Microtraction: New Standard Deal

We now have a new deal. African startups that get backed by us will receive a minimum of $100k for 7% equity on a post-money SAFE and an option for a quick top-up in their next round of up to $350k as long as we are not more than 25% of the round and meet specific milestones.

For background, in 2017 we had a standard deal of $15k for 7.5% equity in startups. In 2020, we reviewed our standard deal to $25k for 7%. Over the years, we have seen different changes in startup costs and the economic environment and continue to grow with these changes by matching the current tech economic environment.

In addition to our capital investment, we have a growing community of 80+ remarkable founders willing to help other African tech founders in our portfolio, a network of partners in specific areas of running startups (Hiring, Legal, Fundraising, Business Development, PR, etc.), an increasing scout network across Africa with specific operator expertise that our founders can tap into, and the very best LPs always there to help our portfolio succeed.

We strongly believe this is the right time for this change. We hope that more African tech founders are encouraged to continue to build without immediate pressure to fundraise but focus on finding product-market fit and building a successful business.

At Microtraction, our long-term mission is to accelerate Africa’s transition to a sustainable and developed economy. We do this by investing in entrepreneurs who leverage technology, capital, and innovation to try and solve some of the largest problems on the continent. If you are working on solving one of these problems, we should talk!

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