simple.Capital

Valuing your business should be… 𝘀𝗶𝗺𝗽𝗹𝗲. Whether you’re preparing for a fundraising round or just trying to get a clearer picture of where you stand, here are six actionable tips to guide you: 𝗧𝗿𝗮𝗰𝗸 𝗬𝗼𝘂𝗿 𝗩𝗮𝗹𝘂𝗲 📈 Valuations are dynamic—they grow as your business grows. Keep a model that updates with key milestones like new clients, revenue growth, or market shifts. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗣𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲𝘀 🔍 Not all investors value businesses the same way. Angels focus on vision, VCs prioritize growth, and PEs look at profitability and scalability. Research your audience. Tailor your valuation approach to align with what matters most to them. 𝗕𝗲 𝗦𝘁𝗼𝗿𝘆-𝗥𝗲𝗮𝗱𝘆 📖 Investors buy into potential, not just numbers. Your valuation should fit into the bigger narrative of your vision and where you’re headed. Practice articulating why your business is worth investing in and how your numbers back it up. 𝗖𝗵𝗼𝗼𝘀𝗲 𝘁𝗵𝗲 𝗥𝗶𝗴𝗵𝘁 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗠𝗲𝘁𝗵𝗼𝗱𝗼𝗹𝗼𝗴𝘆 ⚙️ High-growth startups often use revenue multiples, while established businesses may lean on discounted cash flows and/or EBITDA multiples. Match the method to your industry, growth stage, and strategy, and be prepared to explain your rationale. 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸 𝗔𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗵𝗲 𝗠𝗮𝗿𝗸𝗲𝘁 📊 Study valuations of similar companies in your industry and region. Use this to gauge whether your valuation is realistic. Market conditions shift—stay informed about recent deals and trends to keep your valuation grounded. 𝗚𝗲𝘁 𝗣𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹 𝗜𝗻𝗽𝘂𝘁 🤝 Partnering with experienced advisors ensures your valuation is credible and aligns with market standards. Don’t hesitate to seek guidance—it’s an investment in getting it right. Valuing your business is as much an art as it is a science. These tips are a roadmap, but every business is unique. At simple.Capital, we help entrepreneurs navigate this process with clarity and confidence—because valuing your business should always be… simple. #Valuations #Fundraising #Entrepreneurship

simple.Capital spent the day at AfricArena 🌍 Cape Town has been full of activity and events over the past two weeks, bringing together the African Early Stage Investor community/ecosystem. What stands out most at these gatherings isn’t just the panels or pitches—it’s the unexpected moments in between. A quick hello to someone you’ve been meaning to catch up with, a chance encounter that turns into a valuable introduction, or a conversation that wraps up with, “Let’s chat next week.” It’s a reminder that investing is as much about people as it is about capital. Special thanks to Keith Jones for the invite! #AfricArena2024 #CapeTownTechSummit

Over the last two days, our partner Blake Musgrove represented simple.Capital at the Africa Early Stage Investor Summit. From insightful panels to impactful networking, Blake connected with some of Africa’s most dynamic founders, investors, and visionaries. At simple.Capital, we’re proud to be part of this thriving ecosystem — working alongside entrepreneurs and helping drive growth across the continent 🌍 #AESIS2024 #VentureCapital #Innovation #Growth

Last night, we hosted a simple.Supper in Stellenbosch—an intimate gathering of investors, partners, founders, and clients of simple.Capital. simple.Suppers are designed to foster meaningful connections, spark collaboration, and exchange ideas in a relaxed, authentic setting. We also have a tradition of partnering with entrepreneurs and young brands at our events as a way to support and showcase their work. We were delighted to welcome Rob Heyns from Avante Brandy who shared his inspiring entrepreneurial journey and treated us to a tasting of his exceptional brandy, including the Avante XV Founders’ Cape Brandy, which received 5-stars in this year’s Platter’s Guide. To everyone who joined us, thank you for making the night one to remember: Daniel Swiegers Chris Zietsman Retief Gerber Charl Cronjé Lourandi Kriel Rachel Offenburg Luyolo Sijake Jurie de Kock CA(SA) Abri Nel Eduard du Plessis, CA(SA) Heinrich de Lange Brett Commaille Blake Musgrove Willem van der Post Daniel Du Toit Jonathan Smit Here’s to many more simple nights of connection, collaboration, and growth 🚀

