‘Internet’ is likely one of the world’s most popular terms as a word, a tool, and a concept. But its  counterparts,  ‘extranet’ and ’intranet’, are less popular. But for those familiar with all three terms, they know that internet, extranet, and intranet are often used interchangeably. However, they differ from each other in terms of their scope and usage. Today, we will break down the meanings of these terms in a simple and easy-to-understand manner.

Internet

The internet is a global network that connects computers and other devices around the world. It is a vast, decentralized system that allows people to share information, communicate with each other, and conduct business on a global scale. The internet is an open platform that allows anyone to create and publish content, and anyone with an internet connection can access that content.

The internet is built on a set of protocols known as TCP/IP (Transmission Control Protocol/Internet Protocol). These protocols define how data is transmitted over the internet, and how different devices on the network communicate with each other.

The internet has revolutionized the way we communicate, access information, and conduct business. It has made it possible for people to connect with each other across vast distances and has given rise to new forms of entertainment, education, and social interaction.

Extranet

An extranet is a private network that is accessible to authorized users outside of an organization’s internal network. It is a secure and controlled platform that allows organizations to share information, collaborate with partners and suppliers, and conduct business transactions.

Extranets are usually built using the same technology as the internet, but they are protected by firewalls and other security measures to ensure that only authorized users can access them. This makes extranets an effective way for organizations to extend their internal network to trusted partners and suppliers without exposing sensitive information to the public.

Extranets are often used in industries such as finance, healthcare, and manufacturing, where secure communication and collaboration with external partners are critical.

Intranet

An intranet is a private computer network that is used exclusively by an organization or company to share information and resources among its employees. It is essentially a closed version of the internet that is accessible only to authorized users within the organization.

An intranet is typically designed to facilitate internal communication and collaboration within an organization. It may include features such as email, instant messaging, discussion forums, file sharing, and document management systems. These tools allow employees to communicate with each other, share ideas, and work together on projects, even if they are in different locations or departments.

In addition to communication and collaboration tools, an intranet may also provide access to internal company resources such as databases, software applications, and other digital assets. This can help employees quickly find the information they need to do their jobs more effectively and efficiently.

One of the key benefits of an intranet is that it provides a secure and controlled environment for sharing information within an organization. Because access is restricted to authorized users, there is less risk of confidential or sensitive information being leaked to outsiders. In addition, the use of an intranet can help ensure that employees are following company policies and procedures when it comes to sharing and accessing information.

Overall, an intranet is an important tool for any organization that values communication, collaboration, and efficiency. By providing a secure and controlled platform for sharing information and resources, it can help employees work together more effectively and make better use of their time and skills.

Final thoughts

The internet, extranet, and intranet are all essential components of modern-day communication and information sharing. The internet connects people across the globe, enabling them to exchange information and ideas on a vast scale. Extranets are a secure extension of an organization’s internal network, which allows external parties, such as partners and customers, to access specific information or applications. On the other hand, intranets provide a secure network for an organization’s internal communication and information sharing. They allow employees to access shared resources, collaborate, and stay updated on company news and events. Each of these networks plays a crucial role in facilitating communication and information sharing, and their proper use can significantly improve productivity and efficiency within organizations. As technology continues to evolve, it is essential to understand the differences between these networks and their applications to make the most of them.

Software engineering roles are popular for a couple of reasons. First, in the past decade, these roles have consistently topped the lists of most in-demand tech roles. Secondly, many engineering roles often come with high salaries. According to Glassdoor—which analysed over 123,000 salaries—the average annual pay of most experienced engineers on the continent is $86,000.

Why do these roles pay so much? Well, its because tech products and services are built by tech engineers who spend a great deal of time developing these apps using programming languages. From Fawry and Autochek, to Jumia and Chipper Cash, or even Uber, building interactive products involves hiring competent frontend, backend, cloud, DevOps, and full-stack developers.  

But what do these terms mean? Are frontend and backend engineers doing the same job? What exactly do cloud engineers do? Why does DevOps engineering sound like a US armed forces intervention in Liberia?

In this explainer, we’ll break down these engineering roles to their barest form, and show you that software engineers are more than dreadlocks and triple-monitor setups. 

1. Frontend v backend engineers

The difference between frontend and backend engineers lies in the names of these roles. 

Frontend engineers basically work on the front aspect of a website or an app. They develop the visual aspects—pages, menus, buttons, links, and graphics—that you see, use, and click. The way the TechCabal website looks, the dark/light feature, pages, the menu button, and all the parts you can see on any app or website are developed by frontend engineers. They determine how things look. 

Now backend engineers connect the dots at the back end of things. Backend engineers use code to connect servers, applications, and databases that deliver information to users. Backend developers determine how things work. 

Here’s a quick example: When you visit Jumia and browse through the different products, you’re interacting with the work of a frontend engineer. But when you order a product, enter your address, and pay, you’re interacting with the work of a backend engineer. 

While both roles are necessary to bring apps and websites to life, they both involve different programming languages. Frontend engineers design visual elements with programming languages like HTML, CSS, and JavaScript while backend engineers use Java, C++, Ruby on Rails, and Python. 

There are over 9,000 programming languages in existence, and software engineers often have to learn as many as they can if they want to keep growing. 

