Expert interview: Co-founder of South African VC firm Manuel Koser shares top tips for building a great startup

Manuel Koser is the co-founder and managing director of Silvertree Holdings, a South African-based VC firm that focuses on “company builder and venture investor” in African startups.

August 21, 2020

Manuel Koser is the co-founder and managing director of Silvertree Holdings, a South African-based VC firm that focuses on “company builder and venture investor” in African startups.

Before co-founding Silvertree Holdings, Koser co-founded and served as co-CEO of Zando, one of the five top consumer e-commerce sites in South Africa. He is also one of the guys who helped with the launch of Jumia in Nigeria which, today, has become the largest online retailer in Africa.

In his interview with Business Insider Africa (BI Africa), Koser discusses the rationale behind his firm’s investment strategy and candidly shares his views on what makes a good founder, the biggest indicator of failure for a startup and so much more.

BI Africa: Can you tell us a little bit about how you became interested in startups and investing in them?

Koser: I moved to South Africa to start Zando, which is now Jumia group listed on the New York Stock Exchange, and caught the entrepreneurial bug in the consumer internet and brand space. Since then we built up Silvertree with the mission to support South African entrepreneurs to scale their businesses locally and internationally.

BI Africa: How exactly is Silvertree Holdings helping startups to grow?

Koser: Silvertree is the first African brand builder. We are focusing on digital-first, mission-driven brands in categories good for you and good for the planet, craft, artisanal. We are based in Cape Town with 450 staff. Our power brands are the organic retailer - Faithful to Nature, craft food brand - UCOOK, and natural skincare brand SKOON.

BI Africa: What type of startups do you invest in, and what do you look out for in these startups?

Koser: We focus on consumer brands and consumer internet companies in Africa. We look for strong revenue growth (>50%), good margins (>50%), and good net operating cycle on top of a strong and well-incentivized management/founding team.

BI Africa: What separates Silvertree Holdings from other competitors in the area?

Koser: We have a dedicated 25 people team to support our brands and business from everything from finance, legal, marketing, and so on. Additionally, we provide patient capital and are not looking to exit or raise capital. We are in for the long-term and have deep experience in Africa in how to build strong #1 brands and marry this we deep experience in tech.

BI Africa: What makes a good founder?

Koser: Tenacious, passionate, and driven by a cause rather than just money or status.

BI Africa: Is there any one piece of advice you would give founders that you think doesn’t get shared enough?

Koser: Raising your price will define if you have a stick product that is clearly differentiated from the competition. Price is the best proof point for this.

BI Africa: What do you think is the biggest indicator of failure for a startup?

Koser: Bad customer feedback/lack of customer love for what you do.

BI Africa: Would you be more likely to fund a very experienced team with a mediocre idea or a team of novices with an amazing idea?

Koser: General ideas are not worth much to me. They are ideas, what matters is execution and that can be seen in numbers and customer feedback. So I would look for the better and more passionate team. Your CV or experience is no indicator of success. We have backed entrepreneurs with “terrible” CVs and they turned out to be incredible entrepreneurs and we backed perfect CVs with great experience and they turned out to be terrible entrepreneurs.

BI Africa: What entrepreneurial achievement are you most proud of?

Koser: With Peter and Paul building a sustainable and resilient business that employs 450 people with a strong entrepreneurial culture spearheading the future of e-commerce and consumer brands in Africa.

BI Africa: What trends do you see coming in the venture capital investment landscape post COVID-19?

Koser: People will be more home centric so every solution that caters to this will get some tailwind. COVID-19 is a catalyst for trends that were already happening and just accelerate these. So video content (gym at home, cooking) to e-commerce solutions (health, groceries, etc) will all get a big boost. Similar work from home will change how we eat, what we wear significantly. Generally, a big shift in time (less commuting, less time in office) will be followed by an immediate change in purchase behavior (less lunch in restaurants, less spending on cars, etc).