Tomie Balogun did not start out with the goal to provide highly sought-after financial insights for over 60,000 Millenials by the year 2021. But, when she realized that she had a challenge with increasing her wealth even after working a number of corporate jobs, she decided to do something about it.
Currently, her fintech startup, The Green Investment Club, is on the verge of committing a 6-figure fund in dollars into a venture capital (VC) vehicle to be invested into African startups. TGIC has invested over $14 million into small and medium businesses and created more than 2,000 jobs. Tomie is also the founder of The Vestract Company; a financial education and investment opportunity platform.
Of course, all that money is not from one person alone. It is from hundreds of Nigerian millennials who otherwise wouldn’t be able to form part of the investment capital base for a VC.
Hardly does a week go by without news of an African startup receiving funding. However, the knowledge of how to sort through the risks associated with investing as well as the process of investing is not as commonplace in Africa as in other parts of the world.
Nigeria women make up 70% of the TGIC. This probably shows that women make up a larger percentage of the population in need of knowledge about investing, especially in African startups. It could also mean that more women are more welcoming of the company.
“One of the major reasons why TGIC has more women than men is because I, as the founder, am a fellow woman who has found a way to solve the challenge with tech,” Tomie said.
Like in other tech sub-sectors, women find it easier to engage with tech products, clubs and ideas as well as develop some of their own when there are other women that are doing well in the field.
Unless people know when a startup is raising funds, they cannot consider putting their money in it. Not having access to information is a big obstacle that prevents people from taking advantage of credible investment ventures.
When she started TGIC, she looked forward to when young people would be able to invest in VCs and opportunities that could put them on the path to financial independence. However, the extent to which people can invest is also limited to the available amount of money. To invest as a Limited Partner in most VCs, the ticket can be as high as $100,000 or more depending on the firm itself.
A way to solve this is by using the combined investment power of many people, Tomie said. By contributing $2,000 each, 20 people can form one limited partner and invest in critically-assessed startups through a VC vehicle. An increasing percentage of women are finding ways to be a part of VCs by following this route.
Too young to invest in stocks?
Until recently, it was not easy to invest in stocks, bonds and many of the other ventures available in the business space in Nigeria. Flashback to 7 years ago in 2014, Tomie said she was turned down by banks who told her that she was too young to be investing in the stock market.
After finding ways to invest, the many processes to be completed before dividends can be received also discourage many from going this route. Instead, shady investment prospects like the recently-crashed MBAforex with lesser barriers to entry and greater returns become the choice alternatives for people.
She read books, researched investment apps and found ways to invest money. Her blogs on the topic brought comments from people who wanted the knowledge and she built the TGIC community around that need.
Tomie’s first investment in a startup was in a business that had a model similar to Uber’s. Uber had not yet expanded into Nigeria as at then, and together with some friends, she put money into the startup.
The way the business worked was that people who needed a ride to and from work would subscribe to the startup at a price. A designated driver will take the person to work in the morning and go back to give him a ride home.
With the investment, the startup bought more cars and business picked up but Tomie and her friends got burned. She said, “I learnt a very vital lesson back then. The integrity of the person whose business you are investing in matters a lot.”
One of the most recurrent answers that African entrepreneur give to the question, “what are your top 3 challenges in business?” is raising funds. This is even more so for women-led startups compared to their male-led counterparts so, clearly, more Africans need to believe and invest in African businesses.
However, investing in the right startup requires a depth of intelligence and a volume of money that may not be available at the start. Tomie’s journey from being broke to being able to rightly invest tells that it is possible to achieve both.
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