2. Full-stack engineers

Now that you know what backend and frontend engineers do, understanding full-stack engineers should be a bit easier. 

A full-stack engineer is one who is proficient in both front and backend engineering. They can use HTML or CSS to design the visual elements of a page, and they can use backend languages to create applications, web services, and APIs. Full-stack engineers determine how things look and work. They’re basically the full package. 

3. Cloud engineers

To understand what cloud engineers do, you should understand what the cloud is in the first place. 

Clouds are storage systems where your files, websites, apps, movies, and games are hosted. With the internet, you can access the cloud and store or use the data there. Google Drive, Netflix, and YouTube Music are all great examples of cloud technology. 

Cloud engineers make this possible. A cloud engineer is one who builds and maintains the infrastructure that allows people to store and retrieve files remotely. Cloud engineers are typically hired to deploy or scale up new and existing cloud resources. 

As Microsoft cloud engineer Adora Nwodo explained in this interview with TechCabal, “Cloud engineers literally do their engineering on the cloud, whether software engineering or DevOps engineering.”

They design, plan, and manage cloud technology. There are a few roles involved in cloud engineering including cloud architect, cloud software engineer, cloud security engineer, cloud systems engineer, and cloud network engineer. 

4. DevOps engineers

Contrary to their very cool role name, DevOps engineers aren’t actually from outer space. 

DevOps is an abbreviation of the words “development” and “operations” which is what these engineers oversee. 

Unlike all the other roles listed here, DevOps engineers do more than just write code. They oversee the creation, development, and updates of software created or used by any company. Simply put, DevOps engineers are the product managers of the engineering team. 

They are proficient in writing code, but they’re also in charge of making sure that the software other engineers on their team create is in working capacity. Teams might have frontend and backend engineers building the software, but the DevOps engineer executes the whole building process instead, managing each and everyone’s roles.

5. Software engineering v software development 

Now, it’s important to note that there’s a notable difference between “software engineers” and “software developers”. 

According to Omeiza Owuda, a software engineer with 7 years of experience as a full-stack developer, “There’s a thin line between both of them.”

Software engineers build tools from scratch while software developers use these tools to develop applications and other software. For example, software engineers build code editing tools like Atom or Notepad++ while software developers use these tools to develop applications or other software. 

Another example is programming languages. Software engineers are the brains behind creating the different programming languages we have today, and software developers, in turn, use these languages to create new software. Both roles use code to create software, but software engineers often operate on a larger scale. 

If you’re looking to enter tech as a software engineer, then you should consider any of the roles above. Oftentimes, companies might advertise the roles differently, especially when they require engineers who can use specific programming languages or build apps on specific systems. 

You may see openings like mobile engineer, android developer, or node.js developer; all these are software engineering roles, but they’re specialised. Regardless of the role though, software engineers are the builders of the tech industry, creating everything from games and payments systems, to NFTs and cryptocurrencies that push the world further into a digital age. 

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But what do they mean? Are these just made up words similar to deliverables, huddle and COB? 

Well, the latter might be, but the abbreviations aren’t. The words refer to augmented reality (AR), mixed reality (MR), virtual reality (VR), and extended reality (XR); and they’re all terms used to describe real and/or virtual environments or interactions generated by tech. What’s more, you’ve probably used one of these concepts more times than you realise!

In this explainer, we’ll break down these 4 tech terms and give realistic and relatable examples so you too can have something—other than money—to throw around.

1. Cloud

Before we get into the multiverse of realities, let’s explain a term you’ll see repeatedly throughout this article: the cloud.

Yeah, it’s not the white fluffs of condensation that shapeshift faster than a tech bro’s dreadlocked hair. We’re talking about the storage system where your files, websites, apps, and games are hosted.  

Chances are that you’ve got some photos, videos, or documents stored away somewhere on Google Drive, iCloud, Dropbox, or any other cloud storage device. 

Cloud storage is similar to hardware storage (the use of hard drives and USB devices to store files). The only difference is that the internet allows you to access cloud storage from anywhere, and without any special software or hardware. Instead of being stored on your phone, computer, or hardware, when you upload to the cloud, it’s stored on your providers’ computer servers and storage devices. 

So, is there a warehouse somewhere with multiple storage devices? Yes, yes there is. Apple, Google, Meta, and many other software companies have large data centres where computer servers and storage devices are housed. 

Simply put, the cloud you store your files on, is on someone else’s computer. Cloud storage has physical locations, and they can be subject to the same physical threats that your computers face. 

Now that we know what the cloud is, we can talk about the new realities ingenious people are building on it. 

Let’s start with augmented reality (AR). 

2. Augmented reality (AR)

Generally speaking, you should think of AR as digital make-up. Digital make-up for what, you ask? Well, digital make-up for everything, from physical environments to people. 

AR employs digital visual, audio, and sensory elements to enhance the appearance of something in the physical world and provide real-life interaction. Using filters and artificial intelligence, AR literally brings things to life and makes you see things that aren’t really there using your camera and audio. 

The most popular example of AR is the video game Pokemon Go, where players could use GPS to search different real-life locations for characters called Pokemon. Another example is Google Search’s 3D function, which lets you see how animals would look if they were right in your living space. Using the feature, you can search for the word lion and see how big a lion is standing next to your TV. 

