In Conversation: Tigele Nlebesi (Venture Builder, ALX Ventures)

As a venture builder, Tigele's job involves connecting startups to investors and other stakeholders, and then building and managing these relationships over the long-term in a way which adds value to the companies.

In this interview, she takes us through what makes accelerators and incubators tick, how startups in Botswana can better prepare for fundraising and her overall thoughts in the venture capital industry in Botswana.

Please give us a brief overview of the work that you do

I'm an ecosystem builder, and I currently work as a junior specialist at ALX Ventures, which is a bespoke startup accelerator program building and scaling companies from the idea stage to launch and scale. ALX Ventures operates under The Room, a staff augmentation and technology services company on a mission to connect millions of young Africans to opportunities by 2030.

The ALX Ventures program consists of three founder pipeline stages. Our Founder Academy supports entrepreneurs building companies at the idea or early prototype stage. Our incubator program targets post-launch and early adopter/traction stage companies, and our growth accelerator helps companies find product market fit and expand into new markets. 

I work with the founders in our incubator program. These startups tend to need investor readiness support as they look to secure growth capital and scale their ideas.  A significant part of my job involves connecting our startups to investors and other stakeholders and then building and managing these relationships over the long term in a way which adds value to the companies. We also run sprints which provide customer acquisition and product development support.  

Botswana has had numerous incubators and accelerators which have not yielded much investment-ready startups. From your professional expertise, what makes an accelerator/incubator model produce desired results?

I think the most important thing to start off with is operational expertise. That’s the crux of the sort of value accelerators and venture builders provide,  along with extensive on-the-ground experience. 

Africa is a very unique context where significant non-technical components are critical to startup success. Personal relationships with your customers matter partly because it’s a relatively low-trust environment. Additionally, there's very little available data on consumer behaviour and trends here. Customer acquisition is a more high-touch endeavour, and retaining customers requires more constant engagement than you’d see in more developed markets.  To run an accelerator or incubator program which works, it really helps for you to have on-ground experience, in addition to that operational experience and a knack for systems thinking from an African perspective.

Agility is a close second. Entrepreneurs work in a very uncertain environment and with very limited resources to come up with innovations which solve some of the world’s biggest challenges. The best technology companies are able to experiment extensively, and to iterate towards full PMF (product market fit) or your “moonshot”. Accelerators and incubators provide the right conditions for this experimentation by lowering the overall cost of failure, helping founders to course-correct, and using the learnings from past failures to identify effective and repeatable venture building strategies. This greatly increases the overall chances of success.

What advice would you give to a Botswana startup trying to raise early-stage capital?

A deep understanding of your market is very important when you’re fundraising. Due to limited available data, this could mean  having to do market research  by going on the ground and really starting to understand the  environment you're operating in and the core needs of your target audience,

It's a  great signal to investors because it means you have a  more accurate conception of the revenue opportunities, which is what investors are interested in, to begin with. 

At a very early stage, investment opportunities are heavily indexed on the team behind the idea, and being able to demonstrate a rigorous assessment of your market is as important as your past experience.

Identifying your moat is definitely a determining factor in securing funding at a very early stage. Unfortunately, startups don't think about that enough. Your competitive analysis needs to be watertight because this helps identify your competitive advantage and impacts how you sustain that advantage.  If a business model isn’t highly defensible, you cannot sustainably run a high-growth, profitable venture.

Stakeholder relationship management is crucial and needs to have a long-term outlook. You should be building relationships with investors who show interest in your company, even if you don’t anticipate them participating in a current funding round. Keeping them updated on traction, key developments and milestones increases the chance of securing future funding and other support.

From a strategy perspective, have a clear path to all your critical milestones, like your Series A funding for example. These milestones matter, because you lower the likelihood of failure when you reach them, and demonstrate adequate thinking around how you’re going to outperform your competitors and gain enough traction to convince much larger institutional players to back you.

In an economic downturn like we are currently in, what would you advise startups to do in order to extend their runway and remain afloat?

It all comes down to thinking about how to foster innovation in a resource-constrained company, and how to learn quickly and apply these learnings to find product market fit. In my opinion, building a disruptive company needs to be thesis-driven. What is your read on the market today and how are you building solutions to problems which exist based on this explicit point of view?  When you are driven by a rigorously vetted thesis, you’re more likely to produce the sort of unit economics that keeps your startup alive

What trends do you foresee being prominent in the venture capital space in the next 12 to 36 months?

I think the funding slowdown will be protracted. We might see more later-stage funding activity growth than the early stage, as VCs reroute their capital into proven business models.

I do think there's also an opportunity for the VC ecosystem to think about how they can become ecosystem builders outside of deploying capital.  We  should hopefully see more VCs  commit to working  closely with founders to really build sustainable and profitable business models possibly through legitimate and structured VC platforms 

 Venture building is going to become more prominent. We've already seen the likes of Future Africa pivoting to a venture builder model, as well as new players like Fast Forward Ventures raising funds for the venture studio. Beyond cash returns, I’d love for the VC industry to be more intentional about adding value to the tech ecosystem.

Interview has been edited for clarity.

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