In the head of a Moroccan / African VC – Kalys Ventures

Sara Z. & Ghita Zniber - 5mn read

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Standing at the edge of a cliff, this is where every startup founder finds themselves, teetering between failure and greatness. What about a VC, where “us” against the world is possible, an investor that offers not only the funds but a partnership? Almost like a BA, but with a better understanding of the VC rules…

At just 24, Ghita has already traveled extensively, from China to the U.S., before returning to Africa to contribute to a wave of innovation three years ago. Together with her partner Salma at Kalys Ventures, they position themselves as supportive allies and early believers, standing by startups through every challenge and triumph.

“It’s not just about funding; it’s about creating a partnership where the entrepreneur is always the priority.” She said.

The daily grind – About understanding & decision making

What happens in a VC’s head? A little alignment for startup founders… here’s a checklist to guide every entrepreneur’s journey:

1. People and Teams First: VCs prioritize the strength and potential of the entrepreneurs and their teams. It’s not just about the idea—it’s about the people who will execute it.
2. Profitability Over Cash Burn: VCs invest in businesses with viable, profitable models. Continuous cash burn without a clear path to profitability is a red flag.
3. Self-Sufficiency is Key: Venture capitalists are not there to micromanage or train the team. The company should be capable of running independently, with a strong leadership team in place.
4. Fundability and Growth: A startup must demonstrate significant growth potential, showing a trajectory where costs decrease and revenue scales over time.
5. Scalability The business model must be scalable, with the potential for substantial growth, to be attractive to VC funding.
6. The Startup Mentality: Founders should fully grasp what it means to be a startup—focusing on rapid iteration, finding product-market fit, and scaling, rather than operating like a traditional small or medium-sized enterprise.

This checklist serves as a foundation to align your startup with what venture capitalists typically look for, ensuring you’re on the right path to attracting and securing investment.

And Tech in all of that?

When it comes to technology, it must serve one of three main purposes for the startup’s clients / customers:

• Boost Revenue: Drive higher turnover by creating opportunities for increased sales or market expansion.
• Cut Costs: Streamline operations to reduce expenses and increase profitability.
• Enhance Processes: Optimize workflows and processes, ultimately supporting the achievement of the first two goals—either by driving revenue growth, reducing costs, or ideally, both.

The Mindset – Risks Vs Rewards

Early Exit Strategy

From a VC perspective, It’s crucial to guide the portfolio companies in defining their exit strategy early in their journey, ensuring they have a clear vision for the future. Two Types of Companies:

• Market Restructurers: These companies focus on reshaping or optimizing existing markets.
  • Typical Exit Path: Often, these companies find exit opportunities with large corporations. These corporates may struggle with the agility needed to restructure the market themselves and therefore look to acquire startups that have already paved the way.
• Industry Disruptors: These companies aim to revolutionize or create entirely new industries.
  • Distinct Growth Trajectory: Their path typically involves scaling to a point where they become attractive to private equity (PE) funds or are positioned for an Initial Public Offering (IPO) where they become leaders in their markets.

Tailored Exit Strategies:

• For Market Restructurers: Consider preparing them for acquisition by identifying potential corporate buyers early and aligning their growth strategy to appeal to these entities.
• For Industry Disruptors: Focus on scaling operations, capturing market share, and preparing for larger exit options like PE buyouts or public market offerings.

For both cases, Strategic Alignment remains fundamental, ensuring that each portfolio company’s exit strategy is aligned with its business model and market position can significantly increase the likelihood of a successful exit.

Long-Term Vision in Emerging Markets

Being a venture capitalist in emerging markets means working closely with big companies to build a lasting vision for the future. Here’s how it comes together:

• Investing within the local and regional ecosystem: By forming strong connections with local corporations, we can create a supportive environment where startups can grow and eventually find their exit within the community, keeping the benefits local.
• Blending Roles: We don’t just act as investors—we take on the role of a venture builder too. This means working hand-in-hand with startups and large companies to ensure everyone grows together, creating a win-win situation for all.
• Fostering Sustainable Growth: Our goal is to help startups thrive and scale in a way that contributes to the long-term development of the local economy. We’re not just looking for quick wins; we’re focused on building something that lasts. This approach is about more than just making investments—it’s about creating lasting value for startups, big companies, and the entire ecosystem.

So, how far would you jump to the other side of the cliff? The view from here is quite better, and the the beginning of a new journey!!

Full Interviews here 👇🏼

• 3jaj Podcast
• Fiha o Fiha Podcast

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Discover the State of Funding in MENA – 2019 to 2023 : The white paper of this month is taking you through the ups and downs of MENA’s startup funding over the last 5 years. If you’re a startup founder, an investor or an ecosystem builder, this is your chance to learn from the past, spot the trends, and write your own success story.

Don’t miss out on knowing the history that could shape our future!