Interview – TLP Advisory
Wimbart recently released the second edition of our report “Startup Performance Reporting in Africa: Aligning Startup and Investor Expectations.” Building on the work we started in 2023, this year’s report included Q&As from our illustrious partners and also insights directly from startup founders. With this added perspectives, the report aims to provide valuable guidance for both founders and investors, driving stronger relationships and more effective communication across the African tech ecosystem.
In our partner interview with Odunoluwa Longe, Partner, TLP Advisory, Odunoluwa highlights the challenges startups face in becoming investment-ready, particularly for early-stage companies led by first-time founders who often lack compliance and structural frameworks. She notes why regular reporting is crucial especially in the African context and goes on to emphasize the importance of founders being intentional when selecting investors.
Please click here to download the full report. Enjoy the read.
What gaps have you noticed regarding investment readiness and structures between investors and startups?
A common denominator in how ready a startup is for financing depends on its stage and experience. Early-stage startups, especially first-time founders, may not be investment-ready when going to the market for the first time because they are so focused on product and customer acquisition that compliance and structure take a back seat. However, this becomes an issue when they want to take a first cheque (which is more often than not when they engage us). We then have to adopt a fire brigade approach to closing the gaps, which include formation structures, incomplete corporate or compliance filings, intellectual property ownership gaps, non-compliance with employment and tax regulations, and sometimes even co-founder issues. These gaps surface during legal, due diligence for our investor clients or legal audits when onboarding a startup client. This is less common with experienced or serial founders who understand the importance of getting their structure right – not just for investment readiness but for long-term sustainability and risk mitigation.
What core metrics and information do investors prioritise when evaluating tech startups?
This varies slightly depending on the growth stage, revenue, and sector, but the commonalities in the early stages are founders’ experience, sector expertise, market size, and customer acquisition strategies. For later stages, financial performance, business growth, and market traction become more critical. The startup’s past funding and the background of previous investors are also evaluated for compliance reasons and future exit strategies.
At the core, even the most impact-focused investors are temporary partners and must ascertain that there’s a clear path to returns and exiting their investment.
How can investors safeguard their interests and ensure comprehensive due diligence, given the gaps in founder reports?
Requesting frequent reporting is a balancing act between legitimate requests for accountability and transparency without seeming intrusive. It is a necessary request, especially in Africa, where credible independent information sources are limited.
With the recent founder scandals involving the continent, reporting and accountability have become even more important in building trust and legitimacy.
Before investing, investors should conduct extensive background checks on founders, using databases and talking to past employers and colleagues for integrity checks. Some firms even go beyond surface-level assessments by employing private investigators.
Investors should avoid rushing into deals based solely on the founder’s charisma or reputation and instead conduct comprehensive audits to verify the legitimacy and stability of the business.
For global investors, consult local investors who are closer to the situation and can authenticate claims.
What steps can be taken to strengthen the communication and relations between startups and investors in Africa?
Investors need to be empathetic and realistic in demanding reports – granular and frequent reports impede productivity, especially at an early stage. On the founders’ side, adequate reporting helps with accountability and can even help avoid tunnel vision and blind spots.
I always advise my founder clients: “If you would not hire an investor, do not take their money.”
Choosing investors with aligned goals, which is for the company to succeed, leads to organic communication and relations that benefit all parties.
