Category: Founder Education

Pade’s story is one of purpose and innovation. Founded by Seye Bandele, Pade emerged from a desire to address a critical need: improving communication and productivity within organizations, particularly for those who often go unheard.

This vision extends beyond individual companies. Seye sees Pade as a catalyst for Africa’s growth. By empowering employees and streamlining HR processes, Pade aims to unlock Africa’s full potential and establish it as a global leader in productivity.

What inspired you to start Pade?

My name is Seye Bandele, co-founder and CEO at Pade. 

The story of Pade began in 2011 when I met my co-founder. At that time, we were working on government projects, developing software and information systems in Abuja. In each of these companies, I was fortunate enough to quickly rise to a position of importance. However, I noticed that others who didn’t have similar opportunities often felt lost within the organisation. There was a lack of communication from employees to management, though management frequently communicated with employees.

After some time, I left Abuja, relocated to Lagos, and started working in tech. I joined companies like DealDey, V-Connect, YesMobile, Yudala, and Konga.

I worked across all of these organisations for about six years, I was like, okay, this is something that needs to be fixed. I also initially wanted to build employee engagement software. So, I tried to build a product that could help employees become more heard and seen within the organisation, regardless of what they were doing, even if they were working in cleaning, warehousing, or whatever.

 So that was what led me to build. We studied the market again and found out that the people doing HR software at the time were focusing on the larger end of the market, really straight-jacket software like SAP and Oracle. We wanted to build something simpler for smaller or medium-sized businesses that employ about 84% of the labour force. That was the motivation and the justification for building Pade.

What’s the biggest hurdle you’ve overcome as a founder?

As a founder or an entrepreneur, your job is to sell. Now, think of selling more than just selling to customers. First, I had to sell the vision to my co-founder. Who says, “Oh, okay, this makes sense. Let’s do it”. 

Then I had to sell to my first few customers, like, “Hey guys, we’re building something, We’re not the best in the world. Some people in the world have done it better than we have, but here is a tiny bit of advantage that we think if we solve it, we’ll solve your problems better”

Now it gets to the point where you have to sell to an employee. Employees take their work seriously because their work is their life, right? So, you need to sell to an employee to say, “hey, if you join me on this journey to achieving X, you’ll be able to tick off certain things you wanted to accomplish in your life journey” So, you have to sell that vision again to that employee.

Then you have to sell to more customers, and also to investors, which is the hardest part, like, “Okay, yeah, you have this great thing going on, but why should I back you?” You realise what you are doing most of your life is just selling something as an entrepreneur. You’re selling a product, a vision, an idea, and a future to all the people who are going to contribute in some way, shape or form to the future that you’re trying to create.

That is the most difficult thing, right? If you try to crystallize it into, okay, what exactly is my problem? People say things like funding and market and all that stuff, I will say the real problem is find a way to sell your vision, no matter how small the market is. There are businesses in Liechtenstein or Luxembourg with a population of 600,000 people compared to our own 200 that are profitable and successful.

So you need to find a way to sell your vision so that it becomes profitable to you, the guy who has chosen to embark on that mission. 

How do you stay motivated and focused on your long-term vision?

The moral cause behind the business we built was that Lekan, my co-founder, and I wanted to contribute our quota to helping Africa become more productive. Despite being the largest opportunity for growth on the continent, Africa suffers from the worst productivity. Everything that can be wrong with the continent is wrong with Africa.

I realised this is actually a problem we can solve. We have the best people. We have strong and intelligent young people. Other civilisations are ageing. Japan, Canada, and Europe, which is why all these folks are doing immigration programs to get the best talent out of Africa to come and embed them into their societies. That has to stop. We have to be able to fix our society so I will become more productive and one of the world’s leading lights. To be honest, that’s the moral cause behind building Pade and any other company I will build.

What’s the most valuable advice you’ve received as a startup founder?

