In the last few weeks, I have had a few enquiries from founders of what I’ll refer to as “advanced startups”. These startups appear to have validated their business models with significant users and revenues and often-times have quite a few staff as well. The founders reached out to me wanting to know how they can be part of 440 to benefit from some aspects of the 440 experience without having to go through the whole accelerator program including moving their staff and working full-time out of our co-working space for 3 months.
I have to admit that we may not have done a great job of communicating that we are open to these kind of startups. We ARE! For 1 or 2 advanced startups we will take a more flexible approach and waive the full-time co-working space requirement while still ensuring significant amount of engagement through attendance at majority of our events and an agreed schedule of one-on-ones between the founders and 440 directors. This flexibility should help the advanced startup founders get access to the extensive 440 network of mentors, VCs and prospective business partners which many of the founders have said is their biggest need. It also gives them an extra set of experienced advisors (both 440 directors and mentors) as they tackle scaling-related issues. We will still be investing a max of $110k for a negotiated minority equity position.
One benefit of being part of 440 which hasn’t come up so much in my discussions with advanced stage founders but which I think is very important has to do with valuation and raising money. Some of the founders are not particularly pressed to raise a $100k right away and plan to make a little bit more progress with their businesses then raise a large seed round of around $300k to $500k in 3 to 6 months time. However, from my experience this may be the most range to raise in Nigeria because hardly any VC will invest at that level. Getting in between $50k to $110k from 440, then accelerating the scaling process with our help may put the startups in a position to go for a $1m to $3m round in the same 3 to 6 months timeframe. There are more investors playing at that range and already having 440 as seed investors may also serve as an additional positive signal to VCs and other investors. Ultimately the biggest factor in the success of the startups is the founder’s drive and execution and being in 440 doesn’t change that but for the right team working on the right opportunity, 440 can help the advanced startup really take off.
Startups, early stage or advanced, apply now!
Applications close August 1st.