For the reason that early 2020s, Nigeria’s tech trade has confronted a wave of expertise migration, which peaked after COVID-19. Whereas the development has raised legitimate issues about mind drain, it has created a brand new class of diasporan angel buyers backing Nigerian startups.
A number of angel networks have emerged from this shift, together with HoaQ, which caters particularly to diasporan buyers and founders. Whereas these syndicates proceed to develop in membership, capital deployed and affect, some angel buyers proceed to again startups independently.
Although these cheques are usually small by enterprise requirements, they play the important function of giving founders early runway to validate concepts earlier than syndicates, accelerators and early-stage VC companies step in.
One such angel investor is Uche Divine, a 26-year-old Manchester-based product designer who works in London. He relocated from Lagos in 2023 and commenced investing after his first yr overseas. Since then, he has backed two undisclosed startups as an angel investor via HoaQ.
Angel buyers are foundational to any tech ecosystem. They supply capital when institutional buyers won’t and infrequently provide hands-on help on the earliest phases. Drawing on six years of expertise as a product designer, Ibeafu additionally advises the founders he backs on product improvement.
For this week’s Ask an Investor, I spoke with Divine about his journey into angel investing as a supply of passive earnings and long-term retirement planning; his founder-led method, which prioritises belief and product viability over an outlined thesis; and the way his product background shapes his edge as an investor.
This interview has been edited for readability and size.
What number of startups have you ever invested in, over what time interval, and the way have they carried out to this point?
I’ve invested in two, and since I invested in each of them final yr, I can’t actually converse to efficiency but. They’re nonetheless within the constructing part.
I simply put the cash in and advised myself, “Okay, I’ve by no means achieved this earlier than. I would as nicely do it for my first time and see the way it works.” Each firms had been constructed by folks I belief. I do know these guys; I’ve seen them work, and I belief what they’re doing.
Why did you write the cheque—was it extra help, or extra that you simply believed within the startups?
Each. I’ve a few pals constructing issues—folks I belief—however I didn’t give them cash. This one was completely different. It was each: these are my folks, and what they’re constructing is sensible. It wasn’t a tough choice.
At what level did you progress from being a non-angel investor to being an angel investor?
I need a number of sources of earnings, and I wish to make investments. Investing is how I think about my “endgame”. I’ve spoken to pals, and plenty of of them wish to personal an organization or construct one thing massive. However for me, how I image calling it quits is having a critical portfolio—simply chilling on an island and residing off earnings from investments.
I already explored different components of the market: I purchase shares, I purchase crypto, and I’ve performed throughout completely different components of the monetary market. Angel investing was simply the one factor I hadn’t achieved. So it felt like the proper time to attempt it, particularly as a result of these founders had been doing one thing I used to be concerned about. It’s one thing I’ve all the time needed to do.
If you put money into startups, do you might have a thesis, or are you investing primarily based on what you imagine will probably be a great firm? And what made you imagine within the two you invested in?
As a result of I’m nonetheless a newbie—like a child angel investor—I don’t have a strong thesis but. I can’t even let you know the returns proper now as a result of there’s nothing to measure but.
I invested primarily primarily based on the folks constructing and what they had been constructing, and whether or not it made sense. Certainly one of them is an AI startup fixing a significant issue. I don’t wish to point out the identify, but it surely’s addressing a key drawback in its area. And the recommendation folks all the time give is: comply with the cash, comply with quantity. Many of the firms making probably the most cash proper now are AI firms. So, if there’s one which is sensible and what they’re doing appears prefer it’ll finally make cash, that’s sufficient for me.
To be honest, it was partly trend-driven. But when that is one thing I’m going to do extra of, I’ll positively develop a thesis. Proper now, it felt safer to put money into folks I trusted and in merchandise I felt would work. It was intuition. Over time, as I make investments extra, I’ll construct a clearer thesis. Expertise improves all the things.
Are you investing to generate venture-scale returns or to construct proximity and find out how startups work?
It’s a little bit of each. I’m investing for returns too, however proper now, I’m additionally attempting to grasp the way it works.
Watching the founders undergo this course of has taught me quite a bit. I would finally construct one thing myself and want to lift cash or undergo completely different rounds. So for me, it’s additionally a studying curve—tips on how to method fundraising, tips on how to attain out to VC companies—simply by being near folks constructing and elevating.
