Angel Investing Areas

I’ve been an angel investor for over 10 years. I try to invest in areas where I have have some sort of asymmetric advantage; usually in specific areas where I have knowledge and experience or people who I know well.

Here are some areas that I’m super excited about and actively investing.

Crypto / Web3

I think crypto/Web3 is going to change the way we build and consume products in many different industries across the digital and physical world. It’s going to be a multi-decade long shift and I’m excited about engaging with and supporting the community at all levels (more here).

I’ve been investing in chains and tokens since 2013 (starting with BTC) and played a more active role in DeFi towards the the end of DeFi summer in 2020. I now spend time every day learning about new projects, buying tokens, yield farming and providing liquidity for projects that I plan to support over the long term.

I’ve also started started making equity investments in Web3 companies and I’m particularly excited about companies that are innovating in:

  • Future of finance (DeFi, Emerging markets)
  • Content creation and ownership (NFTs, marketplaces)
  • Gaming (collecting, competing, play-to-earn)
  • Community (DAOs, creators, contributors)

There is still much to learn and much to follow as more innovation happens — this is just a starting point and I’m sure this list will continue to evolve. I’m mostly chain agnostic, but particularly excited by some of the possibilities that are unlocked with faster, cheaper protocols like Solana.

Example companies include Ponto (backed by Polychain and General Catalyst), Mirror (backed by USV and a16z), Topos and Paysail.

Future of Work

I think that the way we work is going to change fundamentally; jobs will be unbunded, people will collaborate digitally (natively), and more creators will be able to monetize their passions. These shifts are being accelerated by Covid-19 and it’s incredible to see all the innovation happening here.

Tools for Work

As more knowledge work becomes distributed, more work will happen in the cloud. I believe we’ll look back in 5 years and be shocked at how inadequate our tools were in 202I. There are three areas of innovation that I think are especially exciting:

  1. Communication & Collaboration: I think the best tools will seamlessly work in person, hybrid & remote as well as synchronously and asynchronously (Slack is a great example). If we reduce the mental load as to “which tool is right for which situation” work will be more fun and productive for us all.
  2. Orchestration Layer: As we use more and more tools to build products together, each of these tools will need to communicate with each other better (using APIs) and we’ll need some common standards to make this happen effectively.
  3. Community: We will need better tools to build genuine deep relationships for organizations (internally and externally) – people desire to find community and their tribes and invest deeply in these communities.

At Automattic, a fully distributed company for 15 years with over 1400 people across 85 countries I helped make P2 which is the internal tool we used to power distributed work at scale and so understand this space as both a user and a builder. I’m also a productivity nerd, tools enthusiast and product manager so love meeting startups innovating to make work better — although incredibly competitive, some new products will be built that we’ll use every day for work.

Example companies include Remotion, Aviyel, Claap, Playbook, and SkillMagic.

Tools to Create

Creators of all kinds, from all over the world are now able to make a living through (side) hustles/projects over traditional employment. There have been great improvements in creator tools (and reduction in cost) and access to large audiences through distribution channels (albeit through mostly closed networks – Twitter, Instagram, YouTube). I worked at Automattic on WordPress for the last few years and 43% of all websites in the world are now made using WordPress, an open source project to help folks create their online presence.

The tools that creators need to power their workflow, improve production quality and engage their audience are going through rapid innovation and improvement. The best creators will also want a more direct relationship with their community and want to capture more of the value they create over paying a large share of this value to these discovery and engagement platforms.

Example companies include Ribbon, Slerp, Contra and Mirror.

Tools for Gamers

I believe that making games is going to be as easy in the future as making a website today. There is a ton of innovation in both the tools both for gamers and game developers and I’m excited to support building this future. I tend not to invest in game studios but look for products that support the growth of the overall gaming industry instead. I spent five years making games at Pocket Gems, where our games reached hundreds of millions of users and it was one of the most fulfilling professional experiences I’ve had to date.

