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What is the AFI About?

1. What is it about?
2. Strategic Objective
3. What we offer?
4. Our Operating Model
5. Potential Angels and Angel Investment
6. How much do Angels invest in a business?
7. Areas of Interest

The Angel Fund Initiative Nigerian Society of Chemical Engineers Foundation (NSChEF) is aimed at enhancing the entrepreneurial capacity of chemical engineering graduates, thereby, advancing the economic contribution to the society. This is line with the mission of the Nigerian Society of Engineers (NSE) which is to provide quality service aimed at enhancing professional competence and development of its members at all times.

To back Chemical Engineers with bankable business ideas and provide equity capital to start businesses arising thereof or scale up capital for qualifying existing businesses

This initiative was inspired to bridge the unemployment gap resulting from the alarming number of graduates who leave tertiary institutions each year in Nigeria with no prospect of gainful employment following their National Youth Service Corps.

The NSChEF Angel Fund Initiative is geared towards incubating bankable ideas from chemical engineering and get angel investors to provide both equity capital and mentoring to turn them to profitable operating businesses and employers of labour.

Angels Membership Model

The membership model is one where angels pay an annual membership fee which gives them access to sit at pitch sessions. The model as currently operated:

  • Is focused primarily on Seed Stage Technology Investments.
  • Currently has 15 Angels who pay an annual due of N500,000 (Five Hundred Thousand Naira Only) and have each committed to an agreed amount of naira per year investment through the network
    • Members make their own investment decisions and provide funding and mentorship directly to successful entrepreneurial teams and
    • The Secretariat sources entrepreneurial teams, facilitates “Angel Pitch Days” and monitors investments.

Opportunities & Deal flow Framework

The opportunities to create a deal flow pipeline for Angel Funding derive from the framework below:

  • A continuous assessment of the Chemical Engineering Industry is carried out to identify gaps and determine where to play in terms of technological developments, products and services offering.
  • Model framework and Code of Conduct will be established setting out the investment criteria, funds requirements and disbursement, contractual documentation, monitoring and reporting framework and sustainability plan as well as the manual of operations.

Sources of Funding

The funds will be sourced from select members of the Nigerian Society of Chemical Engineers, Patrons and Friends of the profession who commit to invest a certain amount annually and pay a membership fee based on proposed model above. Members of this team will be expected to make individual and or collective investments based on the pre-agreed set of assessment criteria.

Investment Framework

To guide the submission and assessment of potential investment opportunities, the following framework serves as a guide in determining the application the NSChEF fund. Below is a brief description of the framework:

  • Description of the business idea/plan.
  • Business Model
  • Management structure of the Business
  • Financials – Investment amount required, Balance sheet, Cash flow statement, Breakeven Analysis, Income Statement, Forecast/Projections
  • SWOT Analysis – Strengths, Weaknesses, Opportunities, and Threats.
  • Progress – Achievements made so far.

Monitoring and Evaluation

A committee is designated and charged with the responsibility of evaluating the investment. The Foundation Secretariat keeps records of all investments and maintains strict confidentiality of records. The secretariat will also be in charge of monitoring the investments and interacting with beneficiaries regularly and prepare periodic report to the angels on the performance of all investment portfolios.

An Angel investor (also called Business Angel) makes use of their personal disposable finance and makes their own decision about making the investment. The business angel would normally take shares in your business in return for providing equity finance. In so doing, they normally seek to not only provide your business with money to grow, but also bring their experience and knowledge to help your company achieve success. Angel Investors seek to have a return on their investment over a period of 3-8 years. Angels can invest on their own or with a syndicate. Angel investors then follow their deal either actively taking a role on the board or actively supporting the business, or may act passively as part of a group with a lead angel taking this role on their behalf.

Angel investing is equity finance. Angel Investment differs from Venture Capital, VC, finance which invests in businesses through managed Funds, raised with private or public money. The venture capitalist manager invests the money on behalf of the Fund which has to be profitable and make a return for the fund’s investors. Due to high costs of administration and the need to be very selective to ensure a return on the fund. VC funds are more risk averse and thus make fewer small investments in start and seed stage. This makes business angels more and more significant in funding new ventures by supplying smaller amounts of capital to companies that cannot be economically funded by the established venture capital market.

Business Angels make their own decisions about investments. They engage directly in meeting the entrepreneurs, often observing them pitch their business. Angels are also directly involved in the due diligence and investment process, and are signatories on the legal investment documentation. This can be done either on their own or with a syndicate. Angel investors follow their deal either actively taking a role on the board or actively supporting the business through mentorship, or may act passively as part of a group with a lead angel taking this role on their behalf.

Business Angels differ from venture capital firms not only in the size of their investment, but also in their approach. Angel investing is often called “patient capital” since angels are less concerned with rapid return and exit and are prepared to support the business through its path to growth and exit over a longer time scale.

 

In general, individual business angels will invest anywhere between ₦2 – ₦10 million in a single venture, depending on the business and the growth needs. But this can be lower and occasionally much larger sums according to the disposable wealth of the individual and opportunity identified. Also with an increasing trend towards investing in groups and syndicates, angels can crowd fund larger amounts, typically above ₦50 million.

We are interested in entrepreneurs that think creatively and Businesses that apply smart innovation and technology to turn their ideas into unique products and services that are sustainable and solve real commercial problems.

Our areas of focus includes:

  • Agro Processing
  • Renewable Energy
  • IT/Digital Technology/Software Applications
  • Food Processing/Technology and Food Preservation
  • Chemical Processing
  • Oil and Gas Processing
  • Manufacturing
  • Production Technology