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Work in Progress, your go-to place for distinctive, motivational tales from African startup founders.
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In this episode, I engaged in an intriguing discussion with Wisdom Anku, who serves as the Chief Executive Officer at Propartners Exchange Limited.
He recounts their path filled with peaks and valleys along with remarkable perseverance that has enabled both him and his team to stay resilient over nearly ten years of backing small enterprises via equity collaborations and investment crowdfunding. Delve deeply into this uplifting narrative of determination, endurance, and steadfastness.
Samuel: Share with us about your enterprise. Could you describe how it all began and what the experience has been like so far?
Wisdom:
ProPartners Exchange Limited has introduced an innovative approach aimed at addressing the funding gap faced by small enterprises and startups. This initiative focuses on providing necessary resources via partnership models to facilitate their growth and development.
This led us into the realm of crowdfunding—more precisely, investment crowdfunding. While we didn’t start from scratch—we had initial funding—it wasn’t enough to get past certain obstacles. As we began feeling overwhelmed and considered expanding our connections, we realized we needed to steer clear of venturing down that path since we lacked the necessary permits.
In 2016, we launched our operations and by 2018, we experienced the effects of the financial sector cleanup. Consequently, the Securities and Exchange Commission (SEC) tightened regulations for companies similar to ours due to our approach. Our aim was to gather investments from various sources and provide them to small enterprises—whether through partnerships involving equity, funding, alternative agreements, or lending money.
We couldn’t proceed as hoped at that stage. Instead, we needed to seek a license from the SEC. At the time, they hadn’t established any regulations specific to our type of model; there wasn’t an appropriate regulatory framework in place. The nearest thing mentioned was the crowdfunding rules, which were still being developed. Consequently, we were advised to wait until these guidelines were finalized before proceeding further.
Upon hearing this news, we felt enthusiastic as we believed it would only take a few months. However, instead of months, it stretched over one year after another, totaling roughly four plus lengthy years, all due to the wait for the regulatory structure. Finally, these guidelines were implemented last year.
During this period, we continued to cover expenses, maintain a minimal workforce, and keep up with all operational costs; unfortunately, all our resources were depleted. Despite knowing the chances of success were high, we persisted in strengthening our brand. We consistently made sound decisions and worked effectively, which eventually led us to establish a strong rapport with the regulatory body, specifically the SEC.
At present, we lack full licensing, though our application process has reached an advanced phase. It turns out to be a fortunate turn of events that what began as solving issues for small enterprises led us right back into confronting those very challenges again.
Even now, our liquidity isn’t what it was at the start, yet one fact remains clear: we’ve established the framework needed to attract investors and welcome others aboard. Our board is exceptionally robust.
We place significant importance on corporate governance. Despite having only our original seven shareholders, we are actively engaging with a few individuals who could be considered angel investors.
We recognize that we are appealing at this point, even though our revenues aren’t where we want them to be. Despite this, we’ve shown resilience, navigated the tough times effectively, maintained accurate records, submitted all necessary statutory filings, and kept positive relationships with organizations like SSNIT, GRA, and Tier 2 for the benefit of our staff.
Therefore, it’s a narrative we feel ought to be shared, enabling the business sector – particularly individuals considering ventures or those just starting their enterprises – to draw motivation from it.
Indeed, the path of entrepreneurship is far from easy; nonetheless, if you diligently perform all the necessary steps, regardless of how lengthy the process may be, you will ultimately reach the objectives that your organization has established for itself.
Our mission and vision remain unwavering; we never strayed from them. Despite the challenges ahead, we understood that perseverance was essential.
Samuel: What primarily motivated you and your team? How did you gain the belief that enabled you to remain committed, even when faced with difficulties, and decide to continue pursuing your vision?
Wisdom:
To start with, as previously stated, a single factor propelled us into this venture. Our approach focuses on preparing small enterprises for investment and showcasing their potential to attract essential funding from various investors.
The primary objective is to boost employment and generate wealth by supporting profitable Micro, Small, and Medium Enterprises (MSMEs). One major challenge faced by startups, small enterprises, and novice business owners is securing funding. Our aim is to make capital more accessible to pioneering startups, with particular emphasis on those led by women and young people.
Our approach doesn’t necessitate all the requirements traditionally imposed by established institutions. Instead, we dive in, get our hands dirty, and truly grasp your needs before working alongside you to achieve them.
Since that issue persists, we can confirm that our solution stays pertinent and our methodology is sound. Our objective is merely to help narrow the financing gap for startups and small enterprises within this sector.
Samuel: What measures have you taken to keep up with bill payments and other expenses for your business?
Wisdom:
Although it hasn’t been an easy journey, we have shifted focus towards several business support services like our small business valuation offerings.
To maintain our financial stability, we’ve acquired several subsidiary companies as easy wins. One such company offers cleaning services. Additionally, we own a brand focused on restaurant services. Along with these acquisitions and periodic investments from shareholders, we’ve been able to cover our expenses up until now.
Samuel: In what ways do you differ from a venture capital company?
Wisdom:
The primary distinction lies in the scale. When discussing venture capital firms, we tend to categorize them within the conventional sector, which represents a classic approach to financing small enterprises and startups.
