Three weeks ago, we publicly launched our co-investment platform – The Future Collective – many people have asked us for details about how it works. So we thought it would be a good idea to write a follow up article about it.
The Future Collective is our people-powered innovation fund that allows our carefully curated community of co-investors invest alongside us on a deal by deal basis through investment syndicates.
We built the Future Collective because we believe the traditional Venture Capital model which has remained largely unchanged for the last half-century is too broken to work for mission-driven African innovators.
Traditional Venture Capital, especially in Africa, typically comes from Limited Partner – foreign aid organizations and private equity funders who allocate capital to investment managers called venture capitalists. These investment managers have a track record in finance but have little experience building and supporting innovative ventures.
As operators ourselves, we have a lot of experience building and supporting successful ventures like Andela, Flutterwave, 54Gene, MAX and several others. However, despite many attempts to raise capital from these limited partners, there is a preference for finance managers who don’t really have a track record in helping innovators or high growth technology businesses become successful.
This is why we decided to build a product that allows you – the qualified investors who unlike your typical limited partner – may not have millions of dollars of other people’s money – to be able to invest in Africa’s best innovators.
Many of you work in the technology space and understand how technology and innovation have changed the world and can change our continent. Some of you are professionals in other fields who have seen technology success stories and hope not to miss investing in what could be the next Flutterwave or Andela early on. A few of you are investors from other parts of the world who simply want to keep tabs on the best innovation out of Africa. Regardless of why you are here, the one thing that binds us all is our love for Africa and our desire to see it rise from its challenges.
Your timing couldn’t be more perfect. In the face of a sinking Naira and underwater yields from treasury bills, you could make back multiples of your investment in USD on the back of a successful innovation that scales the way a number of businesses we have backed in the past have. You see, we started investing in 2015, right in the middle of Nigeria’s largest Naira devaluation till date. Over the last four years, we have invested $1.5 million dollars across 21 companies and a few funds. Over that time, we grew our portfolio 8x to $12.5m in assets under management, our startups are worth $1.2 billion of company value and raised $300 million in follow-on capital. Last year, they made $120 million in revenue while creating 12,000 jobs.
So how does the Future Africa Collective actually work? Well, every quarter, you get 5 deals. Each deal comes in an email from us with :
a brief on the company and why we believe it is an amazing investment,
a detailed pitch deck we co-create with the company
a data room which includes necessary corporate and financial data
most importantly, a link to the company’s Deal Syndicate page where you can invest a minimum of $5,000 with us.
Every member of the Future Africa Collective is required to pay annual membership dues of $1,000 a year. (You can also pay us $300/quarter). Should you choose to invest in any deal, you are charged an extra $8,000 per deal legal fee prorated by the amount of the round you decide to invest (for example, if you decide to invest $10,000 in a $100,000 round, your legal fee will be $800). Finally, when you invest you commit to paying us and our fund manager 20% of your profits from the investment returns whenever you exit.
Prospective investors looking to join the Future Africa Collective must apply to be Co-Investors. We admit a select number of co-investors four times a year. We offer conditional acceptance to a few shortlisted candidates pending payment of their annual membership dues. After membership dues are received, we will send you a welcome email with details on how to proceed. You can join the Future Africa Collective waitlist here
If you have any more questions, here’s a link to our FAQ page.