The document discusses Tanzania Angel Investors Network (TAIN), an angel investor network in Tanzania. TAIN aims to promote angel investing, support innovative startups, and provide investment opportunities for high-risk tolerant investors. It connects angel investors with early-stage companies, facilitates the investment process, and monitors portfolio investments. TAIN membership provides deal flow access, networking opportunities, and the ability to invest minimum $5,000 per deal to support Tanzanian entrepreneurship.

1. THE RISKS AND
REWARDS OF BECOMING
AN ANGEL INVESTOR
- A call to join TAIN
SALUM AWADH
FOUNDER

2. CONTENT
1. Who is an angel
investor
2. Global landscape
3. Continental
landscape
4. Characteristics of
an angel investor
5. Angel investor vs.
VC
6. Angel investing
risks
7. Potential rewards
8. Introducing TAIN
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3. Who is an angel investor?
o Is an individual who provides risky
capital for an early stage company
o In addition to capital, he/she also offers
mentorship and share of business
network to an investee
o We are extending the definition to
include institutional investors
o Can invest individually or in a group
with other angel investors/early stage
investors
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4. Does this investor have other options?
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Alternatives include;
o Real estate
o PRIVATE
EQUITY
o Crypto
o Art

5. Why investing in start-ups?
▣ Access to finance remains a key challenge to many early
stage start-ups in Tanzania
▣ Many fail to scale or die in a few years due to under-
capitalization, among other reasons
▣ Start-ups with the potential to generate up to 30x
returns, this provide massive investment opportunity for
angel investors
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6. How is the start-up funding landscape in Africa?
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The number of
funding deals more
than doubled in Africa
in 2017
458 deals closed in
2017 in Africa
30 startups raised
individual rounds
higher than $5 million
in 32 deals valued at
$626.9 million in 2017
African startups
raised a record
$725.6 million in 2017
in Africa
Key message:
Start-ups are
increasingly becoming
interesting asset to
investors

7. Funds raised by start-ups in Africa in 2019
▣ 42 start-ups
raised USD 1M+
each in 2019
▣ They raised a
total of US D
450m
▣ None from TZ
▣ 81% came from
SA, Kenya, and
Nigeria
▣ 33% in Fintech,
and 14% in
Transportation
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Source: Digest Africa

8. How long it takes to close a start-up
deal
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9. When does AI invest?
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• Valley of death refers to the
period of time spanning from when
a start-up firm receives an
initial capital contribution to
when it begins generating revenues.
During the death valley curve,
additional financing is usually
scarce, leaving the firm vulnerable
to cash flow requirements.
• The longer a startup burns through
its cash, the likelihood it may not
endure as a going concern. Breaking
out of the death valley curve can
be a turning point towards growing
beyond the startup phase

10. Activities funded by AI
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11. Global landscape
▣ The total size of the world’s early-stage investment market is expected to exceed $50bn by 2020.The $50 bn
mkt for angel investment promises a $150 bn exit in the next 5 to 7 yrs
▣ In Q4 2018, angel and seed-stage activity accounted for approximately 59 percent of all deal volume
▣ Total funding by AIs reached more USD 4BN in the quarter, growing by 44.9% (YoY change)
11Source: Crunchbase news

12. 12

13. African landscape
▣ Up to 2018, there was a total of 30
networks/similar organized initiatives across
Africa
▣ 38% of percent of members are women
▣ 52% have at least made one investment
▣ It takes an average of 12 months to start its
first investment
▣ It takes 3.8 months to close a deal (faster than
VC)
▣ Minimum deal is USD 25k, maximum is USD 100K, and
average investment per member is USD 5K
▣ Majority use equity instrument (97%), other
instruments include convertible note, and revenue
share
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Source: ABAN

14. Angel Networks in Africa
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Source: ABAN

15. WHAT DO THESE GROUPS DO IN AFRICA?
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Source: ABAN

16. Most active angel groups in Africa
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Source: ABAN

17. VCs vs. Angels
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18. KEY DIFFERENCES
VCs
oUse other people’s money
oHigher ticket sizes
oHigh growth stage
oShorter holding period before exit
oMore scrutiny
oMost of have backgrounds in finance,
investment, etc.
oInvest locally and internationally
ANGELS
▣Use own money
▣Lower but frequent investments
▣Early stage
▣Longer holding period
▣less scrutiny (relatively)
▣Majority are entrepreneurs
▣Most invest locally
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19. RISKS WITH ANGEL INVESTING
▣ Cant pull money out until
liquidation
▣ Cash can be tied up for years
before selling/exit
▣ High likelihood of failure (High
failure rate(
▣ Limited follow-on financing
▣ Market adoption risk
▣ Team risk
▣ Technology risk
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20. REWARDS
▣ Higher returns/higher multiples
when exiting
▣ Outperforming major stock
indexes
▣ Returns of between 20-25% per
year
▣ Outperforming returns on other
asset classes
▣ An opportunity to diversify your
portfolio
▣ Investing in businesses which you
wouldn't’t probably start yourself
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21. 21
BENCHMARKING
OUR STRATEGY