Nevertheless, we prefer to describe our approach as alternative investing/alternative financing. This means we recognize that only a limited number of enterprises within our framework can fulfill their needs effectively. Therefore, we offer a simplified variant of venture capital focused primarily on fostering collaborative relationships.
For example, an individual might aim to establish a venture requiring an infusion of GHC 1 million, but they possess just 35% of this amount. In such a scenario, there could be ten others willing to contribute the rest of the funds. These individuals might opt to become co-founders with active roles or remain passive investors. Our company offers two primary services: equity partnerships and investment-based crowdfunding solutions.
The equity partnership focuses entirely on collaboration. It involves individuals joining forces and combining their assets to fund either an established or a start-up enterprise.
In our region, since partnerships often fail to succeed, we act as intermediaries. This way, when we bring people together, we ensure they aren’t left to manage on their own.
Our main objective is to ensure that all interests are safeguarded. Therefore, while viewing this as an investment chance for a sustainable enterprise, we also aim to collaborate closely with each participant as if they were owners of the business itself. We prioritize your interests above everything else, which aligns perfectly with our role as intermediaries.
In the realm of investment crowdfunding, the process mirrors stock exchange activities more closely than those involving venture capital. Essentially, with investment crowdfunding, an established business looking to raise funds will issue securities, which can take the form of either debt or equity. These offerings are subsequently highlighted on our platform so that potential investors who show interest can purchase these securities, whether they involve debts or equities.
Our services resemble a small-scale stock exchange combined with venture capital activities. As intermediaries, our role is to safeguard everyone involved, particularly those who remain behind-the-scenes. Notably, we offer both long-term and short-term partnership options.
For short-term engagements, these are purely profit-sharing agreements, hence no equity ownership is included. In contrast, the long-term arrangement does involve equity participation. A shared characteristic we have with venture capital firms is our focus on supporting start-up enterprises at an early stage.
Samuel: Could you share your aspirations for the coming decade?
Wisdom:
Our aim is to create a strong brand and maintain a high degree of consistency when delivering our services. At the same time, we strive for agility in adapting to shifting market conditions and technological advancements.
To serve a wider spectrum of the ecosystem, we may add differentiated service offerings typical of traditional institutions. Both equity partnership and investment crowdfunding currently fall under alternatives. They are currently not the mainstream start-up fundraising institutions.
This is due to businesses operating at various phases; thus, the capital source varies significantly based on the specific phase of the business. Given where we stand now, our enterprise might not meet the criteria for venture capital or private equity funding.
Nonetheless, growth will ultimately lead us to expand our scope so that we can handle both minor and major issues. We will certainly build upon what we are presently undertaking.
Samuel: What insights do you wish to impart to those considering entering your field? Which experiences have best prepared you for success in this sector?
Wisdom:
Entrepreneurship has always run through my veins. From an early age, I was surrounded by my parents who were operating their own small enterprises. Despite receiving education as a civil engineer, I eventually shifted focus towards the construction industry from a business perspective. Primarily, our motivation stemmed from the desire to address a significant gap faced by many young individuals stepping into the world of startups.
Although my educational background might not indicate this, over the past 25 years since finishing school, I’ve gained extensive experience through work. This involved observing various small enterprises and even launching a few myself. Some ventures were successful, while others didn’t pan out as we hoped.
We think this provides an excellent foundation for mentoring newcomers to the field. If you examine the offerings of Propartners Exchange Limited, you’ll see that we cater to two types of ‘clients’: equity partners/investors on one side and businesses/start-ups/entrepreneurs on the opposite side.
When looking at the perspective of investors, one of the main benefits we highlight to individuals during our discussions is that they typically have the option to invest their funds in Treasury bills. Nevertheless, does this arrangement make you feel like you’re having as significant an impact?
When the government uses your funds and you witness those resources being mismanaged by public officials, does it make you feel ineffective? Contrast this experience with supporting a local enterprise through investment.
Wouldn’t that feel far more satisfying than simply putting your funds into an investment vehicle whose purpose remains unclear? It’s these motivations that push us forward with what we’re doing. We think that as each of us plays our part—and similarly, others within this field contribute—we can inspire a new generation of youth to embrace entrepreneurship.
I think this move will benefit the economy and help reduce unemployment issues. Our objective isn’t merely to turn a profit. Capital is essential for companies to achieve profitability.
We’ve encountered far too many individuals who view running a business as nothing more than earning some quick money, disregarding ethics—cheating and stealing become acceptable practices for them. Our advice to these folks is to refrain from pursuing entrepreneurship. The gap between being an entrepreneur and simply operating a business is vast.
For someone in business, virtually anything is permissible. But that isn’t true entrepreneurship. Upon embarking on an entrepreneurial journey, the essential qualities you require are patience and resilience. Eventually, you’ll discover that profits do not accumulate rapidly, particularly when aiming to create genuine value.
This episode was adapted from an interview with Wisdom Anku. The author is an experienced writer specializing in
s
He excels at sharing tales of African enterprises and their proprietors. You can contact him through
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