There is no such thing as a bad investment – Stewart Glynn of TEN13 discusses startup financing
There is no such thing as a bad investment – Stewart Glynn of TEN13 discusses startup financing
As the pace of innovation in Africa's technology ecosystem accelerates, more attention will be paid — and rightfully so — to the courageous founders and innovators forging Africa's future. Angel investors and venture capitalists, on the other hand, are a similarly courageous group of individuals who are rarely recognized.
Twice a month, we speak with an angel investor or venture capitalist who is a supporter of Africa's innovators in order to glean insights. I spoke with Stewart Glynn, a Partner at TEN13, an Australian venture capital firm, for this week's edition.
Glynn was raised in an entrepreneurial family in Harare, Zimbabwe's capital and most populous city. When the time came for university, he traveled to Australia to study business, banking, and finance at the Queensland University of Technology.
Following that, he held positions with General Electric and KPMG. He spent this time assisting businesses in developing sustainable structures and mergers and acquisitions.
During his tenure in the corporate sector, he was exposed to technology and its disruptive effects across multiple industries. Steve Baxter, the 'Shark' on Shark Tank and an Australian serial entrepreneur who founded SENet and Pipe Networks, which was acquired for approximately $400 million, approached him.
Baxter had begun investing in technology startups through his family's investment firm, Transition Level Investments, but desired to do more, and thus enlisted Glynn's assistance. They have invested in approximately 40 ventures worldwide.
Baxter and Glynn founded TEN13 in December 2019 after debating how to institutionalize their investments. They chose to do things differently after recognizing the value that Baxter could bring with his experience as a founder.
Rather than raising a seed fund, TEN13 leverages its network of over 200 entrepreneurs and corporate executives to provide more than just capital to the startups in which it invests. These investors provide the businesses with an extensive network and guidance as they embark on their entrepreneurial journeys. TEN13 invests on a deal-by-deal basis.
TEN13 has invested approximately $20 million in 13 startups over the last 18 months, including Australian edtech unicorn Go1; fintech startup ImaliPay; and Africa-focused fintech unicorn Chipper Cash.
According to Glynn, the goal is to support visionary founders early on and provide them with the resources necessary to scale their businesses. The average ticket price is between $250,000 and $1 million, with additional investment possible in the future.
On bad investments and common mistakes founders make
For the time being, Glynn says, the goal is to fund ten companies per year. A difficult task, as he claims they receive between 70 and 80 startup applications for funding each month. When I inquired about any deals they had missed out on that were particularly painful, he explained that this is the norm in venture capital.
“It's really about having a framework for decision-making in our game, because as early-stage investors, we're dealing with limited data. As an investor, you want to see a large number of companies in the anti-portfolio, as this indicates that you are seeing the right deals,” he explains.
An investor's anti-portfolio is comprised of deals they pursued but did not invest in, either on their own initiative or as a result of competition from other investors.
Nine out of ten startups, according to research, fail. With this in mind, I asked Glynn how TEN13 deals with investments that do not pan out.
“I believe there is no such thing as a bad investment. We recognize that, while the businesses we invest in have a high probability of success, startups fail for a variety of reasons. When we invest in startups, we provide assistance to the founders to ensure the startups' success,” he explains.
The majority of founders have grandiose plans to conquer the world early on, but without prior startup experience, they are prone to make mistakes. Glynn advises that this is the time for them to narrow their focus and avoid becoming too spread out — something they make certain these startups understand.
Rather than that, he advises them to pick one thing that will set them on the right track and focus exclusively on it for the next three to six months.
How to reach TEN13
He recommends reaching out to TEN13 via email [email protected] or LinkedIn for founders interested in bringing TEN13 on board as investors. He emphasizes that they are sector-neutral and invest in founders developing products for a global market. With a renewed focus on emerging markets, he recommends reaching out to founders in these markets who are creating remarkable products.
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