Example companies include Start Playing Games, Metafy and Vungle (sold to Blackstone in 2019).

Emerging Markets

I believe that there will be significant value created in global, and particularly emerging markets over the next decade. The data point to more and more entrepreneurs building businesses in their home countries (even after a tier 1 US education #novisas) versus trying to build their companies in entrepreneurial hubs like Silicon Valley e.g. over 40% of Y Combinator founders are now international, and the vast majority want to build their businesses in their home markets.

Africa

There is great potential for technology to power the growth of Africa – many young people ready to work (median age of 19), increased urban mobilization (45% living in cities by 2025), high smartphone penetration (50% and growing fast) with digital finance access, and increasing capital and talent flows into African technology hubs. I grew up in Kenya, worked in mobile money across Africa and have been an active investor on the continent for 7 years; it is now more than half of my seed investing activity.

I run a fund (with external investors) to support this thesis and have written about it here, if you want to learn more. It’s never been a more exciting time to invest in technology companies in Africa 🙂

Example companies include: Flutterwave, Sokowatch, mPharma, and Shara. Full list of 40+ companies here at https://www.mushaventures.com/africa.

Global (mainly Asia)

I’m also investing more foundational startups all over the world (mostly in Asia) and my general approach is to partner with a local seed fund or angel investor and build a strong relationship with them as both an LP in their fund and co-investor. I have started implementing this approach in Indonesia (Intudo), India (iSeed), and Asia (Iterative) and am learning more about the Pakistani venture ecosystem as well.

I believe that the best SAAS companies in the world can come from anywhere as long as product quality and sales (team with experience in western companies helps) is world class. If these companies are based in countries with cheaper technical talent they can offer products at lower cost and win sales against similar companies who are building in markets like the US. I’m also excited about foundational fintech rails in each market (where local norms and regulation are distinct).

Example companies include: Cashfree, Guidewheel, SalesKen, and Everstage.

Amazing People

As much as I enjoy investing in areas where I have specific understanding or theses that I’m exploring, incredible people are a trump card.

If I know the founders well or someone in my inner circle can vouch for the founders I’ll often invest as long as I believe that the market is big enough. Ultimately, and especially at the earliest stages, people are most important and amazing people are difficult to find.

Examples of companies founder by people I know well because I collaborated with them closely in the past include Heron Data, Rinse, ID.me and many others.


If you’re interested in talking about ideas in these areas please feel free to reach out on my website (https://www.mushaventures.com/contact). I often co-invest with a close group of angels, Village Global (where I’m a Network Leader) and Sequoia Capital (where I’m a Scout).

Investing in Africa

Once when I was 6 years old, sitting in the car with my father in city traffic, a homeless boy about my age knocked on the window. My father opened the window and handed him some candy. Then he turned to me and said, “You are sitting here and that little boy is out there. I hope you appreciate it was luck of the draw and you will do something good in your life.”

I was born and raised in Mombasa, Kenya and my family has been here for 5 generations (since the 1850s). I grew up in relative privilege compare to most Kenyans. I remember that moment quite clearly even now, over 30 years later.

I’m frequently asked ‘why’ I invest in startups focused on Africa. There are many reasons for my interest in investing in Africa, and I don’t pretend that I invest out of altruism, but I think this is what led to my interest in supporting early stage entrepreneurs on the continent.

I always liked maths and science and studied engineering at university. This experience taught me to approach problems from first principles and think through effective systems. I don’t really have skills that I can directly help people (e.g. a doctor), so I needed to approach the problem space differently. In my early 20s, I realized that entrepreneurship and technology could drive economic development, in a relatively capital efficiency manner. I started building my career in technology, starting at Google in London. After spending time at Index Ventures and learning about venture capital, I realized that, with even small amounts of capital, you could have outsized returns both in terms of value creation and impact.