I barely listen to anybody’s advice because I’m just strong-headed and believe in myself only. But the best advice I’ve gotten is to “Don’t play the valuation game, You have to build a value-based business”

What we should have used to calibrate a company’s success is how many lives you are touching, how much value you are contributing to the ecosystem or society, and things like that. I’m not really focusing on building a $100 million, $500 million, or $1 billion company today. What I’m focusing on, what I’m interested in, is how many lives your company was able to touch and positively impact.

How many people? Is it 100,000 people? Is it a million people? Is it 500 million people? How many people were you able to impact? Towards that, the moral course is that I want to help Africa become a more productive continent.

Where do you see Pade in the next few years?

Where I see Pade, and unfortunately, that’s a harrowing question. It is painful because amid all these noble things, I’ve said, delivering Africa to productivity, taking our stand amongst the greats of this world as the most productive continent. Unfortunately for us, capitalism requires that you build a profitable company. I’m not Bill and Melinda Gates. I’m not the US government, so we have to build a company that is profitable while solving problems and creating value. So, in the next five years, Pade will be easily described as a corporate bank for employees – a product, software, or environment where you earn your salaries via our platform, and you can access financial solutions that improve your life. So on the HR side, we’re going to build software that makes work simple, removes the complexity or complicated parts of work, and then deliver to employees, both administrators and just regular employees, financial solutions that make their lives better so that they can focus on work and become better at what they do.

We will attempt to positively impact the lives of Africans wherever they are, whether you’re in Asia, Europe, North America, Canada, Alaska, South America, Nigeria, or  Africa. That’s our dream. Via where they work, how they work, where they get paid, how they get paid, which is where the name came from. We will connect them to solutions that improve their lives inside our community, environment, or software.

Why did you choose GetEquity as your platform for raising capital?

Without GetEquity, I don’t think we would have been able to get to where we are today. At that time, about two and a half years ago, I needed guidance on who to go to and where to go. I knew I could build quality software or a quality business. Still, just like you can build a generator, Honda, Mantrac, JMG, or Electromag, they can build a fantastic generator that will power an entire building. But if you do not put fuel in it, your generator is useless, right? We had built a beautiful generator that would help solve a particular problem, but we needed some fuel. GetEquity gave us the perfect opportunity to access the fuel we needed.

I mean, I’d spoken to individuals, I was very green in the game. I needed to learn how to go and talk to somebody to give me money to build my business, to help me achieve my goals, it was very innovative. There was nothing else like it at the time. So, it was just perfect. I need to show screenshots of chats with my co-founder and me using GetEquity. Yeah. He did not believe it. Why? Like, “ah! who’s going to give you money? I said “make we just try them now, make we see”

And then we listed, and by the evening of the day that we listed, we had raised $200. I was like, what? The next day, we had reached $500, and within three weeks, we had raised $20,000. I’m grateful that opportunity came because that $20,000 alone propelled us to achieve our immediate milestones, allowing us to get to the point that we are today. 

What advice would you give to other startup founders considering raising capital on GetEquity? 

I recommend it to other entrepreneurs who can take advantage of the services available to build their dreams.

To find out more about Pade and how their HR solutions can transform your organization, visit their website at www.padehcm.com

Have you ever considered raising capital outside grants and equity financing? Are you a startup founder looking to raise funds without the need to give out shares in your company? Well, you should consider raising capital through the venture debt mechanism. 

Venture debt is a term used to describe a transaction in which a startup borrows money with the promise to pay back with interest on an agreed date. Despite the equity retention benefits venture debts give startup founders, it is yet to be popularized in the African venture capital ecosystem. But why is this the case?

In this article, we will talk about the key benefits of venture debts.

Ready to learn? Let’s get started.