Even better examples lie in Instagram, Snapchat, and TikTok filters. Yup, all those filters that show you what you would look like with a beard, distort your voice, and turn you into Disney princesses are all part of augmented reality. 

AR also has applications in the e-commerce and healthtech world that make shopping easier for everyone involved. In e-commerce, stores can show you what shoes, caps, shirts, or even glasses would look like on you using filters. Nike uses AR to confirm your shoe size and can also show you what you would look like in the shoes you’re shopping for. Furniture stores like Ikea and Home Depot can show you what the furniture you’re shopping for would look like in your living areas. 

In Africa, there are a few startups creating products that implement AR. There’s GESAL, a Nigerian edtech helping students visualise learning by providing 3D imagery of diagrams in their textbooks. There’s also Augmented Startups, a South African software development service teaching people how to use and implement AR.

3. Virtual reality (VR)

Virtual Reality (VR) is the use of computers to create interactive 3-dimensional (3D) environments. 

Unlike AR, VR doesn’t depend on the physical environment to create interactive spaces. Instead, it fully immerses you in environments where everything, from sight to sound to touch, is digitally created and manipulated. 

Where AR will show you what a lion looks like in your living room, VR creates a virtual forest where you can see a computer-generated lion that roars and purrs. 

VRs are customisable environments that computers create using code. In VR spaces, you can make the sky purple or animate people with different designs. 

If you’re an anime fan, VR is the world of Sword Art Online, or The Rising of the Shield Hero. If you’re a movie fan, classics Jumanji and Zathura represent VR well. 

VR is most popular in games where users wear headsets and are transported to worlds where they’re anything from building blocks to ogres. For example, Meta—the parent company of Facebook, WhatsApp, and Instagram—created a virtual reality world called Horizons where anyone can curate social experiences, from parties to puzzles.

On the continent, VR experiences are bountiful in hospitality, tourism, and art. The 2021 edition of Art X, an annual art festival in Lagos, Nigeria, featured VR experiences that showcased designs and photos. 

There’s also DOBIISON, a Ghanaian startup that provides VR experiences for everything from real estate to tourism. The startup offers users free tours of popular Ghanaian tourist attractions like the Cape Coast Castle where captives were held during the Transatlantic Slave Trade. 

Another difference between AR and VR is that the latter often depends on the use of special hardware or software such as VR goggles or controller pads. AR, on the other hand, doesn’t require any special equipment. 

4. Mixed reality (MR)

Like the name suggests, mixed reality (MR) encompasses experiences that use both virtual and augmented realities. 

It’s the rice-and-beans of realities. VR and AR are extremes. VR is independent of the physical world;  AR  is not. MR combines both concepts. 

Mixed reality merges the real and virtual world to create unique experiences where digital and real objects coexist. Sounds a lot like AR, right? Yes, it does. In fact, a lot of people consider MR as another name for AR because they both mix the real and the digital. 

In fact, the social media filters we mentioned above are great examples of mixed realities because they, in fact, augment reality and let you see digital objects in the real world. 

A unique feature of mixed reality, however, is that MR features allow you to interact with the virtual/digital world. So Instagram filters that activate when you make a gesture, or even Zoom reactions that allow you to use emojis with certain hand gestures are all considered MR.  

5. Extended reality (XR)

If the first question on your mind about extended reality (XR) isn’t “Why isn’t the abbreviation ER?” then you’ve been taking life too seriously. 

Anyway, ER XR is the pool from which we define AR, MR, and VR and RR (real reality), which is where Mark Zuckerberg wants to escape to as part of his adventures in the metaverse. 

Extended reality is the combination of all environments, real or digital; man-made, natural, or computer-generated. 

When a company offers AR, VR, and MR solutions, they’re usually called an Extended Reality company because they offer solutions that extend beyond the present reality into other realities. 

A great example of such a company is Imisi 3D, a Nigeria-based creation lab that’s growing a community of African AR/VR creators, creating solutions using AR/VR, and providing educational and engagement experiences with AR/VR. One of its projects helps Nigerian students learn maths using VR goggles.

That’s everything you need to know about AR, MR, VR, and XR. If you enjoyed this article, please share it with your networks on WhatsApp, Twitter, Facebook, and LinkedIn so that your friends can learn new intimidating concepts! 

“[Insert startup name] has announced the close [insert millions of dollars in raise] of a pre-seed/seed/Series A round led by Venture Capital/Private Equity/Angel Investor firm…”

Startup funding across Africa has grown by at least 600% since 2017. In 2021, African startups raised more than $4 billion, tripling the $1.43 billion raised in 2020. This total funding was made across 600+ funding deals. This means that funding announcements like the excerpt above—in differing variations—were published on media platforms over 600 times. It also means that you’ve seen those words over and over again, and you’ll definitely be seeing more in 2022, where startups have already raised over $1 billion across 130 funding deals. 

But what do these terms mean? What’s the difference between a Series A round and a Series D round? Who is an angel investor and what do they do? How does debt financing differ from equity financing?

In this guide, we’ll break down these funding terms across three categories: the fund types, the funders, and the funding stages.

The funding types

There are 2 major ways startups can get investors to fund them. There’s equity financing and debt financing. 

1. Equity Financing

In equity financing, the startup offers investors a chunk of ownership in the startup in exchange for funds. The investor is paying to own a part of the startup, which means that he also owns a share of the profits when the time comes. 

