Otto Beseka Isong is Founder & CEO of He’s also a leading business development strategist in Silicon Mountain.

In this article, Otto Beseka, discusses why Cameroonian startup founders and founding teams fail to raise capital. Then he proposes a way to turn the figures by using a startup investing template, particularly tailored for the Cameroonian tech ecosystem.

One of the most common complain from Cameroonian startup founders and founding teams is the lack of capital.

Yet, there are thousands of Cameroonians both at home and abroad, who want to invest in technology startups. They have tried over time with little or no success. From my experience, the most unique source of failure stems from the lack of a common language. A language to use to make investment, accept investments and agree on priorities.

While startup founders/founding teams want to talk more about their products and markets, the investors — who most often have little or no experience in startup investing — want to talk more about financial records.

Yes! Both are right.

However, their focus on two extremes makes it impossible to agree on the amount of capital needed, the valuation to use, and the priorities to focus on.

Capital needed

Most often, startup founders/founding teams want to raise as much capital as possible, so they can have a long runway before the capital is completely burned. Cameroon is a hard terrain to raise capital.

Startup Investing Template For the Cameroonian Tech Ecosystem
Image Credits – Otto Beseka,

So, it is viewed that once given the shot, take as much of it as possible since none can be sure to have another of such opportunities in the near future. Investors on the other hand, however, want to pump in as little capital as possible for the sole reason that they want to minimize their exposure to risk.

But raising capital for a startup ought to be more than the two extremes.

I think what the founder/founding team and investor will agree on is that startup development works in phases or stages. Therefore, the capital should go to fund one phase after the other. In that case, the founder/founding team needs to raise only as much money as is projected to be needed for any given phase. This way, the investor has a direct way to minimize their risk exposure, by providing the investment needed for the phase.


Startup Investing Template For the Cameroonian Tech Ecosystem
Valuation — the diversion

This is the biggest area of deviation. Though the founders/founding teams still have very modest valuations for their startups compared to other countries, the investors think those startups are overvalued given their lack of structure and little or no revenue. The founders/founding teams will most often argue that their pals in other parts of the world are getting better deals.

Why shouldn’t they?

The investors on the other hand, will most often say they should stop comparing with Silicon Valley, Silicon Savannah or Lagos. That those ecosystems have different challenges and contexts. While the founder may want to raise 30 million FCFA (US$ 53,000) at a valuation of 300 million FCFA (US$ 530,000), the investor who is willing to part with that much, will however be asking for a valuation of about 60 million FCFA (US$ 106,000). It’s like day and night.

But here again, they’ve missed the point.

At the early stages, valuation isn’t a science, it’s not even an art. It’s more about providing as much resources as is needed at a valuation that will enable the founders/founding teams to be able to raise more capital in future investment rounds. As such, the founders/founding teams need not struggle to raise all the investment needed to get to cash flow positive in one go. They just have to focus on raising investment for the necessary phase. This investment could be in the range of 3–6 million FCFA and the valuation of 60 million, FCFA makes a lot of sense.

Priorities to focus on (Phases/Stages)

From what I’ve learned reading blogs and articles on startups, I conclude that there are six phases of startup development. These phases differ because they have different milestones to be achieved. They are:

  • Conception
  • Product/Market Fit
  • Business Model
  • Scaling (Technological/operating foundation)
  • Scale (Market dominance)
  • Scaling (Expansion)

These stages are universal. They can be understood by both founders/founding teams and investors. I believe this is the model that’s used to guide investing in more developed startup ecosystems like Silicon Valley. We too can use this as a template. How does it work?

Tech startup investing template

Phase 1: Conception

Generally, the founders/founding teams have an idea that they believe could be transformed into a big business.

  • Priority: Build on the idea and prove that the idea (s) satisfies some sort of need in the market.
  • Deliverable: Minimum viable product (MVP).
  • Ownership: 100% owned by the founders/founding teams.
  • Capital needed: Minimal, most of it can be provided by the founders/founding teams.
  • Valuation: Not relevant.

