Takeaways from Technext’s panel on investor red flags founders should look out for

Dennis Da-ala Mirilla
Technext hosted a panel of industry leaders| Panelists said that founders should do their due diligence before seeking investors| Panelist said that founder should join networks of founders| Panelist said that founders should avoid being trapped.
panel on red flags founders should look out for in investors

Technext held a panel on Twitter Spaces Wednesday, with industry leaders on the red flags founders should look out for in investors.

Moderated by David Afolayan, co-founder of Technext, the panellists included:

Temitope Ekundayo
Head of Growth, GetEquity and CEO, Printivo

Fikayo Oyewunmi
Associate, Capital Markets and M&A, Banwo & Ighodalo

Maxime Bayen
Venture Builder, Catalyst Fund

Damilola Aderinto
Operating Partner, Future Africa

Not in any way mincing words, the panelists called on founders to do their due diligence when seeking out investors, and not be in a hurry to accept funding.

“For every partnership you sign, ensure you have the MoU properly signed…Get the necessary license if you are in a highly regulated space,” Temitope Ekundayo of GetEquity said during the session.

The panelists also laid emphasis on the need for founders seeking investment to join a network of founders, especially those who have received funding, to get a sense of what working with investors will look like.

Join a founder’s network as a founder! Be informed.

Damilola Aderinto, Future Africa

She also added that founders should not sign contracts they don’t fully understand.

“Don’t commit to what you do not understand…Don’t be trapped in what will affect you for life…If you don’t understand what an investor is saying, push it to another,” Damilola said.

Speaking from a legal standpoint, Fikayo Oyewunmi of Banwo & Ighodalo said that the responsibility of protecting the product rests on the shoulders of the founder.

As a founder, do your legal diligence…Protect your product, protect your intellectual properties before you pitch out to investors.

Fikayo Oyewunmi

The panelists also informed founders of the processes that raising funds will take, admonishing them to do the research and prepare the necessary documents before going after investors.

Maxime Bayen of Catalyst Fund said at the session that founders should only involve investors when there are indeed ready for the investment.

“If you don’t need the funding don’t waste your time speaking to investors or pitching, just focus on building your company,” he said, adding that founders should do well to start speaking to investors early.

“Investment process takes time. Start speaking to investors early. Also, don’t spend all your time fundraising,” he said.

Aderinto added that founders should be realistic about their fundraising expectations. “Start your fundraising efforts with realistic expectations. You should do due diligence. Know the people you are getting the money from. Talk to people, mentors, listen to people. Also, ask ‘what if this does not work?'” she said.

Stream the full session below.

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