Think of it equity financing this way: The startup is a piece of farmland and needs money to buy seeds and farming equipment. In exchange for money, it offers an investor a small portion of the land and during the harvest, the investor gets whatever was planted on his portion of the land. 

Startups can sell as much of their equity as they want to. 

In equity financing, there’s no obligation for the startup to pay investors back because it’s technically a trade, and the investors are buying ownership. Thus, if the startup fails or makes no profit, the investors get nothing.

Startups can also buy back the ownership shares from the investor and this is called repurchasing or the repurchase option. Investors can also resell their shares to other investors which is one of the ways investors can exit a startup. 

Startups can also sell the rest of their equity shares to investors and this is called an exit. In an exit, the startup’s founders are basically selling their shares or ownership stakes in the company to other investors or companies who then acquire the startup. 

2. Debt financing

In debt financing, there’s no exchange of money for shares or equity. 

Instead, the startup collects loans i.e. gets investors to invest in exchange for a return on the capital, and a pre-agreed interest rate. 

Continuing with our farmland analogy, rather than paying for a portion of the farm, investors give the farm holders money on the condition that the farm holders pay back what they owe and an agreed-upon interest. 

The investors’ profit is not tied to how many shares they have, but how much they agreed on with the startups. In debt financing, there is an obligation for startups to repay; if a startup is unable to pay, whatever collateral they put down will be claimed by the investors. 

3. Other types of financing

There are a few other types of financing investors and startups may consider. 

First, there’s Hybrid financing which is where both debt and equity financing are combined. Last year, MFS Africa raised $100 million with $70 million as equity financing and $30 million as debt financing. 

There’s Mezzanine financing—or convertible debt or note—which allows investors to convert their debt financing into equity financing in the event a startup defaults on its debts. 

Finally, there’s Bootstrapping which means the startup finances itself through capital laid down by the founders, donations from family and friends, and/or rolled over profits. Many startups start out with bootstrapping.

The funders

Now that we’ve explored the different ways to finance a startup or a company, let’s talk about the different types of people behind the “investor” tags and why they’re investing. 

1. Angel investors

Angel investors are private individuals who usually finance startups during their early-stage period. They’re everyday people, usually family and friends, who invest in startups usually in exchange for equity or ownership in the company.

Now, the conventional definition of angel investors explains that angels are usually family members or friends but it’s not always so. Angels can be anyone interested in helping startups get their feet off the ground. 

For example, Herconomy, a startup empowering women through financial literacy, raised $600,000 through the community crowdfunding route. 

In Africa, several startup founders who have built successful startups are now venturing into becoming angels and helping other startups actualise their dreams. They include Olugbenga “GB” Agboola (Flutterwave), Odun Eweniyi (Piggyvest), and Shola Akinlade (Paystack).

2. Private equity firms (PE firms)

Private equity firms are coalitions of investors who invest in private companies i.e. companies that aren’t listed on the stock exchange. 

These equity firms use a combination of both debt and equity financing to invest in high growth later-stage or mature companies that are often underperforming. These firms also acquire majority of the equity shares of the startups they invest in, in order to maximise output and growth. An example is Adenia Partners’ majority stake acquisition in Herholdt, a 57-year-old energy company in South Africa. 

Presently, there are about 176 private equity firms in Africa that have made over 940 investments in the past decade alone. Examples are South Africa’s Norrsken22, Senegal’s  WIC Capital and Egypt’s Sigma Capital Holding. 

3. Venture capital firms/Venture capitalists (VCs)

Now, Venture Capital firms or VC firms are a subset of Private Equity. 

Unlike PE firms though, VCs invest in younger and smaller businesses. It’s also a coalition of investors who finance smaller businesses and startups with equity and/or debt financing. VCs also acquire lesser shares or minority stakes in the startups they invest in. 

Most announcements we see are led by VC firms like Novastar Ventures, Oui Capital, Partech Ventures or Ingressive Capital. There are about 780 VC firms in Africa with over 78,000 investments across the years. 

The funding stages

Finally, here’s where all the seeds we’ve sown in the past paragraphs come into fruition. 

Under this heading, we’ll explore the funding stages that the investors we’ve listed above participate in. 

1. Pre-seed

“Founders typically float a startup with personal funds, before seeking out investments from family, friends or external well-to-do individuals known as angel investors. All of this broadly falls under the pre-seed funding stage,” 

Alexander Onukwe, TechCabal

As the name implies, the pre-seed stage consists of a startup’s first push to raise funds to get its operations running. In this stage, you won’t see many VCs or PEs because the startup is at its earliest stages and the only people willing to take a chance on it are angel investors. 

The sizes of seed stages can vary, depending on the startup. For example, Herconomy’s pre-seed was $600,000 while Nestcoin, a blockchain startup out of Nigeria, raised $6.5 million in its pre-seed round. 

Conventionally, VCs don’t participate in pre-seed rounds but that’s slowly changing on the continent as more early-stage startups bring innovative solutions to the continent’s most pressing issues. 

2. Seed

Seed stages come after the pre-seed stages, and they’re usually when the startup has built enough traction to attract institutional investors like VCs or PE firms.

As in the pre-seed stage, there’s necessarily no maximum or minimum amount for what qualifies as a seed. It all depends on the startup. 

