Ghafla! is a local entertainment website containing content and (soon) digital downloads from East Africa. It was founded by two passionate fellas: Mr. Majani and Lyosi Mwedekeli. They are incubated at the Nailab, and one remarkable thing about them is that they won an investment just 3 days after their incubation. The investment valued Ghafla! at a staggering 14 million shillings! We caught up with the Ghafla!Guys for them to share with us exactly how they won their investors over.
Lesson 1: Have some prior work to show for
Mr. Majani holds the belief that investors don’t like to invest in absolute seed stage startups. “The risk factor is too high,” he states. So what did they do to solve this problem? They had their previous product, KenyanLyrics.com, which they had run for 18 months prior to pitching to investors. Ghafla! is basically a rebranding of KenyanLyrics. This gave the investors reassurance that Team Ghafla! had the vital experience needed to run the company.
Lesson 2: Learn the type of investors you are dealing with
From their experience, the Ghafla!Guys believe that there are two kinds of investors: product investors and people investors.
According to Lyosi, “people investors are those who believe that the idea for a company will keep changing, while the people behind the idea will hardly change over time. This kind of investor will invest after discovering some shining qualities in the founders.”
“Product investors are those who believe that a good product launched at the right time can carry even a bad team through to success. As the old saying goes, ‘you cannot stop an idea whose time has come.’ This kind of investors monitor trends in the market, then look for companies that appear to be riding the waves of change.”
Lyosi and Majani checked up on 88mph(the investment club that put money in them) and found that they were people investors. After finding this out, they then prioritised mingling with the 88mph guys over everything else. At every opportunity, they would invite people over to check out their product, and after that, they would engage in some non-technical banter to lighten the mood. This showed the investors that they were nice guys who are easy to work with.
Lesson 3: Look for investors who have done it before
Prior to meeting with 88mph, Mr. Majani and Lyosi had never put their product in front of investors before. One of the main reasons that attracted them to the 88mph group was that the investors had founded an online sports media startup before, named bold.dk. “The strategy for bold.dk is almost identical to the strategy we want to pursue at Ghafla!” said Mr. Majani, “when you have such a near perfect fit between the investors and the founders, a mutual respect for each other is developed, and there are less differences over the direction your company should take.” This similarity also endeared the investors to Ghafla! as they saw exactly what was needed to be done in that company.