Thesis: Investing in African entrepreneurs solving mass-market problems with a gender equity lens
Fund size: $16 million
Companies funded to date: 16
How she’s making the world a better place: Believing in the best founders in her home continent and making sure female founders get 50% of the opportunities to build companies as the men.
Joyce-Ann Wainaina’s journey to becoming a VC looks intentional in the rearview mirror, but in actuality, it was anything but.
She was a highly successful investment banker in Nairobi, Kenya, with two adult daughters successfully launched into their careers. She could have gone on that way forever.
So what changed? She started angel investing.
At first, she admits it may have been out of a sense of obligation or guilt. She had been fortunate enough to go to college in the United States and find a path that included living in her native country and also having a Western-style, lucrative career. But Wainaina has never been one to succeed and pull up the ladder behind her.
She wanted to give something more to her country, and she knew entrepreneurs– not bankers– were the ones really building the future. She invested in them– making sure 50% of her deals went to women– for seven years.
Over that time, she fell out of love with banking and fell in love with helping startups. But it was her daughters who came to her and suggested she become a venture capitalist, with a real institutional fund.
“What you’re doing with all of this angel investing is really important,” they said to her. “Why don’t you consider putting a structure together, and we’ll help?”
Before that, it had never once occurred to Wainaina to become a VC. She didn’t know where to start, but got a fortuitous email forwarded to her mentioning a VC Lab event.
That’s when it all started to click, and something that seemed huge and unknown and unattainable at one moment became an oversubscribed fund with major limited partners like The MasterCard Foundation and The Michael and Susan Dell Foundation, just two years later.
“You know what they say, ‘When a student is ready, a teacher appears,” she says. “I didn’t hear about VC Lab from anyone. I didn’t know about it from anyone at the time. I just happened to get a link to it in an email. The cohort was starting at the exact same time, and I was like: ‘Something wants me to do this.’”
Her fund, Chui Ventures, is a pan-African seed-stage fund with a gender-equity focus, backing startups that build mass-market companies. These were the same kinds of businesses she had backed successfully for seven years as an angel investor, too. 50% of her investments go to female founders; 100% go to African founders.
We asked her how she would have wound up as a VC if she hadn’t gotten that email. Because clearly, Wainaina was destined to be a VC whether she always realized it or not.
“I don’t know,” she says. “I was done with banking. I may have gone into a fund of funds or private equity. I knew I had this calling, and I had to answer it. I’m very glad I started the fund, but I didn’t realize it would be this much hard work. If I’d known, maybe I would have joined a larger fund and been a partner. But now we will be that bigger fund, and we’ll hire partners.”
Hard work, but doable
While Wainaina knew a lot about finance and startup investing already, she didn’t know where to start when it came to structuring an institutional fund. VC Lab was invaluable. It taught her the basics quickly and helped prioritize where to spend your time and where not to waste your time.
She originally capped her fundsize at $10 million, and it was hard going at first. The biggest “a ha!” moment from the VC Lab program was the encouragement to tap her own network, and to tap them early on, before there was a clear ask for money. To ask their feedback on the thesis and to involve them in the process.
“I probably wouldn’t have gone to people I knew initially,” she says. “But soon I was looking up old university friends from the US and African business contacts and saying, ‘This is what I’m building, how does this sound to you?’ I was able to do our first close, and out of the high net worth individuals 60% of them were African women. Several of them were my golf buddies. I’m a lousy golfer, but it really works for business.”
Wainaina’s success is all the more impressive because she had a unique disadvantage compared to her mostly Western cohort. Most of her African network wasn’t investing in venture capital funds already. So it wasn’t as simple as just having a great thesis and a deck. She had to educate people on the asset class itself as well.
Three months in, she met with the MasterCard Foundation. They were starting a fund of funds for African emerging managers, focusing on supporting entrepreneurs with a gender balanced focus. Wainaina’s jaw could have hit the floor when she heard this.
“Who would have thought?” she says. “You can’t make this stuff up, right?”
She met 70% of their investment criteria– the most anyone had to date. Lucky, for sure. But she had grabbed the opportunity and spent seven years angel investing to put herself in the position to grab this luck.
After MasterCard, she added three family offices, some more high-net-worth individuals, the Michael & Susan Dell Foundation, and just two years after beginning the entire journey ended with a 60% oversubscribed $16 million fund one.
“I make it sound easy, but to get 35 LPs, I took about 500 rejections,” she says. “So you have to keep sending stuff, and the most important thing is not to take it too hard. It’s not personal. It’s just that people aren’t ready for you, or your idea is one whose time has not yet come.”
80% of the high-net-worth individuals who wound up investing in her fund had never invested in the asset class.
What Joyce-Ann Wainaina Got from Decile Group
Wainaina describes the VC Lab experience as drinking from a firehose. It’s a lot of information coming at you fast, and if you don’t keep up and do all of the assignments, you get weeded out quickly. It’s not a learning program; it’s a doing program.
She remembers one crucial piece of advice she got from Mike Suprovici at Decile Group on a pitch. It was deep into an exhausting process, which she describes as drinking from a firehose, while also teaching a course at Yale. (No small thing!) It was late one evening, and she was practicing her pitch– again– talking about all the reasons it was so challenging to invest in Africa, the advantages she would have, and he interrupted her.
“No, you need to change the message,” he said. “You keep telling me why it’s so hard, why there’s not enough capital flowing into the continent, you need to tell me about the opportunity!”
“I remember that changed our deck completely, and it resonated with LPs out there,” she says. “We had a way heavier burden because we also had to pitch, and we had to educate at the same time.”
A Continental-sized Impact
A heavier burden, yes, but way more impact. That nudge from her daughters not only led to Wainaina embarking on an entirely new career, but through her massive global foundations, family offices, and high net worth individuals who had never considered investing in venture capital were all investing in the future of the continent.
These limited partners might not have invested in African entrepreneurs if they hadn’t been pitched by someone with the track record and skills of Wainaina.
That is the difference between giving back as an angel and giving back as a VC: More money, more partners, more longevity, and way greater impact.
The Decile Group develops industry-leading offerings to transform venture capital into an ethical force for good in the world, including VC Lab, Decile Hub, Decile Partners and Decile Capital.
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