From Entrepreneurs to Angel Investors
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From entrepreneurs to angel investors
This article is a summary of the Case Study. For the full Case Study, click here.
The African Angel Academy has developed a series of case studies to share the stories of African early-stage individual investors. These case studies aim to inspire and guide new angel investors across the continent. This case study was made possible by the generous support of the Southern African Innovation Support (SAIS) Fund.
From Entrepreneurs to Angel Investors recounts the journey of the South African digital marketplace startup SweepSouth with their first investors to illustrate the importance of entrepreneur-minded angel investors. SweepSouth effectively formalises the domestic services industry and enhances efficiency and working conditions for workers by creating a platform that links domestic workers with customers for gig-based cleaning services.
Co-founders Aisha Pandor and Alen Ribic formed the company in 2014 based on their own challenges with sourcing reliable, flexible cleaning services in Johannesburg. Angel investors Llew Claasen and Vinny Lingham formed the venture capital (VC) firm Newtown Partners in 2014 to apply their entrepreneurial experience, and capital, to support other entrepreneurs. Told through the voices of Llew and Aisha, the case study explores the critical role angel investors play in preparing startups for growth, not just as funders, but as partners.
“Entrepreneurs need a partner, not just a financier,” Llew explained. “It’s not just about ‘Are you going to write a check for me?’ It’s about ‘Are you going to have my back when things don’t go according to plan?’”
After Llew and Vinny partner to make a small equity deal as a pre-seed investment in SweepSouth, the case documents the experiences of investor and founder as they navigate due diligence, term sheets, deal structuring, partnership, and exit together. Their story is one of mutuality, with investor and entrepreneur sharing goals, individual sensibilities, and ways of working.
Motivated by his own past struggle as a young entrepreneur with less supportive investors, Llew endeavours to teach Aisha and Alen as much as possible about fundraising strategy and put their best interests first. He is also extremely methodical in his approach to decision-making and planning. Meanwhile, Aisha and Alen are driven founders who are hungry to learn as much as they can from their mentors and implement as quickly as possible. As scientists by training and profession, they are similarly scientific in their approach to decision making, which creates a strong foundation for their partnership with Llew and Vinny.
The experience of working closely and openly with their angel investors proves catalytic for SweepSouth’s founders as they grow the business, diversifying their service offering and expanding into other African countries. After Llew and Vinny’s exit in 2019, marking a major developmental transition for the SweepSouth, Aisha is inspired to become an investor herself. Joining the Entrepreneurs 4 Entrepreneurs Africa team, she endeavours to use her experience to nurture the next generation of tech founders in the same way Llew and Vinny nurtured SweepSouth.
“I know now that having the right early-stage angel investors can make or break a business,” Aisha reflected.
The case leaves readers to consider how angel investors with entrepreneurial experience are uniquely positioned to nurture founders, and the various forms of practical support that angel investors can provide to complement the founders’ knowledge, skills and resources.