He is a savvy Venture Capitalist and tech entrepreneur who started his career in the finance industry, and today has become one of the driving forces behind the Nigerian tech industry. Kola Aina is the co-founder of the Emerging Platforms Group, where he and his partners are on a mission to build and be bridges to enable businesses take advantage of technology, consulting support and investment opportunities.
In this interview with Whoot Africa’s founder, Olushola Pacheco at the Ventures Park Campus in the heart of Abuja, Kola Aina shares on his work as an investor, tech entrepreneur and the creating opportunities to help small businesses grow, scale up and succeed.
About Kola Aina?
Professionally, I am a technology entrepreneur. I am a simple guy, I am driven by impact, I like art, I live an active lifestyle, I am a family man and I believe that when we die, we should die empty.
You have built quite a few businesses, and you are driving social change through technology, what inspires a man like Kola Aina with regards to everything you are doing right now?
Ventures platform is actually three businesses. Ventures Park is a co-working campus, ventures platform which is the seed stage accelerator and most recently we are starting a foundation called Ventures platform start up foundation, which is a non-profit organisation and the social impact side of everything that we do.
What inspires me every morning when I wake up right now, is to sort of make a dent in the world, make some impact either by helping organisations do things more effectively or helping people be better and moving the needle further. Africa is so behind in so many ways, Nigeria is behind as well. I am inspired to help build platforms and things that ensure that Nigeria moves in the right direction and helping to make the life of the average Nigerian better.
You talked about bootstrapping your business all the way; a lot of young people listen to that and feel discouraged considering the business world is moving in ways that mean you constantly need money to scale up. At what point did you start to attract investments and what were those things you think you did to attract funding?
Bootstrapping is very unattractive at the moment, but I still believe it is the best form of business financing. It’s not the gospel we preach at Ventures Platform, considering we are a ventures funding organisation. Bootstrapping isn’t that difficult, but it also depends on the kind of business you run, if you are in a service oriented business or one that the value of exchange is your intellect or abilities, then you can bootstrap.
The downside of bootstrapping is when you want to scale up really fast, there’s this psyche in the start-up ecosystem about growing businesses very quickly and that’s what makes bootstrapping very difficult. Personally, in the early stages we just couldn’t get outside funding even though we were very disciplined from the onset. We kept clean books, we paid our taxes, followed all the rules but we still couldn’t get credit and no one would invest in us, maybe it was because we weren’t a mono-product company, we were a service company and people couldn’t see the tangibility of what we were offering. One technique that I know that worked for us from experience is retainer-ship, if you can get a customer to prepay for a service at a discount less than the unit of cost, that can work in helping to fund your operations/ expansions and scale ups. Today we are bigger and we attract more funding because of our track record.
Tell us about the moment you first attracted funding for your business?
It was unsolicited; after about three years of bootstrapping the business, we started to get unsolicited enquirers and request from private equity firms and all sorts of firms, this actually gave us a confidence boost knowing we were on the right track. After about a year, we reached out to the people we wanted and we closed our first funding deal. We now invest in other businesses, having really had a whole lot of experience in being invested in as much as investing in others.
What are those things about a business that catches your investment eye, how does a start-up get your attention enough to receive funding?
At the moment, we now do all our investments through Ventures Platform, Ventures platform runs a syndicate fund which means we have others who also invest with us, they invest in our funds and we utilize the funds to invest in other companies.
Our thesis states that we believe tech is a power tool for scale. Primarily, we are interested in high growth companies and companies that can scale fast and tech is probably one of the best ways to innovate a solution and scale it really fast.
So, at the heart, we are interested in tech enabled businesses, but our first criteria is not the business, it is actually the founder. We are really keen on the quality of the founder, we are looking for founders who have a clear picture of their business, the why and the previous experiences that have motivated the business and their desire to solve problems.
We are also typically excited about founders who have domain experience, particularly offline because every tech enabled business has an offline version of it. We want to see evidence that you have overcome challenges in the past building a start-up, we are also interested in seeing your skin in the game. What have you done on your own? How far have you come? We talk to founders over a period of time and founders who are teachable implement changes and don’t remain on the same spot between when we meet them and when we finally choose to invest in them.
The business- There are so many problems to solve, from education to agriculture, finance, logistics et.al. Our process is pretty transparent and straightforward, we take applications and review the companies based on the stated criteria, and we look to select the best essentially.
There are more businesses than available funding, which means a large percentage of the businesses who come to Ventures Platform get turned down. For the sake of business growth and development, do you give feedback to businesses you turn down, is it policy or for a selected few who can take criticism?
We always give feedback as a standard policy. During our last application cycle, the companies that didn’t make it got a repository of content that they could learn from and use in order to help their businesses. We even notify businesses about our next application process because we believe businesses who are serious about feedback and growth would have made the required changes to their businesses.
Ventures Platform also does a number of programs here within the park that companies who don’t get our investment can benefit from. We have office hours on Fridays where companies can come in for free consulting and get their questions answered on a range of issues.
Investing for us means we have to return the investments or else we are out of business that is why we cannot afford to be sentimental about our choice of investments. We have to support the best companies and hope they will be more successful.
The business world isn’t a one-size-fits all, some business gain traction quickly while others take longer, and some founders have more charisma than others, have you ever invested based on gut feeling instead of paperwork?
Typically, my gut feeling is so disciplined, that my gut would not influence a bad investment decision. I follow my gut and never invest where the documentations don’t add up.
