29th May, 2017
Every entrepreneur who has ever made it either believed in themselves so much that others bought into their vision, or they believed in their vision so much that others bought into them. For some, both apply.
Kora Edibles, M-Kura and Ronin Creations are three businesses whose owners were able to convince a team of investors to buy into them. We spoke to the three entrepreneurs on how they got the funding they needed.
Kora Edibles is a gift shop company that specializes in artistically designed fruit hampers, some coated in chocolate. Coretta Kai, 26, came up with this idea after she realized it was difficult to get unique, healthy gifts for most occasions.
“At the time, I was working as an accountant and I was so unhappy. It was the same thing every day. I just didn’t feel fulfilled.”
Coretta started doing gift hampers as a hobby because she discovered it was something that gave her joy. But as more and more of her friends asked for the hampers and news started spreading, she realised she could start a business. Two years down the line, Coretta heard about the TV series KCB Lions’ Den and decided to apply so she could pitch for financing.
“I am an accountant, but believe it or not, the hardest part of preparing for the pitch was putting my books together. I had procrastinated too much; I had all the receipts and expenditure sheets, but I hadn’t compiled anything in months,” she says.
Coretta, however, was determined enough to sit down and get her books right. Another requirement was to come up with a three-year plan for the company. She managed just two years, but she did these in intricate detail.
“We were also asked to prepare a presentation. That part I found easy because creating a gift hamper is always such a joy. I believe they were impressed by what they saw. “
Coretta’s quest to win over the five investors in Lions’ Den wasn’t easy, despite her product being impressive. Not all investors were convinced her product was marketable to enough customers to make decent returns.
“The men dropped out quickly. It was just Olive Gachara left. I zeroed in. I knew she was a lifestyle consultant, personal trainer and coach. My product is very lifestyle based, so I used the angles that would interest her.”
Between her product, her well-kept books and her two-year projections, Coretta locked in an investment. She sold a 30 per cent stake in her company in exchange for Sh2 million.
“That was just the beginning. The next step was doing due diligence. Let me tell you, when someone is giving you their hard-earned cash, they don’t joke about it. You have to continually earn that right.”
Before the partnership could officially commence, a team of professionals looked over Coretta’s books, her vision and her projections to ensure what she presented was a true image of her company. Kora Edibles passed the test again.
Many changes have happened since the partnership began, says Coretta. For one, her business has moved from her house to an office off Thika Road. She also hired a few full-time staff.
“I think that’s when it hit me that I had a business. Real overheads, real staff members to pay. It was scary and exciting at the same time. I have never worked so hard in my life. It makes a huge difference, when you know this is sink or swim. There is no set income waiting for me at the end of the month. I have to make it happen.”
Kora Edibles has since increased its capacity from 10 gift hampers a day, to a record 200 gift hampers made on Valentine’s Day this year.
“The most beautiful thing about handmade hampers is that no two are the same. They make look similar but each one is unique. That’s what makes them sell.
“We deliver all our hampers. We do follow ups with all our clients after their events. It’s that personal touch, someone calling you to ask how your birthday went, or wedding or graduation. That’s what makes us stand out.”
Best advice: Know exactly what you want, exactly where you want to be. Your investors will back you up, but the dream will always be yours. If you’re unclear about it, all you will ever get is unclear results.
Turnover at pitch: Sh1 million.
Projected 2017 turnover: Sh13 million.
M-Kura. Many of us are familiar with mobile banking and mobile payment systems, but not many of us have ever thought of a day when we will be able to vote from the comfort of our homes using our mobile devices.
M-Kura, a coinage for mobile voting, is an idea conceptualized by Michael Nduati, a corporate branding businessman, after he spent hours queuing to cast his vote in 2008.
“I started asking myself what it would take to revolutionize how voting is done in Kenya. When I thought of mobile voting, of course it seemed far-fetched back then, even to me.”
Michael decided he had nothing to lose. He found an IT partner and started developing the software to make mobile voting possible.
“Many people doubt the viability of it. What I always ask them is, did they ever think their phone would be their bank? Everything is possible, you just have to want it badly enough and then work towards it.”
M-Kura aims to use a coding system similar to what mobile banking uses. This is the pitch that Michael took last year to Lions’ Den. He admits it was an uphill task because it’s something that had never been done before.
“I feel like we could have had a better presentation, because it’s such a complex notion that I don’t think we explained it as well as we could have.”
Further, M-Kura was still in the concept and actualization stage; the company did not yet exist.
“Many of the Lions dropped out very quickly. They said the idea was well before its time and since I couldn’t give them a track record, they weren’t willing to take the risk. Only Kris Senanu saw the potential. I think that’s because he is also an IT person. He got it.”
Though he secured funding, Michael ended up giving away 49 per cent of his company for an investment of Sh1.5 million. He says it was worth it because at least he is sure the concept will now come to fruition with an investment and mentorship partner on board.
Since the partnership began, the team has been reworking the software, as well as the original idea to start smaller by targeting individual organizations, such as Saccos and universities, before targeting a General Election.
“There are laws in Kenya which won’t allow us, right now, to use a mobile device as a tool for voting in a General Election. There are also perceptions and mind sets which we have to change before this is accepted as an avenue to vote.”
M-Kura’s is targeting to be a part of the elections in 2022. Its main focus will be diaspora voters. Michael’s ultimate dream is for M-Kura to be an Africa-wide system.
“I believe where there are less queues, there will be less frustration. And where there is less frustration, there will be less upheaval.”
Best advice: When you get someone who is willing to believe and invest in something you have created, walk with that person. It’s better to take a risk, than to shelve an idea because you were too afraid to share it.
Personal investment at pitch: Sh800,000
Ronin Creations. It was exactly 10 minutes to midnight on July 10 last year when Kevin Odhiambo hit the send button on his email. The comic strip artist had officially submitted his application to venture to Lions’ Den. It was a rather half-hearted application, but Kevin wanted to see if his fledging start-up, Ronin Creations, could find a partner and flourish.
The competition had been brought to his attention by a friend, but it was his wife’s nudging that gave him the courage to put in his application.
To his delight, he got a call the following day telling him he could come and put his idea to the test. His hopes rose and he knew that his days of struggling to sell his comic strips could well be coming to an end. Kevin had been creating comic strips since he was in primary school.
“I started when I was in Class 4. I’ve always been intrigued by cartoons since I was a kid,” Kevin says.
“Initially, I used to copy characters from other cartoons, but over time I developed my own style and started doing illustrations without reference.”
His characters are called The Culprits and are developed from some of the friends he had in high school.
When Kevin signed up for the Den, he knew who his target was: Myke Rabar. “I knew that if he came on board and I got access to the Homeboyz infrastructure I would make it.”
When the show got underway, it was indeed Myke who ended up investing in his company, buying a 50 per cent stake for Sh100,000.
Best advice: You need to be realistic with your pitch and work your figures right. It’s good to have some investors in mind and remember that it’s about opportunity and connections.
Article first run in the Standard Newspaper.
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