In 2019, however, Palmplay raised the largest seed funding Africa has seen so far with $40 million. 

3. Series A B C D E F to infinity…

Here’s what you need to keep in mind about Series A, B, C… funding stages: the letter of the alphabet attached to a funding round expresses the number of times that a startup has raised external funding. Essentially, the naming helps differentiate each new funding round from the previous ones.

In Series A and B funding, startups have entered their target market but need financing to build relationships with customers and further develop their business models.  

Every round after a Series A is not so different in terms of deal structure. Most startups at these stages are looking to expand into new markets, launch new products or release new features. From Series C upwards, startups are looking to maximise profitability and growth, expand into new markets and push out new products. Of the 8 African unicorns—startups valued over $1 billion—6 attained unicorn status during or after their Series C rounds. 

It is, however, important to note that most African startups don’t make it past the Series B funding stage. The World Economic Forum states that only 8% of startups on the continent make it past Series B and this is due to a number of reasons including lack of funding and operational failure. 

The good news, however, is that more startups are popping up and solving problems acoss board. The number of African startups that have been able to secure funding has increased from 55 startups in 2015 to 359 startups, a 552.73% growth. What this means is an increased chance of solving African problems. 

If you enjoyed this guide, please share it with your network across Telegram, WhatsApp, Twitter, Instagram and Facebook. 

Over the past couple of years, there’s been an influx of words that explain certain tech concepts. Some of them like crypto, or even NFTs, have been around for a while. In fact, NFT—as a word—was first used in 2014 and now, 7 years later, it’s still a concept that escapes a lot of us. Others like DeFi or DAOs are fairly new, but they’re still getting thrown around a lot. 

Whether you’re new or old to tech, reading about concepts can feel like learning a new language. So TechCabal is creating a guide—short explainers—for common tech terms. In this, you’re sure to find simple short explanations that can help you understand NiFTy concepts. 

1. Blockchain

A few of the concepts we’ll explain here are based on blockchain so it’s important this goes first. 

Blockchain is a record-keeping tech that’s designed to make it impossible to hack the system or forge the data stored on it. 

How it works: Standard databases store data in rows, columns and files, but blockchain stores data in blocks that are chained together. The data on the blocks are continuously updated, encrypted, and stored on several computers so there’s no single computer to hack or control the data from. 

In explaining blockchain, Buchi Okoro—CEO and co-founder of African cryptocurrency exchange Quidax—said: “Imagine a book where you write down everything you spend money on each day. Each page is similar to a block, and the entire book, a group of pages, is a blockchain. With a blockchain, everyone who uses a cryptocurrency has their own copy of this book to create a unified transaction record. The software logs each new transaction as it happens, and every copy of the blockchain is updated simultaneously with the new information, keeping all records identical and accurate.”

2. Cryptocurrency

We all know what currencies are—dollars, pounds, shillings. Well, cryptocurrencies are digital currencies. You can’t hold it the way you’d hold fiat currencies like CFA coins or naira notes, but you can still spend it on things you love. 

How it works: Cryptos are digital currencies created on blockchain technology. If you got a sense of what blockchains are, then you’ll understand what we mean when we say that cryptocurrencies are decentralised; no one person or government controls them. They are created by algorithms and used to award engineers—called miners—who carry out maintenance on the blockchain. 

Unlike fiat currencies which derive their value and validity from states, cryptocurrencies derive their value and validity from the blockchain.

3. Non-fungible token (NFT)

Don’t be fooled by its mushroom-sounding title, NFTs are in fact inedible, even the NFT flavours. NFTs are unique digital assets created on a blockchain. 

How it works: To put it simply, NFTs are digital works that exist on blockchain. They can be images, sounds, game skins, or even clothes for your digital avatars. These digital works are impossible to duplicate or forge; they’re one of a kind and that makes them valuable. If you’re asking yourself why a screenshot of an NFT isn’t as valuable, it’s because NFTs have been embedded with code which is what makes them exist on the blockchain. 

Think of it this way, when you go to a museum and take photos of artefacts, what you have is just a photo which isn’t quite valuable. The museum still has the original valuable artefact.

It’s similar with NFTs. We can take screenshots of Niyi Okeowo’s $2,800 Indigo Child (below) but it doesn’t mean we own the asset. The original copy—the property rights and certificate of authenticity—belong to the buyer. 

4. Web3

You’ve probably seen tech bros throw the word “Web3” around a lot. It’s the answer experts give to questions from “What is the future of the internet?” to “What does Spiderman navigate the internet with?”

But what exactly is Web3? To put it simply, Web3 is taking democracy to the internet.

Let’s take a look at Web3’s ancestors, Web1 and Web2, so we can understand what it’s all about.

• Web1 was the earliest version of the internet, which existed between the 1900s and the early 2000s. In this version, content was delivered via texts and graphics to users who could only consume the content but not interact with it. 
• Web2 is what we have now, an interactive and social web where companies can build revolutionary apps that allow users to become creators. It’s centralised, i.e. controlled by companies or governments who can decide when websites, apps or content can be taken down with little input from users. 
• On Web2, apps are only available for as long as the company that owns them decides. Streaming sites can shut down, online games can upload patches users don’t like (yes, I’m looking at you Riot Games), and traditional banks can freeze bank accounts when the government demands it. 

