Securing Fundraising in 2024: Key Strategies

SDS 030: Securing Fundraising in 2024: Key Strategies

Hey! thank you for reading issue 030 of Startup Definition Sunday (SDS).

SDS is the newsletter for new & aspiring founders, bringing you clarity one actionable tip at a time.

SDS arrives every two weeks (you guessed it) on Sundays.

In every issue you can expect:

• 1 actionable tip you can implement right away

• 1 article you should read

• 1 gift for founders

Let's dive in:

(P.S. I'll never sell your information, ever)

Greetings!

Welcome to the first issue of SDS for 2024.

Writing to you every two weeks in 2023 was a joy. I am excited to share another 26 issues with you this year so stick around for the ride (and tell one friend to join you)

In case you missed the NYE 2023 issue, you can find it here.

I spent most of my Christmas holiday into the New Year working to close a deal on a company I am very excited about.

This deal will likely define the kinds of companies that I am looking to back in 2024 and beyond.

While it has been a particularly busy way to start the New Year (my sleep schedule is all out of whack), there are some lessons that are beneficial for new and aspiring founders like you or someone you know.

So today, I want to pull back the curtains on what it will mean for founders to close fundraising rounds in 2024.

There are several things that have changed in the Africa tech fundraising landscape for investors, but most founders are unaware of these things.

Over these last few weeks, I have discovered that most founders theoretically know that the fundraising landscape has changed, but practically are unprepared for this new world.

In today's issue, I want to offer 3 things that any founder planning to fundraise in 2024 has to keep in mind.

Why should you care?

One reason: successfully closing a funding round gives you the chance to actually succeed - you can’t succeed if your company runs out of money.

Here are the 3 things you need to do today.

Separate business & personal accounts: First and foremost, it's essential to separate business and personal accounts. Having different accounts for personal and company expenses not only demonstrates fiscal responsibility but also makes it easier to provide clear financial statements during diligence. Trust me, investors will definitely be scrutinizing your accounts with a fine-tooth comb, do not wait until due diligence to figure it out. External financial audits of founders’ accounts will become commonplace in 2024. Start now to ensure that everything is in order before going out to fundraise.

Clean legal & business structuring: From day one, you need to figure out the appropriate authorities to register your business. It's imperative to establish clear ownership structures and shareholding agreements. These are now considered the baseline expectation from investors, as they instill confidence and reduce legal risks. So, prioritize putting your legal and business structuring in order as early as possible. Depending on the country you are operating in, some of the authorities you should consider registering your business with are tax authorities, data protection authorities and chambers of commerce.

Clear governance & compliance structures: Finally, you can't overlook the importance of clear governance and compliance structures. Nowadays, investors expect startups to prioritize the creation of robust governance frameworks. Focus on establishing frameworks that allow for independent oversight and compliance. This includes clear founder agreements, board resolutions and shareholders’ agreements. This may take some time to develop, but trust me, it will be invaluable in the long run.

As an investor, I am incredibly excited about investing in Africa tech. I am actively looking forward to reviewing pitch decks and investing in great founders.

If I may offer you my two pesewas amidst all the ups and downs of 2024 and the so-called “funding winter”:

Great companies will still get investor money. Do not let things within your control like, separating business and personal accounts, ensuring clean legal and business structuring, and establishing clear governance and compliance structures, be the reason you don’t get funding.

If you or someone you know should be receiving 2024 issues in their inbox, consider joining SDS so you don't miss exclusive sections in future editions.

If you only read one thing this week, read this...

On Saturday, I shared my first LinkedIn creator post.

Why is it worth your time? Several newsletter subscribers and X followers, have been encouraging me to post more on LinkedIn. But, it always felt like LinkedIn is not my kind of platform. However, in 2024 I am committing to doing things that are uncomfortable. So, a few times a week I will be sharing my ideas on LinkedIn and I hope you’ll join me as I do this uncomfortable thing.

Founder's Corner

As an investor, I know how challenging it can be for founders to get noticed by angel investors, especially without the right connections.

That's why I created an inbound form to allow founders to share their decks directly with me. It takes less than 5 minutes to complete. By breaking the mold and providing an alternative way for founders to connect with investors, I hope to help level the playing field.

That's all for today! As always, thank you for being an engaged reader.

Until we meet again in two weeks, here's how we can stay in touch:

• 🐦 Find me on Twitter

• 💬 Hit me up on Linkedin

• 💌 Email me

• 🚀 Sponsor SDS (Reply to this email)

I’ll see you in two weeks,

Jasiel