What unfair benefit do you assume you might have as an angel investor? What makes a founder wish to take your cash, figuring out they’re giving up fairness?
For me, it’s primarily my perception into how digital merchandise work.
Should you’ve invested in an organization, you’re a part of it. The way in which I inform folks: I personal Google shares, even when they’re diluted. If Google does something, I’m like, “That’s my firm,” as a result of I personal a bit of it.
With angel investing, you’re even nearer to the corporate.
For the 2 firms I invested in, each time there’s a brand new replace or function, they attain out: “Come and see this—what do you assume?” I take it extra severely as a result of my cash is in it. I’m not simply advising as a pal. I’m advising as a part-owner.
Bringing product design and product pondering is an actual benefit. If I make investments extra, I may even come on board extra formally as a product counsel particular person—“We wish to work on this; what do you assume?” That perception is what I convey past cash.
If I come to you and say, “Put money into my startup.” What would make you say no?
I get what you’re saying. There are a few causes.
First, I’ve to see the imaginative and prescient. Identical method with shares—if I don’t perceive what the corporate is doing, or it doesn’t align with me, that’s an issue. It’s intuition and readability. If it’s not one thing I can personally stand behind—one thing I can clarify, even “promote” as an thought—I’m not prone to make investments.
Then there’s the market. If it doesn’t appear to be it will probably turn into worthwhile, there’s no assure, however you should use information and primary projections to grasp whether or not the economics could make sense. If the projections don’t add up, that’s another excuse.
The most important issue is the folks constructing. You’ll be able to have a terrific thought with the flawed builders. If I don’t know a lot in regards to the founders, I’ll analysis. I’ll ask round. In our ecosystem, you hear tales—folks lose cash simply. I must belief the folks: what’s their repute, what do folks learn about them, and what do folks say? For me, it’s the folks first, then what they’re constructing.
Pragmatically, if the primary 5 investments don’t work out, do you cease angel investing, or is that this a long-term play it doesn’t matter what occurs early?
It’s a long-term play for me.
One other edge I in all probability have is that I’m not afraid of shedding cash at first. Whether or not this works or not, it’s one thing I do know I wish to do. So for me, it’s long-term. Whether or not it really works or it doesn’t, if I’ve cash, I’ll make investments. The one cause I wouldn’t is that if I don’t have cash.
Over time, as I make investments extra, I’ll develop a thesis round what works. I’ll additionally search counsel from individuals who have achieved this higher, simply to refine my decision-making. However I received’t cease as a result of the primary few didn’t work. That was by no means the deal.
I traded meme cash for a yr; this isn’t make-or-break. If it really works, nice—newbie’s luck. If it doesn’t, no drawback. I’ll nonetheless make investments.
In 5 years, what would make you say, “I did angel investing nicely,” or “I used to be a great angel investor”?
A working thesis and higher decision-making. No one can completely spot good and unhealthy performs, however there’s sample recognition in investing. You begin to recognise indicators since you’ve seen related conditions earlier than.
If my decision-making will get to a stage the place I can say, “The probabilities of this working are 70–80%,” that may be an indication of development. Returns would matter too, after all.
However primarily: extra confidence, extra precision, higher judgement, and having the ability to assess an organization extra clearly with expertise.
What do you assume is your greatest blind spot proper now as a brand new investor?
The most important blind spot is that you simply don’t actually know what’s occurring day after day. You place your cash in, however at that time, you possibly can solely hope.
You don’t understand how a lot work is going on day by day. Startup builders typically produce other commitments, and you may’t all the time measure their stage of dedication from the skin. You’ll be able to ask questions, and you may examine in, however you’re not of their Slack teams; you’re not of their inside day-to-day. You principally should take what they let you know.
The businesses I invested in are nonetheless constructing. You’ll be able to’t inform precisely when one thing will probably be prepared. If they are saying Monday, Monday can go, and there’s all the time a cause. That uncertainty—timelines, progress, what’s actually occurring behind the scenes—that’s the blind spot.
I don’t assume it’s a nasty factor; it’s simply a part of what it means to take a position at this stage.
Elevate your perspective with NextTech Information, the place innovation meets perception.
Uncover the most recent breakthroughs, get unique updates, and join with a worldwide community of future-focused thinkers.
Unlock tomorrow’s tendencies as we speak: learn extra, subscribe to our publication, and turn into a part of the NextTech neighborhood at NextTech-news.com