How Web3 works: Web3 will be built on the blockchain working independently from different parts of the world. 

On Web3, decisions regarding the design and operation of products and funds—including crypto—will be made by communities of people called Decentralised Autonomous Organisations (DAOs), and not governments or companies. So if you find an app or product you like, you can join the DAO of that product, buy shares and vote on which changes should be made. 

For example, if you joined TechCabal’s DAO, you’ll get to decide how we upgrade or downgrade depending on how much shares you have in the DAO. 

5. Decentralised Autonomous Organisations (DAOs)

DAOs or Decentralised Autonomous Organisations are social communities that will create rules and regulations which will be embedded in programming codes. 

How it works: Unlike conventional organisations like TechCabal, which have managers and boards of directors that govern it, DAOs are governed by communities—who don’t have to be developers of the product. DAOs are created by developers who decide on a set of rules and embed it in—digital contracts on blockchain that are executed when certain conditions are met. 

The communities decide what happens to the products attached to that DAO, what upgrades to make and when to make it. Each DAO will have its own token which will be sold to its community members, and the more tokens you have, the heavier your stake and voting rights. 

—

Bitcoin is money, a legitimate currency for transactions. 

There, I said it. And by the end of this piece, you won’t fret much about discussing this idea with friends and family.

This is not a campaign; it’s a recognition of reality. Money is whatever medium people agree to use to exchange value. As long as this medium can be used by both parties to account fairly for their exchange – if nobody is playing a fast one on the other – it’s legit.

Bitcoin is part of a family of thousands of cryptocurrencies including Bitcoin Cash, Ether and Litecoin. The “crypto” in the term gives off cyberhacking vibes, of some dark-web nefariousness. But the word’s Greek ancestor “kruptos” simply means “hidden.”

Cryptocurrencies are created with computer code, and as such are called digital or virtual currencies. The code is encrypted to prevent counterfeiting and make it transferable across geographies.

How does this work? 

Blockchain technology is the subject of a separate piece, but what a user needs to know is that no central authority controls its flow. Every cryptocurrency has a decentralised ledger that records each transaction.

Before setting up your Bitcoin wallet, a caveat. Bitcoin has two problems that make it somewhat less desirable than regular money. 

One, it has a finite supply because the currency’s source code imposes a limit on how much Bitcoin can be mined. Secondly, the decentralised nature means it is not under government control, making it a favour currency for malicious actors.

Also, it’s digital only. You can’t squeeze it into an offering box. That’s not a problem, is it?

Crash course over. Now, let’s set up an account and start transacting.

Select a wallet

You know how a wallet is needed for cash? Same applies to cryptocurrencies. So the first thing to do – after understanding how Bitcoin works – is to decide on which wallet to use.

There are a number of options for Africans: BuyCoins, Bitsika, Quidax, Luno, Bundle, YellowCard, LocalBitcoin. And more.

We’ve written a bit about BuyCoins before but the focus was on Sendcash, a product that facilitates Bitcoin-to-naira transfers across borders. BuyCoins has unveiled the feature in Ghana this week as more Africans latch on to the digital currency ride.

There’s no art to selecting any of these apps, so you should go with whichever feels familiar to your senses. 

Download and sign up

After downloading Bitsika, you can “Continue with Google” to sign up using your Gmail address. A username is required and four-digit PIN is all it takes to create a wallet. You can do this in two minutes, but additional details are required to verify your identity.

Luno’s first page after downloading the app displays the current Bitcoin price in your local currency, with tabs for other currencies. You get the option of exploring the app before deciding whether or not to sign up for a wallet, which is cool. A Gmail or Facebook account can be used to set up an account.

Quidax says it’s “Beginner friendly” with round-the-clock support available, then requests your phone number. Bundle asks for your phone number on its first page but setup is pretty seamless.

BTC Pay. It’s got some press this week after the Feminist Coalition, a women’s group in Nigeria at the forefront of the #EndSARS movement started using it to receive donations.

Generally, signing up for a basic wallet Bitcoin requires a mix of these: a username, phone number and email address. 

Fund wallet

Depending on the app, you can fund a Bitcoin wallet through bank transfer, credit/debit card, or mobile money. 

Bitsika offers all three, Bundle has just card and bank transfer (perhaps because it is still new and based in Nigeria where mobile money isn’t such a big deal).

I don’t know if this applies across the board but funding a Bitcoin wallet takes more time than usual bank transfers or wallet funding activities on, say, Piggyvest. 

For example, it takes up to 15 minutes for a card transfer on Bundle and up to an hour for a bank transfer. Both transfer modes incur transaction fees: 1.5% and NGN 150 respectively.

On BuyCoins, deposit is by bank transfer and it’s free.

Follow the app’s instruction to add a bank account, and select an amount to transfer to the wallet. The transfer is stored as a local currency or US dollar (if the wallet accepts dollars) token on the wallet.

Buying and selling 

With the token in your wallet, you can buy Bitcoin. At the time of writing, the exchange rate stands at 1 BTC for ₦5.3million ( ~ $13,970 at the Central bank of Nigeria rate).

When you’ve got to this point, selling and sending Bitcoin to other people becomes rather straightforward. You’ll be sending the BTC to a wallet address, the equivalent of an account number.

