In classic cyclic fashion, the discussion on ideas, execution and capital has headlined Kenya’s tech ecosystem once again. On one hand, it is said that there is more than enough capital to go round for solid ideas where founders have taken time to deliver a proof of concept or better still gained traction by having paying customers. On the other hand, you will hear the clarion call “show me the money” from hundreds of entrepreneurs looking for much needed infusion to meet bold targets they have set for themselves. Therefore the lack or availability of capital depends on who you have coffee with. I do not wish to resurface previous takes on topics like race capital, advice capital and personal networks from shared alma mater, which carry weight in and of themselves, but to highlight the key issues with both parts of the value exchange.
The Idea People
We entrepreneurs need to understand that investors are not partners in the way that we often like to imagine, even the social investment types. They have a very selfish interest which is to grow their portfolio in hard number terms, in the very same way that we chase black and then some, on the bottom-line. We must also be cognizant of our own self-absorbed demeanor where we know and think of ourselves as having the perfect skillset and teams to take on our chosen vertical. I am yet to meet an entrepreneur who thinks of their setup as tier two, everyone is best in class. Thing is, there are several suitors to every investment shilling / dollar out there. Speak early, speak often.
The Money Men and Women
Investors come in different flavors but a universal truth exists where deliberate and purposeful engagement in local ecosystems cannot be substituted by desk research and for operations based outside Africa, safe cross-continental experiments manifested most strongly by the backing of “entrepreneurial missionaries” who carry a comfortable and relatable mindset and vibe.
Capital carries the bias and risk inclination of its minders and until we can find a truly denatured, balanced and agnostic way of profiling opportunities for investment, I regret that we are stuck with a subjective human process that is flawed in many ways.
Our best bet would be to encourage the establishment of numerous niche funds with opportunity filters clearly articulated and also catalyze more individual local investors for the seed stage which is where after all, the biggest bets are made.