KolCo consultants are lead mentors on a pan-African "post-accelerator" program for digital startups that aims to provide young firms on the continent with access to capital and experienced mentorship.
Launched in 2017, XL Africa is supported by the World Bank Group's infoDev program with financial assistance from the governments of Finland, Norway, and Sweden. XL Africa is implemented by KolCo, IMC Worldwide, and VC4A.
A key XL Africa programmatic component is the XL Africa Academy, a ten-module curriculum designed to closely complement the mentorship and workshop aspects of the broader program for the 20 selected startups involved.
Below, KolCo presents Module 1 of the XL Africa Academy (video lectures, downloadable documents) along with an overview of Modules 2-10.
The full curriculum can be accessed at VC4A's Academy website.
XL Africa Academy Curriculum
MODULE 1. Are You Ready? The Investment Readiness Framework
MODULE 2. What Do You Mean, Risky? Investors’ Risk Reduction Framework
Startups’ optimism is essential, but can blind them to the risks that investors see in their businesses. This module presents a framework to help companies see their businesses in the risk reduction framework of investors, for example, understanding that investment “use of proceeds” should focus on reducing risk to increase company value.
MODULE 3. African Investors’ Due Diligence Priorities and Practices
The due diligence process can be a time sink for both companies and investors, especially when it becomes an endless loop. This session will address the components of due diligence and those of particular interest to different African investors.
MODULE 4. Scaling Your Company
Just as “investor readiness” means different things to different people, “ready to scale” also has several meanings.
MODULE 5. The Promise and Perils of Corporate Partnerships
When the right corporate partnership can be formed with a start-up, it can lead to growth in markets otherwise inaccessible to a promising company. This session looks at best practices in corporate development through six stages.
MODULE 6. Company Valuation
How much is your company worth to investors? This module will look at several of the methods used by investors, in both Africa and elsewhere, to value companies for equity investment. In particular, this session focuses on why Silicon Valley valuations are higher than comparable companies anywhere else in the world.
MODULE 7. Options for Growth Investment Structuring
Within the range of equity and debt financing options are myriad structures, including convertible preferred shares, convertible notes, and revenue sharing debt as an equity alternative. This module will cover the convertible note controversy – why some prominent Series A investors don’t like them – and feature investors and others from the African ecosystem familiar with the investment structures of recent financings.
MODULE 8. Understanding Term Sheets
Equity term sheets include terms that are often unfamiliar to start-ups, including anti-dilution protection, liquidation preferences, drag along rights and founder vesting schedules. This module will highlight the most important lessons of the recommended text Venture Deals, and highlight what to expect in African equity term sheets. This book is recommended as the most entrepreneur-friendly discussion of an extremely complicated subject, including important recommendations about negotiation tactics.
MODULE 9. Financial Models
Finding the right balance between optimism and realism is challenging when it comes to developing financial models to present to investors. This session will dig into some of the core issues including the types of financial ratios that investors examine and the sensitivity analysis they want to see.
MODULE 10. African Investor Perspectives
- Networking with Investors
- Dynamics of Investor Due Diligence
- Best Practices for Pitching Investors
- African Investor Capital Continuum
- Deal Structures and Term
Module 1: Are You Ready? The Investment Readiness Framework
While companies often think they are ready to accept investment, this is often not the case. This module presents a framework for self-assessing investment readiness for African tech companies that explores all five meanings of the phrase “ready for equity investment”:
1. Is equity the right type of financing for your company right now?
2. Have you reached the top of Steve Blank’s Investor Readiness Level?
3. Do you have Metrics Momentum?
4. Are you ready for the 12-step financing process?
5. Are investors ready for you?
Outcome: Companies will be able to self-assess their readiness for equity investment and in the process identify steps to increase it. Working with mentors, companies can then develop and execute a plan to accelerate readiness.