Technology entrepreneurs create products that improve the effectiveness for people and businesses, and create new jobs with new skills. Given all these benefits I decided to start investing in technology companies in Africa after ‘learning to invest’ in silicon valley as an angel through my own fund, Musha Ventures, starting in 2011. As an inexperienced investor, I tried to maximize learning per dollar invested, as I did not have a lot of capital. I stayed disciplined by writing investment memos (that no one read), conducting reference checks and completing annual reviews for every company. 

In 2014, there was not much capital available for early stage entrepreneurs in Africa and even today in 2020, there is still a deficit of capital available for those who don’t have the right networks. With small investments I am hopeful that I’m able to have an outsized impact on this ecosystem. Even when I don’t invest, I try and give entrepreneurs feedback, be clear on my reasons for passing, or share articles or advice that I think might be valuable to them. 

There have are some early positive signals; my Africa portfolio has rougly doubled in value (on paper), and the companies have created thousands of jobs, enabled new startups to exist, and improved efficiency in archaic supply chains / markets. Despite these early signals, it’s still very early in the life of the venture capital ecosystem in Africa and it’s still unclear if these companies will endure and to have a lasting positive impact on the economic development and people’s lives in the markets. Only time will tell.

My plan, which has remained consistent over the last 5 years, is to continue to think very long term and invest consistently and conservatively in early stage (mostly B2B) technology businesses in Africa and support entrepreneurs doing the hard work along the way. 

Guide to climbing Mt. Kilimanjaro

Summit Day

In January 2018, my wife Tej and I climbed Mount Kilimanjaro. It’s something I’ve been wanting to do since I was a kid (at least since my mum climbed it when I was 16) and I’m really happy I was finally able to make it up the mountain.  Kilimanjaro is the largest free-standing mountain (not surrounded by a range) in the world and the tallest peak in Africa. Uhuru peak, the summit, is very high at 19,000 feet / 5900m.

I’m writing this to document my own experience and make it easy to share with friends. I’ve already shared some of my research with at least 3 people who’ve ended up doing a similar trip and all had a great experience.

Preparation

In preparation for the trip, the most important things to do are to reach a base level of physical fitness and to get good gear. The weather can be severe and the last thing you want on a tough day is to have the wrong equipment and make your day even harder.

A German guy on the mountain said to me on the mountain:

‘There is no such thing as bad conditions, only bad equipment’

In terms of gear for the trip, I put together this spreadsheet inventory with everything you need for the trip. I would go through it line by line and make sure you bring everything that is a must have. I pulled this gear list together from the following sources:

A couple of high level points:

  • Ski gear: I used my ski gear and it worked out great – merino wool base layers, insulation mid layers and waterproof outer layers are exactly what you need.
  • Snacks: Bring some tasty snacks – e.g. dried mango, nuts, chocolate, energy gels (especially good). As you get higher you will lose your appetite and snacks come in really handy as small energy bombs.
  • Wipes: This is how we ‘showered’ every day before changing and getting in our sleeping bags.
  • Leisure: I’d suggest bring a kindle and some cards to pass the time at camp.

In terms of training, the hike is not super physically challenging so I’d work on your general fitness and walk on a stair master or at incline a few times a week if you’re worried about it.

Operator and route selection

Tour Operator

We considered a number of tour operators including Zara Tours, Monkey Adventures, Popote and Kilimanjaro Brothers. We narrowed it down to Kilimanjaro Brothers and Popote and chose Popote in the end because they were better priced and still seemed to have a first class operation. I highly recommend Popote, they were great and we were really happy with the service they provided.

Tipping

Tipping can be a very stressful time for folks at the end of the trip, but it does not have to be. You build a bond with the people you helped you up the mountain and it’s a nice moment to appreciate them. I made this spreadsheet with the amounts we tipped each person (in 2018) on our trip in case it’s helpful for others. Make sure you bring cash and USD is probably the easiest.

We ended up sponsoring guide training for our ‘waiter’ who is now a guide with Popote as we really liked him and wanted to do something small to help.

