During the Technology, Media, and Telecommunications (TMT) Business Law Breakfast Series, held on May 2nd, 2024, Olu Oyinsan, Managing Partner of Oui Capital, captivated the audience with his invaluable insights into the metrics that drive investors to say ‘yes’ to startup founders’ pitches.
With a blend of humor, Olu playfully referenced the French meaning of “oui,” the name of his fund, hinting at their affirmative approach to investments. He elaborated on their decision-making process, emphasizing a significant focus on early-stage investments due to their flexibility and risk tolerance, which aligns perfectly with their internal metrics.
Central to Olu’s discussion was the pivotal role of market analysis, comprising 60% of their decision-making process, closely followed by the strength of the startup team and the viability of their business model. He underscored that the remaining 40% is influenced by the founder’s qualities and capabilities, highlighting the importance of alignment between founders and investors.
In an exclusive interview with TAM, Olu shared his perspective on the event, describing it as a much-needed platform for fostering dialogue and collaboration within the tech ecosystem. He said, ”TMT breakfast is a unique and much-needed event. Often, the tech ecosystem operates in vacuums or silos, so it’s essential to have anchors in the ecosystem who bring together investors, startup founders, regulators, institutions, and service providers for dialogue. Events like this provide such opportunities”.
When asked why investors often decline to provide reasons for rejecting investment proposals, he emphasized the significance of understanding investor objectives, noting that misalignment often leads to unsuccessful fundraising endeavors.
”Every company’s objective with an investor is to raise money. However, one of the many reasons why these objectives are sometimes unsuccessful is a lack of understanding of the investor’s objectives. There are different types of investors with varying risk tolerances and objectives, such as debt and equity investors. Entrepreneurs approaching investors may not fully grasp the investor’s objectives, leading to misalignment and potential rejection. When investors say no, they may not always provide reasons or may sugarcoat them to avoid criticism. However, with critical thinking and attentive listening, one can discern the underlying reasons and use them to improve.” He stated.
Olu emphasized that thoughtful consideration and active listening can help startup founders to discern the underlying causes of rejections, as many investors are outright but not truthful.
In Nigeria’s startup scene, founders face many challenges like getting funding, tough competition, and dealing with rules and infrastructure issues. As we reported earlier, Tom Blomfield, a group partner at Y Combinator, highlighted the importance of presenting a compelling vision, market understanding, and growth strategy, similar to what Olu mentioned, to convince investors of the startup’s potential to achieve extraordinary returns.
