Chika Nwobi, Managing Partner, L5Lab has advised angel investors not to invest in projects they don’t understand. He said this while speaking on lessons learned from investing in Africa at the VC4Africa Investor Summit, DEMO Africa 2014, Lagos, Nigeria.
“Don’t invest in something you know nothing about,” he said. He also urged investors not to become a ‘pest’ to the company.
“Don’t be a pest to the company. If you check the call log between you and the founders and you discovered you are the one calling 80 percent of the time, you are a pest,” said Nwobi.
He also advised investors to allow the entrepreneurs to have and pursue their own goals.
“Do not live through them. You’ve had your own goal, let them have theirs,” he said. “Hold yourself back from trying to make them become you.”
On the issue of investors taking 70 percent equity in startups, he said such act would discourage other investors from seeking to invest.
He said: “Don’t take 70 percent equity in an early stage startup except you will go there to work as CEO. If you do that, the entrepreneurs will be thinking of something else to do – something they will own.”