Route

We picked the 7 day / 6 night Lemosho route which was wonderful. The other option we considered was the 6 day / 5 night Machame route but ultimately decided to go for the longer more picturesque route to help us get better used to the altitude and increase our chances of summiting. We also figured that 1 day extra was not a big sacrifice given the time and long travel invested into the climb. I would not recommend any longer than 7 days though – by the last day we were pretty excited to get off the mountain.

Time of the year

There are two main seasons for climbing Kilimanjaro. January-March are the ‘warm’ (it was still -15C when we summited) but slightly wetter months and August-October are the colder and dryer months. I don’t think it really matters too much which block you choose.

Climb experience

The climb is a great out and back experience and we really enjoyed spending time with our guides and each other and enjoying the changing terrain as we made it up the mountain. Overall it was easy/moderate difficulty except the ‘Summit Day’ which is challenging.

On ‘Summit Day’, we started the ascent at midnight so it’s dark almost the whole way to the summit which we reached around 630am. It’s a demanding day mentally and physically because of how much you walk (50k steps walked, 3k vertical feet up and 6k feet down), the altitude (dizziness, nausea) and the cold (-15C and windy). Both Tej and I had moments where we felt like we would not make it but we helped each other through it – most of the actual difficulty on summit day is mental but you’re rewarded with all the endorphins when you make it to the top.

Here are some photos of our trip:

Day 1: On the way to the start of the climb with our crew
Day 3: Lava Tower (altitude acclimatization)
Day 4: Climbing the Great Barranco,Wall
Day 5: Our tent in Barafu Camp just before the summit day
Cheesy Summit Day Photo – a must!

Investor updates for startups

I’ve invested in about 30 companies over the last 6 years and received a lot of different investor updates. Some companies send few, sporadic (often too detailed), updates whereas others send updates with a fixed structure and on a predictable schedule.

I think the sweet spot for many micro vcs with a portfolio is quarterly updates which arrive on a predictable schedule – e.g. 2 Mondays after the end of Quarter. Founders who update investors on a predictable schedule generally build better companies, in my experience, as there is a correlation with discipline and organization.

Here is my suggested template for sending updates, although this is not meant to be prescriptive and more to summarize the bases covered:

Many startups often miss the ‘Metrics’ section and I think this is the area where most could benefit for improving their reporting.

Template (Quarterly)

Summary

  • Key milestones hit/missed
  • Important takeaways

Highlights

  • Limit to <5 bullet points
  • New customers, product wins, critical hires, geographical expansion

Lowlights

  • Limit to <5 bullet points
  • Lost customers, product failures, lost employees

Metrics

  • Consumer: DAU/MAU, Revenue, Retention/Churn Metric, Employees, Cash, and Burn Rate
  • Enterprise: # of customers, Revenue, New customers, Sales pipeline, Employees, Cash and Burn Rate
  • I recommend showing the same metrics in a table Quarterly and then highlighting YoY and QoQ growth

Product

  • New features or products shipped and a short summary of their impact / future impact

Team

  • New hires / team changes

Other

  • Anything that is not covered by the sections above e.g. Press coverage

Fundraising

  • If fundraising add this section to show progress / any key milestones
  • Also useful for converting existing investors for additional funding

Help

  • Specific intros to investors or potential customers generally yield the best results

I know some founders feel like these updates don’t get noticed but I read every single one of the updates even when I don’t reply.

Changing my Industry

I left my job at Pocket Gems in 2015 to figure out what I should do next with my life. I had always wanted to work on technology in emerging markets (particularly sub-saharan Africa) and did not really know the best way to start doing that. I’m Kenyan, born in Mombasa, but have spent the majority of my adult life in the UK and USA. I decided to move to Kenya temporarily to figure out the best way for me to work on emerging market problems. 

