Technology

More details in tech fundraising needed than publicity glitz

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Another day, another funding round closed. With the increasing number of capital raises happening across the continent and hitherto unheard-of amounts across Seed and Series A stage financing, beyond the momentary congratulations and digital pats on the back, the ecosystem is getting numb.

Our collective ‘wow’ threshold has been met and surpassed. We are now at a new level of expectation, and conversations point to agitation for more depth.

Journalist and blogger contacts make part of any public relations and marketing arsenal. Onto the next big thing or refining something old to favourable effect on a plateaued bottom line? Then these lists are a must-have.

A simple send and within a few hours, you have good distribution. If lady-luck smiles, you could break out and gain wider coverage than anticipated. Tomorrow, however, it will be someone else. Rinse repeat.

Given the majority public is not interested in the details beyond this, I have been guilty of the quick share. That direct message on social media or now with increased frequency, a call giving details on an upcoming fundraising announcement. A blurb and a picture have sufficed in the past.

I have had the privilege of reading many decks, getting visibility into the stages of product maturity, underlying business model fundamentals, and thereafter celebrating like we all should the clear milestone of fundraising.

The questions linger for others building and those supporting them. What were the deal terms? What did the capitalisation table look like before? How does it look now? What does the current structure mean for the company?

What does the fresh investor pool look like beyond their rosters? What is the investor’s culture and involvement like? What signals can we pick from current companies they hold and where they have divested or shed entirely? What is the rest of the industry not saying?

We need to paint a complete picture of the business side of business. It will help temper expectations and bring certain realities to light, resulting in different choices, especially for entrepreneurs and their teams.

Think of it as forensic journalism applied to venture capital and private equity deals, where non-disclosure agreements, information embargoes, and other gags exist. Some of these deals are fantastic and well-balanced. Some will reek of opportunistic takeovers, disillusionment, and disenchantment.

All angles need study. If for nothing else, to make our collective understanding better.

Njihia is the head of business and partnerships at Sure Corporation | www.mbuguanjihia.com | @mbuguanjihia