Investor Iyinoluwa Aboyeji Just Shared These 5 Key Pieces of Advice For Founders

In a recent LinkedIn post, Iyinoluwa Aboyeji, co-founder of Andela and Future Africa, shared his vision for African founders and the future of tech startups in Nigeria. Drawing from his experience as an investor and entrepreneur, Aboyeji outlined five critical points that founders should consider as they navigate the challenges of building and financing their businesses. His advice, rooted in practical milestones and long-term strategy, offers a roadmap for founders looking to create sustainable, scalable businesses.

1. Focus on Reaching $1M in Revenue Before Seeking Major Funding

Aboyeji emphasizes that founders should prioritize generating $1 million in revenue before seeking significant venture capital (VC) investments. He argues that funding options are limited for companies below this revenue threshold, and founders should focus on building a solid business model first. Raising large sums of money prematurely can lead to unsustainable growth expectations. Instead, founders should bootstrap and seek early-stage funding from VCs like Future Africa, who can help them reach that critical milestone.

2. Reassess the Necessity of a Series A After Hitting $1M

Once a startup reaches $1 million in revenue, the dynamics of raising capital change. Aboyeji advises founders to think carefully about whether they need to raise a Series A round and from whom. Many VCs have high return expectations that may not align with the economics of the business post-$1 million in revenue. Raising capital from a fund that can’t support the company through to a global IPO can put founders in a difficult position later.

3. Embrace High-Margin, Profitable Business Models

One of Aboyeji's most critical points is encouraging founders to build high-margin, profitable businesses that prioritize sustainable growth. Rather than chasing rapid expansion at all costs, founders should focus on creating businesses that generate solid profits, which can fuel organic growth and reduce dependency on external funding. A business that can sustain itself is in a better position to negotiate favorable terms with investors and scale at its own pace.

4. Consider Listing Locally on the Nigerian Exchange Group (NGX)

Aboyeji suggests that African tech founders should consider listing their businesses locally on the Nigerian Exchange Group (NGX). He believes that local IPOs provide a viable alternative for scaling businesses while ensuring financial transparency and good corporate governance. By building a strong local presence, founders position themselves for future global listings when the business reaches the right scale. This strategy allows founders to grow organically without over-reliance on foreign investors.

5. Think Long-Term About Corporate Governance and Transparency

Aboyeji underscores the importance of financial transparency and corporate governance as crucial elements for founders building businesses meant to last. Implementing these practices early on helps establish trust with stakeholders and sets the foundation for sustainable, long-term growth. This emphasis on governance is also key for founders looking to list their companies on stock exchanges, as it ensures they meet regulatory and investor expectations.

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