We are trying to be as efficient as possible to make the process hassle-free for founders. We didn’t choose our deal terms by guessing and I’ll try to explain how we decided on what to offer.
$15k @ N365 is N5,475,000 - if the founders living costs come to N150k per founder per month that’s a total of N450,000 if it’s a team of 3 (average team size is about 2.7). Assuming they spend another 200k on other expenses per month that comes to about 8+ months of runway. We believe a capital efficient team can make this amount last a lot longer than say $120k if you were a silicon valley based startup.
At the stage we invest, we expect a high percentage of startups to die and we also expect more dilution than investors in the US. Think Sam Altman of YC said that they don’t get diluted by more than 50% even at post $1Bn valuation. If the dilution factor for a startup in the US was 100 base points in Africa it will be 250 base points at least until Series A.
However we are open to being flexible e.g. $7.5k for 3.75% — we are stubborn about our vision but flexible on our strategy to fund the best founders.