In Conversation: Mythri Sambasivan-George (Board Chairperson, Angel Network Botswana)

After a 20-year plus corporate career spanning multinational firms including KPMG, Grant Thornton, and Letshego, Mythri's desire to help middle and lower income people across Africa have access to the requisite funding to turn their ideas to tangible products landed her at Angel Network Botswana.  The network aims to help fund and accelerate unique and exciting startups both within and outside Botswana. 

In this interview, she take us through the history of ANB, its investment strategy, her view of the Botswana startup ecosystem and much more!

Please give us a bit of background to the formation of Angel Network Botswana

There is a big gap in the Botswana economy for private sector players who want to put their money where their mouths are and who are actually truly trying to accelerate worthy startups that solve real world market problem that have identified a market gap and that have a unique value proposition and product market fit. For these startups, their options are CEDA, LEA, etc,  but those are government agencies and they are run like government agencies on the government mandate.

And then you have BDC which funds very big ticket P50 million and above kind of deals. And you have the banks that won't touch startups. So there's this clear missing middle, where startups that have a really good idea, great founders good team got some traction don't know where to go to get that acceleration and funding support.

We formalized the idea of being this middleman entity and incorporated Angel Network Botswana as a company limited by guarantee and myself and several others signed up as directors on the board. We then started to seriously go out and recruit members who were like us, either business people or professionals who have a high net worth and wanted to give back to make a difference. We also then started to build out our whole presence in the Botswana market as well as beyond. We linked up with the likes of Botswana digital innovation hub in Botswana. We linked up with Africa Business Angels Network, which is a pan African umbrella angel body.

We linked with Jozi Angels, Future Females Investor Network and we started to invite founders both within Botswana and beyond to pitch to us for investment, mentorship and network access. And that was around mid to late 2020 that all of that happened. Fast forward about three years and last month we celebrated our three year anniversary. So far we have held 14 demo days for founders. We have 48 members. We've invested over a million pula into startups in Botswana and about P5 million into startups outside Botswana. We are incredibly excited and keen about what the future holds for Botswana startups.

What would you say is Angel Network Botswana's investment strategy?

Typically, we don't look at pre-seed or idea stage. We leave those to the likes of Botswana Digital & Innovation Hub to handle. 

The reason is that, already it's very hard to convince the investment community here in Botswana, private investors, to put their money into early stage businesses that already post revenue. So it's going to be an even harder sell to get them to buy into the concept of just investing into an idea like that, and doing it in a sort of corporate way. 

We look for any business that has some kind of market traction and has a well defined value proposition and identified market segmentation. The kind of ticket sizes that we do when we write our checks are between about P200,000 to P500,000. Cooler for the first round and we are quite sector agnostic.

However, there are some sectors we typically don't go into because they are capital intensive. Mining and construction are just some of the examples. But by and large, you know, we would even go into manufacturing and an example is we've invested not so long ago into Organic Natural Skincare,which is a mechanized business that manufactures organic skincare products out of indigenous raw materials from Botswana.

From looking at the pitch decks that you receive at ANB, what would you say are the qualities that Botswana startups lack in making themselves conducive for investment?

I think there's a couple of pieces that they fail to look at. For me, and maybe I'm biased because I'm a CA and a finance professional but there's a huge weakness, if not blindspot altogether, on financial acumen. 

I think one out of 10 can do this and nine out of 10 cannot maintain a fairly good set robust set of historical financial records. You know, and sometimes the financial records I'm talking about are underpinned by operational detail. Like how many subscribers did you get , and from there, you can then estimate or guesstimate what your subscription revenue could have been or should be or whatever the case is.

So I think on the financial side, there are a lot of weaknesses and that plays into the valuations that they attach to their businesses which are often excessively inflated, with no basis in fact.

The other area is stating what they want from the angels and understanding strategically what are they are looking to achieve as a business. What are they going out to capture? What's the big hairy, ambitious goal? And specifically, what's the ask of the angels that often doesn't come out clearly? And I think that that's because there's again, a lack of commercial acumen.

What advice would you give to startups who will be considering approaching ANB for funding?

I think the first thing is, don't wait until it's perfect. You should go out and test even an idea and take risks because the very foundation of being an entrepreneur is to take action is to take a risk, right? And I think we come from about six decades of having a very safe environment right, in which we operate. But if you want to win big, you got to take big, big bets. And oftentimes we find people are wanting us to back an idea but they haven't done much themselves around it.

So the first thing I would say is that the entrepreneurs who are coming to us should show that they've put some skin in the game. They've done something they've tried something and show us the results of those attempts, including the lessons that they've learned what they've gotten wrong. 

The second thing is you've got to try to get backers from within your circle before you come to third parties like Angel investors. So show again that you've been able to get the support of friends and family. And using that supportive friends and family, demonstrate what kind of results you were able to achieve.

And of course, then the other thing is be willing to pivot. Always be in love not with the solution that you've developed, but in love with understanding what is the problem out there in the market? And are you the right person? Have you got what it takes to solve that problem? Rather than you know, making a solution fit the market?

What VC trends do you anticipate in Botswana and the region in 2023?

Firstly, in Botswana alone, we went through a sort of dry spell as well in terms of investable startups that applied to us so we are open for applications through LinkedIn, Twitter, and Facebook. And we also receive direct applications. For example, I receive about three to four requests at least in a month from people on my own LinkedIn feed so it's not like we don't get these applications, but it's the quality right and the investability of these applications. And what we found was that the majority of them were just not doing anything unique. And they were also asking for too much to achieve too little. If that makes sense.

So they were not coming to us with an agile and fundable scalable idea or business, or they were saying, for example, give me you know, P5 million and I'm going to generate P5 million the next five years. Right. And that's not an angel investment. Right. So that's what we found initially. We then went back to the drawing board, we actually recruited a marketing agency that is run by a young woman founder herself, whom I was personally mentoring from a business and professional perspective. And we said, look, would you like to handle a kind of PR and awareness outreach for Angel Network Botswana, and see if that yields any different results in terms of the applications that we get here in Botswana? And so she did that and overnight, we started getting a flood of applications.

We now have about five deals in the pipeline that we think are doing really unique things. There's a lady who makes marshmallows using indigenous Botswana ingredients and using Botswana design ethos. And we're looking to try to mentor her then invest in her and see if we can get her to get to export level. There's another company that's doing, frozen drinks and things like that. And they're trying to get into Zambia, and we want to invest into them. And there are several others like that.

So the trend that we saw was people were, after the initial rush of COVID and the digitization push, now kind of lapsing back into the more SME run of the mill standard businesses. And those are not the type that startups you know, typically are and certainly that angels fund. So this new marketing piece that we started doing from around June 2021 has given us much better results and so we are looking forward to a fresh crop and pipeline of investable deals. 

To answer your question about the tech investment scene for Botswana, I think it's very much open for business. If you look at the government's digitization strategy, how they are imagining it and what the ministry of entrepreneurship is planning, it's promising. The eGov strategy BDH is rolling it and EBIT sees new focus areas for economic diversification, I think that there's a lot of potential for the talent that comes out of the likes of UB and other universities. 

NB: Interview has been slightly edited for clarity

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