Why startups need to better understand how VC works, and how it goes both ways
- Startups should be deliberate in choosing the right investor and do research on their investment thesis and stage of investment.
- Warm introductions or referrals are important, but some VCs are open to cold introductions.
- Startups often don't know how to engage with VCs before and after investment.
The lack of understanding of venture capital among African startup founders is a significant issue that needs to be addressed. Startups should be more deliberate in their approach to VCs, conducting research and understanding the process. VCs also need to empathize with founders and provide value beyond just capital. The convergence of operators becoming investors is a positive trend that brings operational experience to the ecosystem.