But depending on the app, there may be an extra level of verification required to send cryptocurrency. 

BuyCoins requires identity verification and has a guide for sending cryptocurrency on their app.

Bitcoin transactions are facilitated by processors like BTC Pay. It’s got some press this week after the Feminist Coalition, a women’s group in Nigeria at the forefront of the #EndSARS movement started using it to receive donations.

As with any digital product, it’d be wise to familiarize yourself with whichever app you opt for before undertaking transactions. 

Thanks to Maywa Tudonu, a Nigeria-based blockchain engineer, for clarifying some aspects of Bitcoin operations for this Factsheet.

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Non-profit organisations, social enterprises, and for-profit businesses.

Organisations in each category require capital to fulfill their obligations. The founding team in each case would usually launch the project with personal funds. Where family and friends are financially capable and available, they could be early sources of funding too.

But be careful, because an organisation may not be the same again when it starts taking money from anyone outside the founding team.

In the case of non-profits, they typically receive grants for their work. These are interest-free gifts without obligations on repayment. The funder gives the organization the money for the gratification that will come from one social good or another being accomplished.

Grants come from wealthy individuals and organizations who do not necessarily have anything to lose but would love to create impact. 

In that sense, putting money into organisations where there is no expectation for financial return is more an act of cash injection than an investment. Merriam-Webster says the use of the word “invest” in finance originated from an idea that money was being “clothed” into a new form. The word then evolved to imply expectations of returns.

So when family and friends give you money as an investment, they expect it positively transformed and returned. It’s business!

By agreeing to this understanding of the money being offered, you could either be taking debt or sharing equity.

Both mediums of investment are the chief instruments of fundraising in the startup world today. Startups from pre-seed to later stages that seek external financing are either borrowing money to repay with interest, or giving away partial ownership of their company. 

In this edition of Factsheet, we’ll explore four categories of instruments which startups offer in exchange for money from investors. We examine them from the lens of a startup between the pre-seed and Series A stages. 

What we learn from how each is structured can be useful when planning to speak to investors. 

Loans: Debt to be repaid with interest

A startup could get a start by getting loans either from angel investors or institutional investors. But we should say right out the gate that this is a road less travelled by companies that are just taking off.

Banks are very risk averse and considering the overwhelming proportion of startups anywhere in the world fail, banks don’t have much scope for imagination when it comes to funding startups. The conversation is a non-starter in Africa where poor addressing and identity systems increase credit risk.

That being said, a startup team could manage to convince an angel investor on a short-term lending agreement that will accrue a sizable return. The investor takes precisely the sum of the capital and interest as at when due whether the company is failing or overflowing with success.

But should the investor feel like standing a chance of having that loan evolve to become equity, then both parties will have to exchange a more sophisticated investment instrument.

Convertible notes: Debt that converts

A convertible note is essentially a debt instrument that can become equity, usually at some point of maturity in the startup’s life like a subsequent fund raise.

Startups use convertible notes when there is no set valuation for the company. Instead of haggling with the investor, the team agrees to take the investor’s money guaranteeing it will be paid back with interest – unlike in a full valuation-based equity investment. The difference here is the potential to in fact retain the funds and convert them to an equity share.

Startups that issue convertible notes are usually confident of their growth trajectory. As a company matures into a Series A, there will be no need for convertible notes any more as there is a strong sense of what the value of the company is. 

SAFE: Conversion without maturity dates

The main difference between a convertible note and a SAFE is that the latter has no maturity dates or interest rates attached.

Introduced by Y Combinator, the Silicon Valley accelerator and investor in 2013, SAFE stands for Simple Agreement for Future Equity. As the name implies, it is an agreement that anticipates a future opportunity for investment.

Basically, if a startup gives an investor a SAFE, they are telling the investor that they will be able to purchase shares in the company in a future funding round.

This simple agreement removes the burden of having to think of the investor’s money as time-bound debt that has to be repaid at a given date at specified interest rates. 

A number of clarifications are layered on this simple agreement to ensure the founder knows how much of his or her company could be potentially given away in those future rounds.

SAFEs can literally be held for long periods of time by investors without converting. That may not be ideal for an investor who would want to get their money to become equity shares as soon as possible. 

However, a SAFE gives founders some safe space within which to grow and achieve scale without the pressure of an unpaid debt.

Common and Preferred shares: Owners and shakers

When a startup grows and raises a seed round after issuing SAFEs, it is able to now offer common shares to its investors, solidifying their relationships as full equity holders in the firm.

Commons shares are based on a calculation of the company’s valuation which can be determined in a number of ways from assessing comparables to modeling around sales to date.

The convention is to issue common shares to investors who can vote on the company’s board of directors and approve consequential business decisions like mergers and acquisitions. 

Holders of preferred shares don’t have these privileges but their stock is “preferred” because they get first dibs on dividends, payouts in cases of potential bankruptcy or liquidation of assets. 

Common shares – because they cannot be cashed on as quickly as the preferred – are more high risk but also have high reward.

In summary, the instrument a startup issues to an investor would depend on the stage of the company’s operations and the strategic needs at the point of fundraising. Startups founding teams should definitely be educated on the mechanics of each instrument and talk over the implications with investors in each case.

