A quick glance at the more prominent global investment communities, a filter for Africa based startups will reveal a not so surprising startup founder metric that has been the source of conversation among technology entrepreneurs. Broadly put, the ventures that have closed on decent rounds of funding with primary markets in Africa are almost all exclusively founded and led by expatriates often with a Delaware registration to boot. The online conversations have been primarily about race capital; whether it actually exists and generic formulas for “correcting” the current state of affairs.
I am of the opinion that you cannot dictated how one doles out resources available to them or the criteria that they apply to arrive at their decisions. You are the sum of your networks and many times you will extend a favor, credit line or other form of support to someone with whom you share a common thread, it’s just human nature. And therein, lies the inadvertent solution; establishing common threads that allow for value to be extended.
Access to growth capital for post revenue companies with good structures exists in plenty with some pundit’s arguing that there is over supply. It remains therefore that the up-line needs to be seeded with more companies with requisite runway and additional business support to ready them for growth capital should they need it.
Therefore, we must establish more afrocentric investment communities where three things can happen; first, a mapping of needs; second, an identification of possible partnerships and third, engagement. Technology entrepreneur communities have been humming for a number of years now and anyone who wants to get on that train has numerous options from which to choose. What we need to see grow, is the community of local investors, starting from the ground up; understanding of the lay of the land, simple nuances on expectations and risks, finally maturing into investment outfits that can over time, with well placed bets morph into companies that can take on much larger deal sizes.
The African Business Angels Network – ABAN was established last year with the coming together of networks based in Nigeria, Cameroon, Egypt, Ghana and South Africa with support from the more visible communities, Venture Capital for Africa (VC4A) and European Business Angel Network (EBAN). The Kenyan cohort is holding its first angel investor boot camp today and I will share those insights post meetup.
Africa abounds with opportunity and we must scratch our own itch even as we celebrate the possibilities.