The world of debt financing can seem overwhelming, but it doesn’t have to be. At simple.Capital, we make it… simple. 💼 How do you pick the right debt instrument? Here’s a simple breakdown: 𝗧𝗲𝗿𝗺 𝗟𝗼𝗮𝗻𝘀 – 𝗧𝗵𝗲 𝗖𝗹𝗮𝘀𝘀𝗶𝗰 𝗖𝗵𝗼𝗶𝗰𝗲 ✔️ Best for: Established companies with steady cash flow. Borrow a lump sum, repay it over time with interest—perfect for major projects like expansions or equipment purchases. 👉 Key terms: Interest rate (fixed/variable), prepayment penalties, collateral. 𝗥𝗲𝘃𝗼𝗹𝘃𝗶𝗻𝗴 𝗖𝗿𝗲𝗱𝗶𝘁 – 𝗬𝗼𝘂𝗿 𝗦𝗮𝗳𝗲𝘁𝘆 𝗡𝗲𝘁 ✔️ Best for: Managing cash flow or handling seasonal fluctuations. Borrow what you need, when you need it, and pay interest only on what you use. 👉 Key terms: Draw period, utilization fees, financial covenants. 𝗩𝗲𝗻𝘁𝘂𝗿𝗲 𝗗𝗲𝗯𝘁 – 𝗚𝗿𝗼𝘄𝘁𝗵 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻 ✔️ Best for: Venture-backed startups extending runway without giving up more equity. Works well alongside VC funding to fuel rapid scaling. 👉 Key terms: Warrants, covenants, shorter repayment terms (2–3 years). 𝗥𝗲𝘃𝗲𝗻𝘂𝗲-𝗕𝗮𝘀𝗲𝗱 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 – 𝗣𝗮𝘆 𝗮𝘀 𝗬𝗼𝘂 𝗘𝗮𝗿𝗻 ✔️ Best for: High-growth companies with steady recurring revenue. Repay as a percentage of monthly revenue, avoiding fixed repayment pressure. 👉 Key terms: Revenue share, repayment cap, minimum payments. 𝗖𝗼𝗻𝘃𝗲𝗿𝘁𝗶𝗯𝗹𝗲 𝗡𝗼𝘁𝗲𝘀 – 𝗧𝗵𝗲 𝗛𝘆𝗯𝗿𝗶𝗱 ✔️ Best for: Early-stage startups not ready for a full equity round. Converts debt into equity in the next funding round. 👉 Key terms: Discount rate, cap, maturity date. Which One Is Right for You? • Your Growth Stage: Early-stage startups may lean on convertible notes, while scaling businesses often favor venture debt or term loans. • Flexibility vs. Stability: Need predictable repayments? Term loans or credit lines work best. Looking for flexibility? Revenue-based financing may be the answer. • Cash Flow: Stable revenue? Classic options like term loans fit well. Unpredictable income? Revenue-based financing can reduce repayment stress. At simple.Capital, we’ve helped entrepreneurs navigate these choices to fuel their growth. Let us help you simplify the complex world of debt financing. Drop us a message today! #Debt #Fundraising #VentureDebt

Last night, simple.Capital partnered with Darkies in Tech to host a webinar on what it takes to be investment ready in today’s market. We shared essential steps for founders—like refining pitch decks, crafting compelling investment memos, and demonstrating traction. The session was filled with practical insights to help founders stand out in a competitive market. Thanks to everyone who joined us live and contributed to the discussion. Can’t wait for the next one! CC: Ntsako Mgiba Daniel Swiegers Blake Musgrove

Ever wonder how VCs make their final investment decisions? Getting investors on board is a complex process, and a pitch deck alone isn’t enough to seal the deal. Most VCs follow a structured process: 1. Analyst or Associate 2. Investment Partner 3. Chief Investment Officer 4. Investment Committee After your meeting, your pitch needs to go through multiple internal discussions. The person you spoke to now has to sell your opportunity up the chain—and they’ll likely use an investment memo to make that case. 📝 Here’s why an investment memo makes a difference: • 𝗖𝗼𝗻𝘁𝗿𝗼𝗹 𝘁𝗵𝗲 𝗻𝗮𝗿𝗿𝗮𝘁𝗶𝘃𝗲: You shape the message even when you’re not in the room. Investors will often pull directly from your memo, ensuring your key points are front and center. • 𝗧𝗲𝗹𝗹 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝘀𝘁𝗼𝗿𝘆: A pitch deck sparks interest, but an investment memo provides depth, standing on its own with the full context of your business. • 𝗟𝗼𝘄𝗲𝗿 𝗳𝗿𝗶𝗰𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀: With a clear blueprint, you’re making it easier for investors to champion your deal, answering common questions upfront. At simple.Capital, we know the ins and outs of what investors are looking for. If you want an expert perspective on crafting an investment memo that makes an impact, send us a DM. #FundraisingTips #Startups #Funding  

