For Olu Oyinsan, the founder Oui Capital, “It’s 8 times more difficult to raise money as a VC (venture capitalist) compared to a founder.”
According to the venture capitalist, starting a firm is not for the faint-hearted.
“Hindsight, they say, is twenty-twenty. Being a venture capital investor is not for the faint-hearted, especially if you’re not leaving your role at Sequoia Capital or a16z.”
He says referring to some of the world’s largest venture capital firms—Sequoia Capital and Andreesen Horowitz (a16z).
Olu meant what he was saying. In 2018, he quitted his job as the Vice President, Investments at Ingressive Capital which at that time was one of earliest vc firm in Nigeria. And prior to that period, he had worked as the Relationship Advisor at Silicon Valley Bank.
We can say he’s definitely not faint-hearted to make such a move. As a matter of fact, “Oui Capital” derived its name from the French word for “yes”. Guess he’s the guy who’s bold to take a step and won’t stop until he gets a “yes”.
So, how does venture capital work?
Olu Oyinsan says betting on founders building innovative solutions is what venture capital is majorly about.
Think of any brilliant idea that would serve as an innovative solution. Or look around you to observe problems that have been solved in a smart way. One of these ideas were most likely supported or financially backed by a venture capital.
And to raise money, venture capitalists stretch hands to financial institutions and wealthy individuals in order to support startups—the brains behind the idea. Both financial institutions aka LPs, wealthy individuals, and the venture capital firm would all have financial returns when/if the startup succeeds, share losses, or keep trying.
“Venture capital is that asset class, that financing vehicle that backs entrepreneurs or founders that are trying to build something where there are so many unknown quantities. And this is why venture capital is one of the asset classes where people must be comfortable with risk. What you do as a venture capitalist is that you are that provider of finance to the lady or the guy who’s building something that is bold, that the objectives or the outcomes are not really known.”
“Each person understands what they bring to the table, and that’s why venture capital has been around for maybe close to a hundred years now. People realise that it takes two to tango. To build a successful business, you need someone to provide the money and someone else who does the work.”
“a VC’s incentive is that you succeed.”
“For every equation, when both of you are on a team, you need both to win. What you see a lot of the time is one party can be more focused on what they want and forget what makes it worthwhile for the other party, and this is where conflict comes in.”
“If I go a whole year without finding a brilliant founder to back then, I might have no job, so I’m constantly looking for founders who are building brilliant, bold ideas. The question is, ‘Are you that founder?’ and this is where a lot of people stumble.
“The first thing I would say is to think about the person’s incentive. Not all VCs have the same incentives. Some are impact funds, some are pseudo-philanthropies, and some are family offices that are just looking for strategic investments. Some are corporate VCs who are looking for companies they can acquire down the line, so find out what their incentives are.”
“VCs are always looking for the next big opportunity, but like everyone else, we only have 24 hours a day, so you help us by bringing your company up to our line of sight.”
“Anybody can make a pitch deck. After the first conversation, the pitch deck almost takes a back seat and then it’s about all the other things that have to do with the business. The important thing is that the information they need to be attracted enough to dig deeper is what your pitch deck needs to do.”
You might have a brilliant idea to change the world 💡
Try not to sleep on it…reach out to a vc 🙂
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By Elijah Christopher