The reason why documentation is important for start-ups; we invest in start-ups, we are not late stage investors, we are early investors in the guys who have the small ideas and have built a small platform and have some customers and we all agree the business has the potential to succeed. For early stage businesses, some companies that come into our acceleration program are actually not registered yet, when they come in to us they go through due diligence with the legal processes and the needed support. Why it is important to have the legal aspect sorted out is because the way our program works, we fund you, provide accommodation and everything you need to succeed because succeeding means we are succeeding too. We are not looking for needy businesses, we are looking for businesses that will succeed without us, because those are the businesses that will succeed anyway. If a guy needs me to succeed then the odds of him succeeding are very slim.
Entrepreneurship is really about getting it done, we do the first bit of the work to last a business 6-12months after which we showcase these businesses at the DEMO day and hope they secure further funding to scale even higher, we are really an enabler and a bridge to get businesses from point A to Z.
Investors and Ruthlessness – Where do you draw the line as a businessman who couldn’t get funding for a long time and the now an investor?
It is very clear. I am an entrepreneur myself; at Ventures Platforms, we are co-founders, we say that and we act it. Our terms are flat, transparent and consistent, and we don’t negotiate them because we look for a certain kind of business, so it’s a one-size-fits all, and sometimes we invest outside of the batch, that is, investing in a company that isn’t coming through our acceleration program like that of Paystack.
Within our program, our investments are clear, we invest 20,000USD in exchange for 10percent equity, essentially at that point we are valuing the businesses at 200,000USD, I think that’s one of the fairest terms you would find around these parts, we try to be fair and consistent and our terms are open. Our exit from a business is not to share profit, our goal is that in two to three years the company raises larger investment and then we might choose to exit or the company gets bought and we get value for our investment or we sell our piece of the investment to someone else, we are long term people.
Africa is still very underserved when it comes to funding, you are currently working with the Buhari Administration to use ICT to help create job opportunities, also looking at the terrain right now, you have very few indigenous investors. What would you say to the average young person on what you are doing to help the government create opportunities for them?
First of all, I would say this loud and clear to any young person, don’t wait for government. I am not in government, but I serve on a committee, and one of the reasons why Ventures Platform was set up is because we don’t believe government is the solution to Africa’s problems, we believe that entrepreneurs and technology are a large part of the solution to Africa’s and Nigeria’s problem in particular.
Take advantage of any of the government programs that you can find, but do not wait for government. I know for certain, that with this administration some of the programs we worked on like the N-power project has helped about a hundred thousand people with trainings and jobs, people don’t believe but some things are happening, and government can only do so much. I think the role of government is really investing in infrastructure and providing an enabling environment but government really shouldn’t fund businesses.
We need more of our wealthy business people to invest, there are too many people with the investor title out here who are not writing any cheques. My advice to any young person is simple, look for a problem to solve and create a solution, people who build solutions make money and create jobs and if you get to do these things you are becoming a part of a bigger solution and not waiting for government to solve all your problems.
The tech space is exclusive, it is seen as an exclusive club for those who are not in the tech space and hence opportunities said to be available to entrepreneurs going to an exclusive few, and a disadvantage to those who have good business ideas but are deemed to be out of the tech exclusivity. Is this a perception from the outside or is the tech space the new “you can’t sit with us club”?
The first question is, if you are not building tech or interested in tech, why do you want to get in? Actually, if you go to the dictionary definition of technology, it’s not what we make it out to be, what most people call tech businesses are actually software businesses and software is just one part of tech, first of all we need to get the context right, if you ask most young people about what they think a tech company is, they would probably say a business that builds software to deliver some service.
My second perspective would be, most businesses can utilize tech to deliver their services more efficiently, at Ventures Platform, we say we are interested in supporting tech enabled businesses, so be it a hairdresser or a butcher, if you have a business that can deliver better with tech and can make money, then you get our support.
Tech is actually the least exclusive industry, I’d tell you why, the barriers to entry are super low, anyone can go on the internet and learn to code within a week, if you are interested and motivated, it has gotten so simple. The exclusive club is about the outliers that can become successful either on the side of building the company or growing the company, that is the exclusive aspect of it, but the cream will always rise to the top.
The tech industry provides opportunities for many people, technology on its own cannot function, tech businesses still need PR, communication, marketing and the conventional aspects of growing a business. For those of us in the tech industry, when we engage with non-tech people, we are interested in what value you can you bring to the table, you would sense exclusivity at the cream of the crop which comes naturally if you don’t have much to offer. If you have something to offer, no group will ever be exclusive for your access.
Supporting women in tech?
I am pro women, I love women founders. In a batch of 7 companies, we have two female founders and one of those two women runs one of our most successful businesses we invested in. Our team is also mostly female, our co-working team is 95percent female, with 5 percent on our acceleration team. We hosted a women’s program in march to mark the International women’s month and also offered good discounts to support women in tech who work at our co-working spaces. Ventures Platform also partnered with the Finnish embassy to teach coding and about 75 percent of the attendees were women.
Looking back on your journey, what words of wisdom would you share with upcoming businesses?
First advice would be, experiment quickly, but find focus. A lot of young people are trying to do too many things, focus on one product/business/idea until you figure it out or it doesn’t work and move to the next one. Be disciplined in the pursuit of less.
Secondly, ensure you have a true knot, what are your ethics? If you don’t define them early, your values will be called to question when you least expect it. When you compromise in the little things, you won’t go far.
Lastly, be prepared to be gritty. Nothing is impossible.
What would you want to be remembered for?
He gave all he had, and he gave all he could. I ultimately want to die empty, I want to have made impact with every single thing I do.