Question H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term?

1. APRIL 17
Question H. What do you believe are the greatest challenges facing the
sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
IE Business School Essay
Candidate Moyosore Babalola
Program Global MBA

2. PageApril 2017 2
Table of Contents
Introduction
• Africa – the last frontier for venture capitalists…
• Nigeria – half a yellow sun…
Greatest Challenges Facing Venture Capital Sector in Nigeria
• Nigeria puts the “R” in “Risk Capital”…
• Cracking the tough nut…
My Role in the Medium Term
• The pieces to the puzzle…
• The challenges with deal sourcing…
• My potential solution to the challenges…
• Why I am qualified to implement the solution…
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?

3. PageApril 2017
GDP of USD481.1 billion
Nigeria
GDP of USD330.8 billion
South Africa
1
Introduction
Africa – the last frontier for venture capitalists…
3
Emerging opportunities in Africa are attracting interest from foreign investors looking to capitalize on the continent’s growth prospects. One
of the countries with significant investment opportunities is Nigeria
What makes Africa the new frontier
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
1
Average GDP
growth rate
above 5%
over the last
five years
2
Natural
resources
and large
undeveloped
land area
3
Population of
over 1.1 billion
people with
~40% under
the age of 17
4
Growing
middle class
with improved
disposable
income
5
Over USD30
billion inflow of
Foreign Direct
Investment 6
Improved
political
stability and
democratic
governance
7
Improved
communication
and transport
infrastructure
8
Improved
regulatory
environment
Africa’s Economic Power Houses
GDP of USD314.6 billion
Egypt
Note: Gross Domestic Product (GDP) figures are as at 2015. Source: World Bank
Data Bank

4. PageApril 2017
Average GDP
Growth Rate of 6% over
the last five years
GDP per capita of
US$10,093
Federal Government Debt
(% of GDP)
Interest rate spread
Population size of 160
million. 1 in 2 of which are
between the age
of 15 and 65 years
Life expectancy
52.8 years
Labour force
55.8 million people
Market capitalization
US$53.8
Billion
Over 100 million
units of equity securities
traded every day
Foreign reserves of
US$30
billion
Foreign Direct
Investment inflows
US$3.1 billion
CO2 Emissions
95,650 kt
Arable Land (% of land
area)
Internet Users
47.4 per 100
people
Electric power
consumption
141.9 kWh
per capita
Poverty gap at
$3.10
per day
1
Introduction
Nigeria – half a yellow sun…
4
Nigeria ranks high in key economic, financial, environmental and social indicators. However, poverty and infrastructural indicators show
significant areas for improvement
Nigeria
Indicator Ranking in
Africa
GDP size 1st
Population
Size
1st
Foreign Direct
Investment
6th
Ease of Doing
Business
37th
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
37.3%
10.4% 18.9% 29.3%
Deposit
rate
Spread Lending
Rate
10.5%
Source: World Bank, Central Bank of Nigeria
and Nigerian Stock Exchange
Source: World Bank
Legend
Economic
Indicators
Social
Indicators
Financial
Indicators
Environmental
indicators
Infrastructure
indicators
Poverty
indicators

5. PageApril 2017
Tedious Deal Sourcing
Process
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
5
• Although venture
capital firms receive
numerous unsolicited
requests for
investments, many
are not suitable to the
firm’s investment objective
• Venture capital firms in developed
markets utilize multiple mediums,
including social media, to find deals.
However in Nigeria, venture capital
firms rely heavily on their investment
team’s network to find suitable deals
Limited Funding from
Local Limited Partners
• More than 70% of limited partners
are American or European investors.
These investors invest either in US
Dollar or Euros and expect to receive
returns on investment in the same
currency
• Investing in Naira creates the
possibility of losing returns due to
changes in foreign exchange
INVESTMENT CRITERIA
investment criteria one
investment criteria two
investment criteria three
investment criteria four
x x
x
2
Greatest Challenges Facing Venture Capital Sector in Nigeria
Nigeria puts the “R” in ”Risk Capital”…
Portfolio Company
Private Equity Firm
Receives funds
in USD
Receives returns
in Naira
Makes returns to
limited partners
in USD
Invests in Naira
Weak Execution Capacity
of Portfolio Company
• Many management teams in portfolio
companies do not have the full skill
set required to successfully execute
and grow a business idea
• As a result, venture capital firms have
to nurture portfolio companies which
involves significant allocation of
professional resources
Limited Viable Exit
Options
• Typical exit options are a sale
through an Initial Public Offering, a
sale to private investors and a
management buy-out
• These options involve significant
costs or have a low probability of
leading to reasonable exit
valuation
Common risks involving venture capital Investment opportunities are magnified by the cost of doing business in Nigeria