Top 5 Reasons Why You Adopt Debt Financing

• Helps minimize dilution: Venture debts affords founders the opportunity to get more cash injected into their businesses without the need to give out much equity to investors. Hence, you can have raised through equity and debt financing at the same time, thereby giving out equity and preserving the rest. A good example of this is how Tradedepot raised $110 million with 38% being equity financing and 62% being debt financing.
• Avoid Bad Equity Investor Behaviour: There are many stories of investors meddling in the affairs of a startup, calling startup founders to meetings regularly amongst other toxic behaviors, thus not giving founders the chance to implement the ideas they have for their startups. With debt financing, you can oversee day-to-day management of the business with funds obtained with an agreement to pay at a later time.
• Extension of cash runway: Equity financing rounds are often associated with setting milestones a startup must meet before another round of financing can be commenced. More often than not, startups find it difficult to meet up with these milestones due to various factors. This does not apply in debt financing as Venture debts give startups more time to achieve their target milestones due to the lengthy duration of the payback period.
• Expansion and capital projects: Venture debts are a good startup investment option for companies looking to expand and acquire expensive operating assets for their operations. For instance, Moove, a Nigerian-based mobility fintech startup raised $10m in venture debts in the first quarter of 2022. The company currently serves as Uber’s sole vehicle supply and financing partner in Africa and this explains one of the reasons why it would need a distinct capital raising process like venture debts to help the company “empower more mobility entrepreneurs in Africa.” 
• Interest payments are tax deductible: In African countries such as Nigeria, tax considerations are given to debt financing to make it more attractive for foreign investors. Hence, the interest paid on venture debts are not subject to Withholding tax for both the investor and the company.

Conclusion 

In summary, the idea of companies borrowing capital to finance their business activities is not a novel thing in the world of finance. M-Kopa, Babban Gona, Twiga Foods, Daystar Power, Pay later, Rensource Energy are common examples of venture debt backed companies in Africa.

Unless you are Brian Chesky in 2009 trying to get Airbnb up and running while being a design graduate, you have by now heard about angel investing and how angels are an important entity in the startup industry in every growing emerging market.

But who exactly are Angel investors?

Well, basically angel investors get involved in a company at the very early times, usually during the initial round of funding of founders themselves, family, and friends, or when a company decides to take the very first check.

They provide startups with small amounts to roll out their products which is, most of the time, between $1000 to $1,000,000 depending on the industry, and structure of the business, model and capital the founder needs at that stage.

The main reason why angels are important in the startup field is because they usually come in at the stage where startups need it the most, “the early days”. They invest right at the initial funding and also before the company is yet to take shape for venture capital funds to be interested, hence the name “angels.”

Who are angels and how do they work, you may ask?

Angel investors often have a strong background in the business world but can also be:

• Venture capitalists who write small checks on the side as part of alternative investment strategies.
• C-level executives at successful high-growth companies and are looking to support other founders or C-level executives.
• Professionals with passion and understanding in what it takes to run a successful startup and want to impact on newer generations.
• Syndicates(groups of individual investors) that pool small amounts from each person to fund one deal decided by all of them.
• Small business owners and entrepreneurs who already run successful companies and know how to spot other successes in the making.

Since angel investments come in at a critical stage of the startups, rigorous due diligence happens but it is relatively shorter than the later stages since the companies are yet to have deepened operations and big numbers to crunch.

• Angel investors connect with young, growing companies through networking events, seminars, conventions, referrals from fellow investment organizations, and word of mouth, website portal or business.
• When an angel investor and the founder of a company are interested in each other, the angel investor runs a due diligence procedure by talking to the founders, assessing the company’s products and business endeavors, and gauging the company’s industry, market size, business model and founder themselves.
• A term sheet is then created by the angel investor when both parties reach a verbal agreement with investment terms, equity percentiles, investor rights and obligations, and exit strategies.
• After the contract is finalized, the deal is officially closed and the funds are released for the company to use.

What your startup may gain from angel investment

• The angel investor is mostly a fellow entrepreneur, but more experienced which means you will be trusted by someone who understands what you are going through and would provide you with actionable, realistic pieces of advice to grow your company.
• There is more cash down the path. Angels only invest in companies they have great belief in future fruition and are in for the long haul. “… they often make another cash injection later on,” says Garett Polanco, an accredited angel investor who’s funded 29 companies.
• There are no obligations if your angel investor invests in exchange with equity, most of which do. You do not have to pay back the angel investor when the business does not work.

