Hey! thank you for reading issue 085 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 2,135 emerging founders.

Last month I was in London for work and a bit of vacation. I worked there as an investment banker years ago, and I still love going back.

Over lunch, one friend said something that became this newsletter. His line was “follow who know road.” His point is simple. If you want to do something, ask people who have already done it what they saw fail and what they saw work.

I agree with him. Most of us do this to some degree. Founders call other founders all the time. The best founders I work with go one step further. They pick specific problems their investors can help with and bring them into the conversation on purpose.

If you want more value from your investors, here are the three areas where I see the best early-stage founders use them.      

Many founders have raised only one institutional round. A follow-on round works differently. Your existing investors have been through several.

They know what price keeps the next raise possible. They already hold shares, so they are on your side when the terms are negotiated. The best founders bring investors in early and keep them in the loop as the round progresses.

Few early founders have set up a board before. Your investors have done it across several companies. They have seen which governance setups helped a company raise again. As you scale, good governance becomes a baseline.

The best founders use their investors to build a board with complementary skills, agree on the key performance indicators (KPIs) future investors will track, and set good habits early.   

Past seed, you need leaders who can carry the company to the next stage. Your investors have watched teams succeed and fail at this. Share your org chart and role descriptions with them as you plan. It is an easy way to learn from mistakes others made and avoid the same potholes.   

As a founder, no one wants this business to succeed more than you do. You carry the most risk. Most startups never raise even one follow-on round. Why not improve your odds by choosing to follow who know road?

If this issue made you think about how to get more value out of your investors, share it with another founder who needs to know this. They will appreciate you thinking of them.

That's all for today. As always, thank you for being an engaged reader. Let me know your thoughts on this issue. I read all your emails.

Until next time,

Jasiel

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The information contained in this newsletter is intended for discussion purposes only. This newsletter contains the current, good faith opinions of the author but not necessarily those of Accion Impact Management, LLC (“AIM”). The newsletter is meant for educational purposes only and should not be considered as investment advice or a recommendation of any type.  The documents may contain forward-looking statements.  These are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements.  Any forward-looking statements speak only as of the date they are made and AIM assumes no duty to and does not undertake to update forward-looking statements. This newsletter is not an offer or a solicitation for the sale of a security nor shall there be any sale of a security in any jurisdiction where such offer, solicitation or sale would be unlawful. An investment with AIM involves a degree of risk, and may only be made pursuant to the respective offering documents and organizational materials governing such investment.