An expert believes e-commerce startups and data-driven apps would attract much investment in 2015.
‘Seun Onigbinde, the team leader of BudgIT, a CcHUB-incubated startup focused on making the Nigerian budget simpler and more easily accessible to all Nigerians, told HumanIPO e-commerce’s will be in constant focus.
He said: “E-commerce considering the high turnover will be in constant focus. Data-driven apps that can deliver value and can be personalized for experience will be considered.”
on the issue of startups selling stake, he said the proportion to sell should be determined by the amount of funds needed.
He said: “Selling stakes have to do with the size of fund a company needs and the valuation assessment as agreed by parties. I will say that a new company should not sell more than 25% at an initial breakout. Anything above might leads to gross dilution in the future and it is also a sign of weakness that owners can’t drive growth on an incremental scale.”
He said investor-founder conflicts often arise over the direction of the company.
“For investors interested in an exit strategy or quick monetization to raise the valuation profile, the founders always want to limit their urge to scale too fast. The biggest challenge is in deciding the right time to scale most especially taking more risks based on initial results. I see the biggest challenge as a contest of interests based on short/long term priorities. The risk appetite of the investor involved is also crucial,” he told HumanIPO.
To limit conflicts, he urged both parties to clearly define roles from the outset.
He said: “Founders must understand the interest of the investors and must choose investors who balance the mission and the expected returns of the organization. The ability of the founders to gain control of the direction of business is also crucial and that can be managed under a clear documented process.”