Olive Gachara, 30, is the publisher of Couture Africa and an image consultant. She was one of the investors in the first season of KCB Lions’ Den show, which is a franchise of the international reality television series, Dragons’ Den. On the show, entrepreneurs pitch business ideas to secure financing from a panel of investors. The investors put up their own funds.
In the first season of the show, the five ‘Lions’ on the panel committed a total of Sh153.3 million to 30 contestants after listening to 72 pitches.
We caught up with Olive for some behind-the-scenes insight into the show.
What do you look for as an investor when an idea is presented to you?
Knowledge of the subject matter – the product or service – and the industry as a whole, realistic projections, business goals, as well as the entrepreneur’s personal drive and character.
Which presentations did you find the most captivating when you were in the Den?
Businesses where we were able to touch and feel the products were definitely more interesting than those that simply came across as concepts.
What was the hardest part of being a Lion?
Telling someone that you are not interested and will not be investing in their business was definitely difficult for me – even if it did not look like it. It is unfortunate that we have to let some people down as we seek out the best businesses to invest in, and it’s my hope that we did not kill anyone’s dreams.
It is said that we judge a person within 30 seconds of meeting them. How much does an entrepreneur’s appearance matter?
Well, as an image consultant, I would say that it matters to me a lot. Possibly more than it should. It is my take that your presentation shows your level of organisation and self-respect. Regardless of your industry or code of dress, there is a level of grooming and care that should be maintained for you to be taken that much more seriously.
What is the best way to raise capital as a start-up?
It would be best advised for a start-up to work with savings or funds from family to kick off and prove their concept. Once this has been done, they can seek out angel investors and angel funds to invest in their ideas. However, if you do not need capital, do not raise capital. I would recommend organic growth any day. It will then be much easier to get funds for growth and expansion of your already thriving business.
We saw a jet engine and an app created to save lives come into the Den. Did you feel inspired by the ventures presented to you?
Yes, definitely. I think Kenya is a hotbed of creative ideas, and the more entrepreneurship flourishes, the more innovation we shall see. This is not necessarily because our generation is more creative than generations past, but because in the here and now, we are seeing successful young entrepreneurs who have built successful businesses through coming up with unique ideas and monetising them. This has. in turn. opened up people’s minds to the possibilities that exist.
In season 1, many entrepreneurs failed to make deals in the Den because of poor valuation. What is the best way to determine a company’s worth?
There are very technical methods of valuing a company. Most people will value a business based on future projections, which is not wrong per-se …. You, however, need to peg this future growth on existing growth, meaning that the business has to have existed for at least two years. It is, therefore, very difficult to value a start-up or an idea. The value of a start-up is directly equivalent to the funds required to start. Raising funds for a start-up automatically means that you would have to give up more equity.
Many business concepts never make it to execution. What do think brings about this problem?
Procrastination on the side of the entrepreneur. Lack of confidence in the idea and playing the ‘when-then’ game – when I get capital, then I will start my business; or when I understand the market 100 per cent, then I will bring in the product.
The phrase ‘Kenya uniform’ speaks to how much we copy one another. Do think this hinders new business ideas from flourishing?
Not at all. Competition is the fuel that drives innovation. The more the businesses that get into your space, the better you have to become to stand out. In any case, there is almost nothing new under the sun.
In your experience, what creates good chemistry between an entrepreneur and an investor?
Mutual respect, trust and understanding. As an investor, I need to respect an entrepreneur’s decisions and trust that they can make the right ones. The entrepreneur needs to respect the investor’s opinions and trust that everything is being done for the overall good of the business. The investor and entrepreneur need to understand each other and each other’s process. This is especially so in angel investing, because there is a very close relationship between the investor and the entrepreneur.
Unemployment among the youth of our country is a major issue. What do you think of young people’s efforts to change the employment landscape themselves?
I definitely think it’s commendable that today’s youth are not looking to the Government to solve its problems. It is because of this drive that we see other players jumping in to offer support, and it is this drive that will grow the economy.