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Lucas Gompou learned useful programming basics in high school. Upon enrolling into University however, he realised there was a gap between what was being taught in computer science and what happens in the real world.

So he dropped out in the second of his three-year undergraduate program and got a job to start applying his knowledge. In the years since, he has taught himself to be a frontend developer. He works for a startup in his home city of Abidjan, the capital of the Ivory Coast.

In Africa, formal training for programming is often not good enough for professional practice as introductory courses in secondary and tertiary schools barely scratch the surface. 

Hence in the last decade, we have seen companies like Andela, Decagon and Semicolon, as well as wholly online learning platforms offering MOOCs (Massive Online Open Courses) spring up to fill the void.

Not many people can get into structured learning programs. For most Africans, the dream of becoming a software developer is pursued by self-learning.

The good news is that Africa is the fastest-growing continent for developers. African talents made 40% of the open source contributions on Github last year.

In 2019, 24% of tech job openings in Nigeria were for frontend developers. A wave of new startups like Africave and WeJapa are joining Andela in the talent matching space.

HTML, CSS and Javascript are the foundations of frontend development, the latter being the most commonly used programming language in the world (for the eighth successive year) according to this year’s Stack Overflow developer survey. Javascript frameworks like React (developed by Facebook), Angular, and Vue are among the most in-demand in the business.

It’s relatively easy to get started, but even the best learners could do with some guidance. Relative to North America or India, the entire field of software development is nascent in Africa.

So from the experience of people in four African countries, here are a variety of pathways to take en route teaching oneself to become a frontend developer.

Ire Aderinokun and Mathekga Leshabane, Nigeria and South Africa

Five years ago, she was a freelance designer and developer. Aderinokun is now the co-founder and VP Engineering at BuyCoins, a cryptocurrency company. She’s also a lead organiser of Frontstack, a developer community in Lagos, Nigeria.

In this step-by-step guide that features blogs, videos and online courses, she shares a great DIY syllabus that leverages multiple platforms and teachers to give access to just about anyone to the frontend engineering profession.

The guide proceeds from the foundations of HTML and CSS, through concepts on web accessibility and Javascript, to an introduction to APIs. The mix of blogs – written by Africans and others – and audiovisual content creates a sense of flexibility to learning.

Transitions from one section to another are mediated by a project to check comprehension, tracking progress by practice.  But should learners start applying for jobs as they progress through the courses?

“I think it’s healthy to put yourself out there to see what the options are,” Aderinokun says to TechCabal.

Leshabane, a developer for PwC South Africa, echoes the sentiment. While YouTube was his go-to source, he never had the time just to focus on learning: “The best way to learn is to learn on the job.”

Some of the material in Aderinokun’s guide will take some time to digest for absolute beginners, especially those without relatable scientific backgrounds. What should they do when they hit a mental brick wall?

“Take a break! If I’ve really hit a brick wall, there’s no benefit to continuing because nothing will get done. Usually, some time away from the project will actually help me approach it in a different way when I do revisit it.”

While her advice is to start applying for jobs when one feels ready, the fear of rejection should not be a limitation.

“I’ve been rejected countless times, and yes it hurts, but you learn from the experience and you keep developing.”

André Atchori and Lucas Gompou, Ivory Coast

Atchori started by buying books and taking training courses on Udemy and Coursera. After reading the books and doing the exercises in them, he would visit Behance, a social media platform owned by Adobe for creatives. 

“I found a website template posted and reproduced it. That was my challenge. and I’d post it for free on my Github,” he says.

Like his countryman Gompou, he’d learned some things at school but it was behind the times. 

Unlike people in Anglophone countries, Gompou and Atchori had one extra hurdle: they needed to learn English.

“All the best books are in English, so i think it’s necessary to learn English to be a good Software developer,” Atchori says.

And so with a good grasp of English and with three years learning through books, he landed his first job. He now works remotely from the Ivory Coast for a company in Italy as a software developer.

If he had to do it all over again, he’d buy more books. YouTube, in his view, was good but “you won’t get too much detail even if there are YouTube channels that stand out from the rest.” 

The books are deeper, he says.

But reading without practicing isn’t enough. To be truly competent, Achori advises learners to explore and attempt front-end coding challenges, like the CSS Battle online.

Bahati Robben, Rwanda  

Robben’s break into software development was through Andela’s bootcamp. After an eight month stint there, he now works for One Acre Fund, a non-profit in Kenya.

But he was only able to get into those places by relying on YouTube tutorials, Udemy courses and W3Schools. These were his options because he was an undergrad at the time “without enough funds to pay for courses.”

In his view, good investments in time and some financial resources to get decent courses can put anyone on a path to a good junior frontend role in Rwandan companies like iRembo, AC Group, SPENN or one of the telcos. 

For those who want the Youtube path, he recommends courses by Mosh Hamedani and Brad Traversy. 

These “will give you the overview of what you need from setting up your development environment, to deploying an application,” Robben says.

But beware of ending up in the “tutorial hell” of always watching but with no practice.

“You learn by doing. Once you get the basics, attempt a real world project. This might be internships [including] unpaid internships,” Robben says.

In summary, teaching oneself to be a developer can be a rewarding experience but it takes personal dedication. Out of the many resources online, a lot are actually capable of disorienting the beginner. 

But with a good guide, two years of practice can prove to be transformative. Hope this helps.