Eloho Omame co-founded FirstCheck Africa after spending three years as the founding managing director of Endeavor Nigeria. In addition to her work leading a group of startup founders on the continent, Omame is known for her commitment to gender and inclusion in the venture capital (VC) sector in Africa. Since its launch in 2021, FirstCheck Africa has grown into the leading early-stage fund for tech startups founded by women. The firm has invested in five of the 17 female founder-led startups which have raised over $1 million this year.
What skill set do you most value in the entrepreneurs you back?
My strongest filter for entrepreneurial talent at the early stages is sales skills. A startup’s early momentum depends on the founder’s ability to motivate, inspire, and sell — to customers, potential hires, investors, advisors, and commercial partners. I look for evidence that a founder can accrue a disproportionate share of the resources to keep gaining traction. That’s a critical skill.
Why is pre-seed investing critical to solving the so-called pipeline problem besetting female founders?
Women are building startups in Africa at unprecedented rates. In 2021,134 female-led startups raised $834 million, 100 of them at pre-seed and seed – that’s four times higher (by deal volume and deal value) than the previous year. But the numbers are still tiny, and a huge funding gap remains. It’s not great that more than 50% of that capital went to three later-stage companies with U.S.-based founders.
Widening the top of the funnel by investing in exponentially more female-led companies at the pre-seed and seed stages is the highest-leverage path to addressing the funding gap. If, as VCs, our job is to invest in great companies, we must figure out why our asset class is generally unattractive to female founders in Africa and why they progress through our deal pipelines at different rates. Blaming the pipeline obfuscates the need for us to do that.
Why do you say female-focused VC funds in Africa need updated strategies to address the gender funding gap?
There’s a conflation between development capital aimed at small and mid-size enterprises, social impact capital, and venture capital. All capital is not the same. Many well-meaning female-focused funds in Africa are disconnected from how VC operates. Some strategies, programs, and forms of capital may be helpful for founders in the short term but have negative long-term implications. Their emphasis is at odds with how mainstream VCs think about founders, deals, and returns. That’s a real problem because if you’re an ambitious female founder building for venture scale, you will eventually need to raise from mainstream VCs.
Female-focused VC fund managers in Africa need to do three things better: (1) focus on commercial returns in presenting the opportunity in female-led startups; (2) build high-quality brands, networks, and credibility as critical players in the mainstream ecosystem; and (3) raise larger funds to make concentrated bets, write bigger first checks, and reserve meaningful follow-on capacity.