How angel investment might damage (or kill) your startup

• It may get too costly because in many cases, angel investors ask for a huge chunk of your startup in return for their funding. “That typically comes in the form of equity, which could be more expensive than debt financing,” Lavinsky says.
• You will remain with less control over your startup. Since the angel investor is more likely to ask you to give up some equity in your company in exchange for their funding. That lump sum of equity might seem to be small but some angel investors might later decide they want a bigger role in business decisions.
• There is a high chance you might go with novice angels. Due to the desperation and novelty of some first time founders, some startups end up taking offers from new angel investors with no strong experience in the industry or startup environment at large.

Be careful, do enough research, and focus on growing your business.

Many angels join at an early stage when the companies need every support they can get which is why they like to play an active role in the startups they fund. This is the reason for finding an angel investor who is both close geographically and skilled in the industry your business is in.

Also, there are also crowdfunding platforms that are on the rise where high-growth startups raise funds from communities of dedicated individual investors who take the big risks trusting the founding team to grow the businesses to fruition. This option could save your startup months that it would usually spend fundraising, give you broader connections amongst the founding community and more investors, and a marketing effect during the funding process.

Every high-growth startup needs funding somewhere along the way on their journey to deliver value on the market at scale. Now, it is a wrong concept for most inexperienced or first time founders to think that their companies need venture capital to start rolling out products whereas companies instead need venture capital to scale the product and the innovation they already have traction for.

When your startup is ready to receive venture capital, investors need to see certain information and data to assure them of a good deal. The number one reason startups fail is the inability to raise funds. Matter of fact, 38% of failed startups did so because they ran out of cash or failed to raise capital. So below, are the main things venture capitalists want to see so they can give you their money and also so your startup does not die.

Is your solution needed on the market?

Almost all startups any VC will invest in have to have a product, either a service or a tangible good that they are selling on the market for a profit. Sounds good so far? Now, for your product to be successful, it has to be addressing a certain meaningful pain point on the market for the VCs to give you their money.

VCs are betting on your product to scale and find fit on the market so they can later cash out big. So it is usually easier if your product is an improvement of another existing solution or a totally new innovation creating a faster, cheaper, more effective way to solve a certain widespread problem on the market.

What kind of money is the company making and how much?

Your startup needs to make money in a clear manner so the VCs would understand if the company’s solution is profitable enough and how it will scale because that is the main checkpoint the VCs want to see.

For example, consistent revenue where customers pay a recurring price for a good or service such as daily, monthly or annually is more attractive to investors than a one-off payment that is hard to predict when the buyer is purchasing again.

Getting your unit economics is vital as well. The VCs want to see how much it costs to acquire a new customer, average lifetime for the customer, their lifetime value, and also per-unit profit margins. VCs want to see how your company plans on decreasing operational costs as it increases operational profits. Why? The investors want to see if they have a big payday as they exit so they have a reason to give you their money.

Who is the founder of the company?

Not in “what is their name?” No. Rather, who is the founder, as in “what is their story?” VCs want to know the founder’s background so they can analyze their character as someone to be trusted, someone resilient, and someone who does not back out on their word. The investors also want to know the founder’s business history to understand their experience and how it helps their current company’s work.

The VCs want to know if the founder is someone relatable, likable, and someone who can build trust and connection between the company and its customer base. Investors always invest in an individual, being the founder, because they are the one with the ultimate vision for the company and the ability to take it there so they want to back someone capable.

How much traction does the company have so far?

Once again, VCs come into a company to help it scale their existing product and customer base. To do so, they want to see proof of what has been achieved before in terms of revenue and a number of paying customers.

Investors try very hard to avoid pre-revenue companies because they want assurance of immediate growth so they can expect a huge ROI. A VC would rather inject $400,000 into a company with $700,000 of revenue than in a company with $250,000 in revenue because covering their initial investment with existing revenue is their best tactic to hedge their bet.

How do I exit?

Investors are not in the business of hanging with the startups they invest in for the long-term. No. Their job is to invest in a number of companies that fit their investment philosophy, then double down on those that hit their goals, and exit on a huge interest. That is it. That is their business plan. If they invest in a company at a certain valuation and the company goes on to grow and raises the following round at a higher valuation, the investors get to cash out big and leave.

