Essential 7 KPIs and Target Figures for Evaluating Private Placements in Nigeria
By George NWOGU | BIZVILLE PROJECT MANAGEMENT Limited
Dear Industry Colleagues and Partners,
Image By #GeorgeNWOGU
The first time I encountered private placements was through a friend at FUTO. While studying Robert Kiyosaki’s book, I considered it pre-IPO investments. My friend clarified it as “Private Placement.”
As I prepare to invest millions and aim to join the Dragons’ Den (In the Immediate Future LOL), I must ensure that companies seeking investment meet specific criteria.
Though I, #GeorgeNWOGU, had to prompt for this detailed information, understanding these KPIs and target figures is crucial. Here are the 7 essential KPIs companies should demonstrate to attract investment in Nigeria.
Leading Indicators (Predict future performance)
1. Investment Return Metrics:
- IRR: Aim for an IRR of 15% to 25% (Investopedia).
- ROI: Target a 2x to 3x ROI. For example, a ₦10 million investment should return ₦20 million to ₦30 million (Investopedia).
2. Fundraising Success:
- Capital Raised: Raise 80% to 100% of the target amount. For a ₦100 million target, aim for ₦80 million to ₦100 million (CB Insights).
- Investor Participation: Attract 5–10 investors to ensure a diverse base (Harvard Business Review)
3. Valuation Metrics:
- Pre-Money Valuation: Align with industry standards, typically ₦500 million to ₦1 billion for early-stage companies (Crunchbase).
- Post-Money Valuation: Manage equity dilution effectively. With a ₦1 billion pre-money valuation and a ₦200 million raise, the post-money valuation should be ₦1.2 billion (TechCrunch).
4. Investor Profile:
- Credibility: Engage reputable investors with a track record of investing over ₦50 million (AngelList).
- Investment Size: Aim for individual investments of at least ₦10 million (Forbes).
5. Compliance and Regulatory Metrics:
- Regulatory Adherence: Ensure full compliance with Nigerian SEC regulations (Nigerian SEC).
- Documentation: Have complete and accurate legal and compliance documents (Deloitte).
Lagging Indicators (Reflect past performance)
6. Business Performance Metrics:
- Revenue Growth: Achieve 20% to 30% annual revenue growth. For instance, if current revenue is ₦50 million, aim for ₦60 million to ₦65 million (McKinsey).
- Profitability: Show positive EBITDA or a clear path to profitability within 2–3 years (Investopedia).
7. Investment Horizon and Liquidity:
- Investment Horizon: Define a 3–5 year horizon for early-stage or 5–7 years for later-stage investments (Private Equity International).
- Liquidity: Present clear exit strategies or liquidity events, such as acquisitions or IPOs, within 5–7 years (Harvard Business Review).
By meeting these 7 KPIs, companies will be well-positioned to attract significant investment. This approach reflects the rigorous evaluation process I will apply as I prepare for substantial investments in the future.
COO, BIZVILLE PROJECT MANAGEMENT Limited
#PrivatePlacements #InvestmentCriteria #LeadingIndicators #LaggingIndicators #InvestmentMetrics #Valuation #InvestorProfile #RegulatoryCompliance #BusinessPerformance #DragonsDen #GeorgeNWOGU #BIZVILLEPM 🌐🚀
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