📢 𝗠&𝗔 𝗶𝘀 𝗵𝗲𝗮𝘁𝗶𝗻𝗴 𝘂𝗽 𝗶𝗻 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝘁𝗲𝗰𝗵. 𝗔𝗿𝗲 '𝗱𝘂𝗮𝗹-𝘀𝘁𝗮𝗸𝗲' 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝘁𝗵𝗲 𝘀𝗲𝗰𝗿𝗲𝘁 𝘀𝗮𝘂𝗰𝗲? There's a growing — yet underappreciated — trend to watch in Africa's tech sector: the involvement of 'dual-stake' investors in M&A deals. These investors own shares of both the acquiring and target companies. So they often have deep insights into the operations and strategies of both businesses, allowing them to identify synergies that others might miss. At the same time, they can leverage their relationships with both parties to build trust, align interests, and streamline negotiations, potentially leading to more favorable deal terms. Here are some recent examples of dual-stake investor involvement in Africa Tech M&A: • Ventures Platform Fund played a leading role in facilitating the acquisition of SME-focused payments platform Traction Apps by B2B e-commerce platform OmniRetail Technology Limited. Dr. Dotun Olowoporoku, Managing Partner at Ventures Platform, commented, "We believe in leveraging the strengths of our portfolio companies to create more robust solutions." • 4DX Ventures was rumored to have been the driving force between the merger of B2B e-commerce juggernauts Wasoko & MaxAB when news of the deal first became public. After it was finalized, the firm confirmed that it was "intimately involved in this merger process." • simple.Capital played a crucial role in the acquisition of FlexClub’s Mexico subsidiary by Ugandan vehicle financing platform Asaak. Blake Musgrove, Partner and CIO at simple.Capital, noted, "As active investors in both Asaak and FlexClub, we spotted an opportunity to procure [this] acquisition." What’s your take on the rise of dual-stake investors on the M&A scene — a boost for Africa's tech landscape, or are there risks we need to consider more carefully? __________________ 🚨 For more in-depth analysis on trends like this, subscribe to Afridigest — your intelligent guide to modern #business in #Africa: afridigest.com/subscribe.

Imagine only having 2.40 minutes to convince investors that your company is the next big thing... Here are six tips to make your pitch deck hard to ignore: 1. 𝗞𝗲𝗲𝗽 𝗶𝘁 𝗰𝗼𝗻𝗰𝗶𝘀𝗲 Docsend research shows that VCs now spend just 2.4 minutes on your pitch deck. That’s down from 3.8 minutes in 2018. Decks with 8-11 slides are the sweet spot. The days of long presentations are over—focus on clarity and efficiency. In 2024, the average successful pre-seed pitch deck was 10 slides compared to 14 in 2023. 2. 𝗠𝗮𝗸𝗲 𝗶𝘁 𝗲𝗮𝘀𝘆 𝗳𝗼𝗿 𝗮𝗻 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝘁𝗼 𝗴𝗲𝘁 𝗶𝘁 Don’t expect investors to have all the details and nuance of the industry that you do. Making it easy and simple helps the investor feel in control and understand your idea. 3. 𝗗𝗼𝗻'𝘁 𝘀𝗵𝘆 𝗮𝘄𝗮𝘆 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗧𝗿𝗮𝗰𝘁𝗶𝗼𝗻 𝘀𝗹𝗶𝗱𝗲! Investors love to see progress, even if it’s early-stage. Showcase customer feedback, letters of intent, testimonials, or beta users. No traction equals a red flag for most investors. 4. 𝗦𝘂𝗽𝗲𝗿𝗶𝗼𝗿 𝗱𝗲𝘀𝗶𝗴𝗻 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 Good design can be the difference between losing interest in the first 30 seconds and keeping an investor engaged past that 2-minute mark. Use simple fonts and limited colors (2-3 max), get professional team photos — it builds credibility. 5. 𝗖𝗹𝗲𝗮𝗿 𝘀𝗹𝗶𝗱𝗲 𝗵𝗲𝗮𝗱𝗶𝗻𝗴𝘀 Make sure your slides are easy to navigate. Use clear headings and subheadings so investors immediately know what they’re looking at. It’s all about making their job easier. 6. 𝗣𝗲𝗿𝗳𝗲𝗰𝘁 𝘁𝗵𝗲 𝘀𝗹𝗶𝗱𝗲 𝗼𝗿𝗱𝗲𝗿 Purpose, Problem, Solution, Product, Traction, Business Model, Market Size, Competition, Team, and The Ask. If you’re looking for some feedback on your pitch deck, send us a DM, and we’ll review your deck and share some of our thoughts 🚀 #Fundraising #VentureCapital #Investors

Founders - you must master the SAFE note. 💸 If you're an early-stage founder, you will likely raise money through a SAFE. According to my friend Peter, 86% of rounds below $500k are raised using SAFEs. Let’s break it down. 𝗦𝗔𝗙𝗘 𝘀𝘁𝗮𝗻𝗱𝘀 𝗳𝗼𝗿 "𝗦𝗶𝗺𝗽𝗹𝗲 𝗔𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗙𝘂𝘁𝘂𝗿𝗲 𝗘𝗾𝘂𝗶𝘁𝘆." It's a contract between you and an investor, giving them the right to receive equity in the future, under certain terms. There are 3 key terms you must know: → 𝗣𝗿𝗶𝗻𝗰𝗶𝗽𝗮𝗹: This is the amount of money the investor gives you. It determines the future share of the pie they will get. → 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗖𝗮𝗽 This is the maximum valuation at which the SAFE converts to equity. In other words, it is the maximum price an investor will pay for your startup. → 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 𝗥𝗮𝘁𝗲 The discount rate applies at conversion and give SAFE investors a lower price per share than new investors. Want to dive deeper into SAFE notes? Here's a free guide I wrote to help you get started 👇 📝 https://lnkd.in/dTs6wniN 📝 Founders - understanding these terms is key to knowing how much equity you're giving up and helping you preserve as much ownership as possible. --------------- Enjoy this? Follow me @Hugo Rauch or subscribe to my newsletter for more startups and VC stories.