I met over 50 startups, investors and technologists, spent a few months working at M-Kopa and learned a lot from my time in Nairobi.  I realised how much my eyes opened up by just spending time physically in the country and interacting with like-minded people on a day to day basis. I spent around a year learning, thinking and considering what to do next and it was one of the most rewarding years I’ve had in a long time. 

I ultimately decided to work at Segovia Technology, based out of NYC, which is a financial services company focused on sub-saharan Africa. I chose to do this over moving back to Kenya for a variety of personal and professional reasons and I’m excited for this next phase of my career. 

Segovia has a mission that appeals to me (using technology to aid poverty alleviation), has an excellent team who is hungry and focused on succeeding, and is primarily focused on Africa. In the best case, we will be able to reach hundreds of millions of people and in our fail case we help a few thousand people receive aid. 

I’d like to spend the next phase of my career building products for sub-saharan Africa and supporting amazing entrepreneurs who are focused on the region through angel investing (e.g. OKHI, M-Kopa, BRCK). I feel like technology is the path to economic development and poverty alleviation in countries like Kenya and I’m excited to be a part of the journey.

Kenya – Silicon Safari

San Francisco has Silicon Valley, New York has Silicon Alley, London has Silicon Round and Tel-Aviv has Silicon Wadi. I think Kenya could have Silicon Safari*, and I’d love to be part of making that happen.

I never really thought I would go back to Kenya, but when I was back home this summer I had a strong feeling that it could be the forefront of innovation and entrepreneurship in Africa.

A little about where Kenya is today…
Kenya has about 30M people and a GDP per capita of $1,600 ppp Kenya is a leader in mobile innovation in the developing world. Kenya currently has a mobile penetration rate of ~ 50% and is forecasted to hit 90%+ by 2013. M-Pesa (mobile-to-mobile money transfer through text) was created here by Safaricom (part owned by Vodafone) and now almost $30M are transacted every day. This model has been replicated in many emerging markets which look to Kenya as a leader in emerging mobile products – particularly in banking and payments.

In October 2010, Barclays started offering M-Pesa to it’s clients and we are not far from a place where mobile phone ‘bank accounts’ can offer most services provided by traditional banks which have a far lower penetration rate than mobile phones in Kenya. In September 2010, a major carrier (Zain) cut all call costs by 75% and all the other major carriers followed suit. With infrastructure capital costs already paid off, the market is highly competitive and consumers are getting excellent quality of service at constantly decreasing prices.

I’m not the only one who sees potential in Kenya… 
(work in progress)
  • Techcrunch, Sarah Lacy in particular, did a piece in August 2010 about the possibilities of mobile in Kenya 
  • Google opened their first non-sales office in Kenya in 2007 and is tasked with figuring out their entire Africa strategy
The Entrepreneurial Ecosystem is underdeveloped…
  • Talent – Classic brain drain coupled with an underdeveloped local education system particularly in for technical talent is a HUGE issue. 
  • Capital – There is little capital for early stage ventures and few investors on the ground who have the appetite and expertise to invest in entrepreneurs. The path to exit is also unclear with underdeveloped capital markets and low M&A volume.
  • Community – We need to build a community for entrepreneurs and investors to find each other and share ideas and best practices. This is starting with initiatives like vc4africa, and Nairobi’s IHub but these are still in their very early stages
What I’m hoping to do…
I moved to Silicon Valley to see how the most sophisticated entrepreneurial ecosystem in the world works. I am about to start working for an early stage start up, and am going to try and be as involved in the start-up community as possible. I want to learn as much as I can so when I do go home, I know what could be possible for Kenya.

I don’t know exactly what I’m going to do or how I’m going to do it when I do return to Kenya, but what I do know is that I want to build technology businesses as both an entrepreneur and an investor (maybe some sort of hybrid incubation model would work best). The country needs pioneers for the field and I hope to be one of the people to build the bricks of the entrepreneurial ecosystem.

* Silicon Safari is a term that I made up! Hope it catches on 🙂 Silicon Savannah was something else I was toying with..