Phase 2: Product/Market Fit

Startup Investing Template For the Cameroonian Tech Ecosystem

From the data gotten from the adoption of the MVP, the founders/founding team believe they could be on something big. As such, they agree to build a product and do everything to achieve product/market fit. In doing this, some teams may need new capital injection. Others may not. And others may be part of an incubator. In case the team raises investment, we could go with the template below:

  • Priority: Build a product that satisfies the market need.
  • Key hires: Engineers, Designers, Growth Hackers
  • Deliverable: Traction in the market
  • Ownership: 80% + 20% owned by the founders/founding teams and first investors respectively.
  • Capital needed: 3–15 million FCFA.
  • Valuation: 12–75 million FCFA.

Phase 3: Business Model

Let’s assume the team, in using the funds provided in Phase 2 succeeded to achieve product/market fit. In this phase, while pushing for more adoption, they will have to start working on the business model. The business model isn’t only about how to make money. It’s also about the cost structure and the broader economics of the business. In this phase, some teams may yet, need new capital injection. Others may not. In the case the team raises investment, we could go with the template below:

  • Priority: Sort out the economics of the product
  • Key hires: Chief Operations Officer, Business Development Specialists
  • Deliverable: Practical and sustainable business model
  • Ownership: 64% + 16% + 20% owned by the founders/founding teams, the first investors and the second investors respectively.
  • Capital needed: 7–25 million FCFA.
  • Valuation: 35–125 million FCFA.

Phase 4: Scaling (Technological foundation)

We are still on the assumption that the execution of the previous phase (Phase 3) led to a success. In Phase 4, the startup should be getting off the experimental mode. It has found its north star. Now, it has to put in place the foundations of the machinery that will enable it reach its destination. Most often, even startups that did not take in investments from outside investors for the previous phases, will be looking at fundraising from outside investors. This Phase may see the need for a total overhaul of the product and business model.

The template for Phase 4 is as below:

  • Priority: Build the technological infrastructure that will serve millions
  • Key hires: Chief Technology Officer, Software Architects, System Administrators, Legal Counsel, HR Specialists Accounting and Finance Specialists
  • Deliverable: Technological infrastructure
  • Ownership: 51.2% + 12.8% + 16% + 20% owned by the founders/founding teams, the first investors, the second investors and third investors respectively.
  • Capital needed: 15–50 million FCFA.
  • Valuation: 75–250 million FCFA.

Phase 5: Scaling (Market dominance)

Startup Investing Template For the Cameroonian Tech Ecosystem

Naturally, more than one startup will be in a given niche. However, the successful startup will be the one with the dominant market share. The template for Phase 5 is as below:

  • Priority: To dominate the market
  • Key hires: Chief Talent Officer
  • Deliverable: Winner takes all advantage
  • Ownership: 40.96% + 10.24% + 12.8% + 16% + 20% owned by the founders/founding teams, the first investors, the second investors ,third investors and fourth investors respectively.
  • Capital needed: 25–100 million FCFA.
  • Valuation: 125–500 million FCFA.

Phase 6: Scaling (Expansion beyond the niche)

Find, test and conquer new markets. The template for Phase 6 is as below:

  • Priority: Find, test and conquer new markets
  • Key hires: Chief Financial Officer
  • Deliverable: New markets
  • Ownership: 32.768% + 8.192% + 10.24% + 12.8% + 16% + 20% owned by the founders/founding teams, the first investors, the second investors, the third investors, the fourth investors and fifth investors respectively.
  • Capital needed: Above 100 million FCFA.
  • Valuation: Above 500 million FCFA.


The conservative figures are as a result of the nascent nature of the Cameroonian tech ecosystem. At the moment, investors have a leverage. However, they have been using the leverage to choke the system rather than help it grow. With this model, investors still have the leverage, but they are giving it room for growth. With more success, founder/founding teams will have leverage which will be reflected in the Valuations. Until then, we need something that works for now. Can we start testing this with the existing startups?

English EN French FR

Sign Up for Our Newsletters

Get notified of the best deals on our WordPress themes.

You May Also Like

William Elong Raises 1.3 Billion FCFA to conquer the international market with his drones made in Cameroon

7 Well Paying Services to offer in Cameroon with Zero Capital

Dangote, Adenuga Top Forbes Africa Billionaires’ List 2019

How to Start and Make Money From a Mushroom Business