22. BUT,
▣ Not all investments you
make will give same
level of return
▣ Only 10% of the
investment will give exit
multiple of 10x to 30x
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23. PARTICIPATION
▣ In situations where
there was high
investor
participation,
returns are also
high
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24. 24

25. How do angel investors find deals? / DEAL FLOW
▣ Linking with the ecosystem (Hubs,
incubators, accelerators)
▣ introductions/referrals
▣ Online submissions
▣ Random emails
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26. INTRODUCING
TANZANIA ANGEL INVESTORS NETWORK
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27. www.tain.co.tz

28.  TAIN is the first organized angel
investors network in Tanzania that seeks
to promote angel investing culture and
support innovative start-ups in Tanzania
 The network acts as a vehicle to
generate deal opportunities, facilitates,
and manages investments
 The network operates in Tanzania only
and targets start-ups based and operates
in Tanzania.
 The network is managed by SSC Capital,
as a manager-managed network
About the
Network

29. TAIN was launched in May 2018 at
Hyatt Regency Hotel, Dar es Salaam

30. A session with DTBi start-ups A session with Ndoto Hub start-ups
A session with Smart LabSahara sparks
TAIN involvement in the ecosystem

31. A session at Seedspace A session with CBA Bank
A session at the LuanchpadOur media awareness campaign
TAIN involvement in the ecosystem

32.  TAIN is a manager-managed network by SSC Capital
which oversees the management of all investment
functions and administrative activities of the
Network
 Angel investors subscribe to the network as
members to provide funding and mentorship to
start-ups
 The Network operates as a loose structure,
managed as a platform and not as a holding
company for portfolio investments.
 The investors invest directly to portfolio
companies, either individually or as a group
 In scenarios where members want to invest as a
group, a separate holding company will be formed
where members will be the subscribers
Structure

33. 1. To promote the culture of angel
investing in Tanzania
2. To support innovation in Tanzania
through investing in, and mentoring
innovative start-ups
3. To provide investment opportunities in
start-ups for investors with above-the-
average risk appetite
4. To promote and strengthen the angel
investing ecosystem in Tanzania
5. To prepare potential deals for PE/VCs
through follow-on financing/exits of AIs
Objectives of
the network

34. WORKING IN PARTNERSHIP
PARTNER ROLE
Angel investors • Investing
• Mentoring & Coaching
• Networks
• Partly in due diligence
Manager (SSC Capital) • Deal sourcing & pipeline management
• Training
• Handles the entire investment process
• Manages all administrative activities
• Organizing live pitches
• Coordinating mentoring and coaching
• Handles all paperwork
• Organizing all meetings
• Recruitment of members
• Post-investment monitoring

35. CATEGORIES OF MEMBERSHIP
Category Description
Angel investors • Local successful entrepreneurs
• Local successful executives
• Tanzanians in Diaspora
• Local formal & informal investment
groups
Sponsor membership Law firms, audit firms, HR firms, etc.
Affiliate membership VC firms, PE firms, other angel networks,
Accelerators, Incubators

36. MEMBERSHIP BENEFITS

37.  An angel investor must have the capacity to
invest a minimum of USD 5,000 per
transaction per year
 An annual income of TZS 100m for an
individual, TZS 150m for a couple, and TZS
300m for a group,
 Must have demonstrated experience or
knowledge in investing or running a
successful business
 Must have time to attend meetings
 Must have time to mentor/coach the
investees
 Must have legal means of earning his/her
income
 Must be a Tanzanian/Tanzanian group
living/based within or outside the country
Who is eligible
to join?

38. • Quarterly monitoring reports
of portfolio companies
• Board meetings participation
• Ad-hoc visits
INVESTOR
RELATIONS

39. INVESTMENT PROCESS
The ratio is 50:1 or 2

40. Referrals from network
members
Sourcing from start-up hubs
Referrals from crowdfunding
platforms
Direct online submissions
through the network website
Referrals from Professional
service firmsDeal
sourcing

41.  All companies that go through the
screening will undergo coaching
 Coaching will help to fine tune the
business models, presentation
materials, and train on presentation
skills
 The short-listed applicants will then
have an opportunity to do live
pitches to the angel investors
 Angel investors will have an
opportunity to advise as well on
improving the dealsCoaching &
presentations

42. • Investment monitoring by the Network
Manager
• Taking board seat in the portfolio
company by the angel investor or their
representative
• Quarterly investment tracker report by
the Manager
• Mentorship (group and 1-1 facilitation,
use of online platforms)
• Each angel investor must allocate at
least one session with investee
companies for coaching
How are portfolio
investments
monitored

43.  The main exit target will be trade
sale to our affiliated VC firms
 Acquisition from strategic
investors
 Buy –back – The manager will
work closely with the portfolio
company in exploring this option
EXITS

44. OUR PARTNERS

45. Opportunity for co-investing/De-risking
DAR URBAN JOBS
PROGRAMME

46. TAIN will be the investor host of
2019 Angel Fair Africa in Tanzania10th to 11th October 2019

47. Join the network
Its simple, its online
www.tain.co.tz
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