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A number of solutions to the challenges are being implemented. These solutions can be improved to achieve greater results and resolve the
problems at hand
2
Greatest Challenges Facing Venture Capital Sector in Nigeria
Cracking the tough nut…
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
Make it Easier to Source Deals
by
Minimal information required for
venture capital firm’s investment
screening stage should be
provided
Encourage investment by local
institutional investors
by
Pensions Fund Administrators
(PFAs) may become active
investors if regulators could
insure investments to minimize
the PFAs’ risks
Engage individual investors
by
Existing structures such as
mutual funds or crowd funding,
can be modified and used to
create a vehicle for individuals to
invest in new ventures
Improve execution capacity
By
Non-core functions such as
accounting, finance and human
resources can be outsourced to
professionals to streamline
management team’s focus
Curating information
on investment
opportunities
Implementing
additional policies to
minimize risk
exposure
Creating investment
structures within
their reach
N
Outsourcing day-to-
day operating
functions

7. PageApril 2017
My Skills and Experience
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
7
3
My Role in the Medium Term
The pieces to the puzzle…
The Challenge I Plan to Overcome How I Plan to Solve it
My role in the medium term will involve providing a viable solution to the problem of efficient deal sourcing. My solution is in form of a
curation website – Argo, that is being developed. My ability to successfully implement the solution will involve applying my business skills
and experience.
Efficient Deal
Sourcing
Deploy Argo – a
curation site
Skill Set/
Qualifications
Strength
Investment
Banking
Consulting
Bsc Degree
MBA Degree

8. PageApril 2017H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
8
3
My Role in the Medium Term
The challenges with deal sourcing…
Tedious Deal Sourcing Process
What makes deal sourcing tedious is the amount of time and resources required to find suitable deals given the preset investment criteria,
the limited access to information on private companies, and the process of filtering through unsolicited opportunities
1. Challenge for small teams with a limited network
• The quality of deals venture capitalists find depends on their networking skills and
experience in the industry
• An established team with a wide network has a clear advantage over less a
established team
2. Limited information on opportunities
• Most venture capital opportunities are private. As a result, there is limited
information available for venture capitalists to assess the opportunity before
committing resources
3. Evaluation Process
• Filtering through a pool of opportunities requires a significant amount of time from
the investment team to narrow down to the deals that fit the pre-defined investment
criteria

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3
My Role in the Medium Term
My potential solution to the challenges…
My first contribution to solving the challenges of venture capitalist in Nigeria is to deploy Argo – a web-based deal sourcing platform. The
platform will help bridge the gap between investors and entrepreneurs
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
• The platform will have user generated content and logically predicted content
• The user generated content pages are currently being developed as shown below. Users will be investors (i.e. venture capital and private
equity investors) and entrepreneurs
• Subsequently, the logically predicted content page will be developed to identify emerging opportunities using data analytical tools

10. PageApril 2017
Profile
• Over six years full-time
investment banking and
corporate finance experience
in Nigeria
• Supervised teams of up to
ten (10) analysts and
associates
• Technical skill set includes
financial modelling,
valuations, M&A advisory,
debt and equity capital
raising and transaction
structuring
• Career objectives include
applying soft and technical
skills towards closing private
equity transactions,
successfully complete a
rigorous MBA program and
the CFA exam
• Background in Economics
with minors in Finance
Education and Experience
Leadership Competencies
Oral and Written
Communication
3
My Role in the Medium Term
Why I am qualified to implement the solution…
10
I have a strong background in corporate finance with over six years experience in investment banking, consulting and private equity.
Completing a rigourous MBA programme will provide the additional management skills that I need to implement the solution
H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you
hope to be able to play in this sector or industry in the medium term?
• Obtained a Bsc degree in
Economics
• Elective courses in Corporate
Finance, Financial Management
and International Finance
• Developed a financial model for
a Pension Fund Administrator
(PFA) and advised the parent
company on divesting its stake
in the PFA
• Coordinated the buyer’s due
diligence process on the
proposed merger between
Sterling Bank of Nigeria and
First Rand Bank of South Africa
• Completed the
CFA Level I Exam
• Led the establishment of a commercial
paper desk in CardinalStone Partners.
The desk issue over N800 million (USD5.3
million) in short-term debt loans to SMEs
• Advised Asset and Resource
Management Company on
its Euros7million acquisition
of Mixta Africa
2008
2011
2011
2011
2012
2015
• Successfully complete an
MBA program
• Complete an elective course
in Enterpreneurship and basic
software programming
2019
Business Competencies
Financial modelling
Business valuation
Due diligence
Deal Sourcing
Debt and Equity
financing
Deal Structuring
Personal Competencies
Problem
Solving
Result
Oriented
Decisive
Supervising
Others
Positive Mindset
Focused
Open-minded
Innovative
Insightful
Passionate Confident