Exit Strategies for African Startups

In partnership with

SDS 055: Exit Strategies for African Startups

Hey! thank you for reading issue 055 of Startup Definition Sunday (SDS). You can read past issues here.

SDS is the only newsletter that is redefining support for Africa's emerging founders. Every other Sunday, we cut through the fundraising and ecosystem noise to bring actionable insights to 1K+ emerging founders.

Thanks to the folks at JKBX for sponsoring today’s issue.

Love our newsletter? Click on our sponsor's ad below to help keep it free for emerging founders like you. Thank you for your support.*

When Beyoncé Gets Paid, So Could You

JKBX (pronounced “Jukebox”) lets you invest in royalty shares tied to real revenue streams. This isn’t crypto or real estate—it’s the songs people stream, hum, and love every day.

You can potentially earn quarterly income as music royalties flow from platforms like Spotify, YouTube, and TikTok.

What’s unique? Music doesn’t crash. It just plays.

Add a New Note to Your Portfolio

Visit www.jkbx.com/legal/offering-circulars for important Reg A disclosures. This content is not investment advice, nor is it an offer of securities. All investments involve risk and may result in loss.

If you’d like to sponsor future issues of SDS, here’s a simple way to do it.

Last Wednesday, I had dinner with the founders of one of our newest investments. The conversation quickly turned to the topic of exit strategies for African startups—a critical yet complex piece of the entrepreneurial journey.

Over the past two and a half years leading fintech investments in Africa, I’ve had the privilege of overseeing partial exits in two portfolio companies. These experiences have given me a front-row seat to the unique challenges and opportunities African founders face when planning their exits.

Whether you’re targeting an acquisition, secondary sales, IPO, or leadership transition, the right exit strategy can significantly impact your company’s long-term success. In this issue, we’ll explore the key timelines, options, and strategies to help you maximize value on your journey to exit.

Timing Matters for Exits

A successful exit doesn’t happen overnight. On average, it takes 7 to 10 years for African startups to transition from founding to a meaningful exit. That’s why it’s crucial to start planning your exit strategy from the very beginning.

Set clear milestones. Ask yourself: When do you want to sell secondary shares, get acquired, go public, or hand over leadership? By mapping out a timeline, you can reverse-engineer the steps needed to achieve those goals. This long-term approach will guide your strategic decisions as you scale your business.

Exploring Your Exit Options

The African exit landscape is evolving rapidly, offering founders more pathways than ever before. While acquisitions by global tech companies remain popular, local opportunities are equally promising. Consider strategic acquisitions by corporates, private equity (PE), or venture capital (VC) firms.

For founders in growth stages, secondary sales are becoming an attractive option. They allow you to raise capital and gain liquidity without the heavier dilution that comes with later-stage funding. On the other hand, IPOs, though limited in the African context, might still be viable for the right company on regional or international exchanges.

If retaining control is a priority, you may explore management buyouts or leadership transitions. Each option comes with its own benefits and trade-offs. Evaluate factors like valuation, timing, autonomy, and growth trajectory to determine the best path forward. Flexibility is key—keep an open mind and adapt to the evolving opportunities in the market.

Maximizing Value During the Exit Process

Regardless of your chosen exit path, the ultimate goal remains the same: maximizing value for you and your stakeholders. To achieve this, focus relentlessly on the metrics and milestones that matter most to investors and acquirers.

Prioritize growth, profitability, and scalability. Strengthen your competitive advantage and build a team that can ensure a smooth transition under new ownership. At the same time, protect your personal stake—negotiate terms that preserve founder equity, outline fair earn-outs, and clarify post-acquisition roles. Collaborating with experienced advisors can be a game-changer in securing the best terms during the deal process.

My Two Pesewas

Many founders instinctively default to M&A or IPO as exit strategies. While these are valuable pathways, don’t underestimate the potential of secondary sales. They can provide significant liquidity while allowing founders to retain control and drive future growth.

No matter the route you choose, careful planning and proactive execution are essential. With the right strategy, you can achieve an exit that aligns with both your personal and professional goals—paving the way for long-term success.

If you or someone you know wants to receive our 2024 issues, consider joining SDS to catch exclusive content in future editions.

Here’s what I am working on 2025:

An AI-Powered Newsletter That Brings You Inside My World

Why is it worth your time? I’m thrilled to announce the launch of my new paid newsletter, coming May 16 2025. For just $10/year, you’ll gain access to exclusive insights, strategies, and stories from inside my world. Sound good? Join me for the ride.

Countdown to launch: 17 weeks

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

If you haven’t yet, refer friends to enter into our cash prize draw.

I'll catch up with you in two weeks with more actionable insights.

Jasiel

Find me on X, LinkedIn or Book a 1:1 Call

Whenever you are ready, there are 3 ways I can help you:

1. Review your deck for investment: It takes less than 5 minutes to complete.

2. Improve your investor updates using these two templates.

3. Promote your brand to 1000+ early-stage and aspiring founders by sponsoring this newsletter.

^{*Ads are paid placements and not endorsements; we are not responsible for any actions or outcomes resulting from clicking or engaging with them.}