Do you get it now? If yes, now your job is to show the VCs how your company is about to blow up — not literally though 🙂 by backing your claims with tangible proof and data of your company’s recent achievements and huge plans. Then and only then, will you have a chance at their money.

At the end, it all comes back to solving a meaningful problem.

Investors will invest in companies that are growing fast and need resources to back that growth. That is what excites the investors — fast growth. So get back to work and assess the problem your company is trying to solve, the solution you have created, and the plan to scale the solution into a product that is designed to scale. And when you are ready to prove those details, you will be venture capital ready.

As a founder of a company/startup, you have assembled a team, done your market research, built an amazing product, and are excited to start this journey of continuous building. You are at that stage where you are excited to talk to investors about your product, your pitch deck ready to be shown at any moment’s notice.

And then you hear the question, What is the current and expected value of your startup? Or what amount are you raising and at what valuation?

Firstly, Don’t freeze or panic.

Secondly, one thing you need to understand as early as possible is that valuations are constantly changing. As a business owner: investors, venture capitalists, and even individuals would want to know what your business is worth now and the potential of your business to be worth in the future, and the market share, you can own to invest in your startup.

“Valuation is the analytical process of determining the current (or projected) worth of an asset or a company”

Why is Valuation Important?

Valuation allows you to accurately calculate the worth of all your assets by determining the FAIR market value of your startup. This in turn enables you to :

• Determine company growth
• Have a better knowledge of company assets
• Have good negotiations with prospective investors
• Access to more investors
• Establishing partner ownership
• Exit strategy planning

Valuations are required in several situations that involve but are not limited to company re-organization, employee stock/share options, shareholder disputes, mergers, or acquisitions.

Now you want to get started on your valuation, keep these in mind:

1. Do your Research

This can not be emphasized enough. You need to convince potential investors that you will WIN regardless of the competitors you have so graciously outlined in your pitch deck.

They need to know that despite the competition, you and your team can achieve significant growth. Understanding your business dynamics and the market will come in handy when you are ready to put value on your company and determine your assets.

This also gives you more confidence in conversations where you are trying to sell your startup. Investors like people who truly understand their business to a very strong degree and understand the market or how to win in the market they choose to play in.

2. Understand it’s a process

Valuation is a continuous process. Don’t be in a rush to slap a number on your value. Ask yourself, Why are you valuing your business at this amount? What do you intend to accomplish with this valuation?

Research again, Look at your competitors, understand their business strategies. Research the investment community. Who is investing in who? Who is investing in your competitors? Talk to the community. They say It takes a village. Be a part of the village. You can’t know it all but you keep learning, keep adapting, keep getting the knowledge required for you to have meaningful conversations with the RIGHT people that can help your business achieve its goals.

Expert rule of thumb : ( When putting out your valuation number for a Pre-seed company raising investment please ensure your % share of the company to give out is never above 10–15% depending on how you negotiate with investors this allows you to have more for follow on investment rounds and options for raising and also raise for funding that can get you to the next milestone and achieve projected traction, in other words, raise intelligently and not just because ), negotiate properly and read the deal terms and term sheets well before you onboard any partner…remember it’s a long term marriage.

3. Think Ahead

What is the current and EXPECTED value of your company? It’s not just about now. Always think ahead. Your initial valuation sets a precedent for all future valuations. Things are constantly changing and so will the business. A lot can happen between when you receive your pre-seed investment, seed, and even series A seed. You are still at that stage where you can’t predict everything.

Don’t price your value too high or too low. Keep in mind that whatever your valuation, you must be able to match it with your growth targets and numbers.

In summary, Rome wasn’t built in a day. Some of your investors would end up being long-term partners. Ensure value other than capital is being added on both sides of the value chain.

This is the beginning of a long series of events that determines the future of your company. Don’t relent, you’ve got this.

Keep Building!!!

Let us help you raise funds seamlessly on GetEquity. Start here: https://www.getequity.io/company/