Many start up companies in emerging markets in Africa, have the right business plans, but lack the funds to actually kick-start their ideas. This month two big events want to change this reality. They feel the sky is the limit. A round up.
Much has been said about the rapid economic development of Ghana and the alluring opportunities for both business and investors. Last year there was a GDP growth rate in Ghana reported of 13,6 %. At the Annual Venture Capital Association event in Accra, – with the title ‘Africa the rising Giant’ – held last week, all this optimism came together.
“Africa is the next and last continent to go through the growth phase of software entrepreneurship and start-ups. There is no more exciting place to be than here!” says Ben White, a co-founder of VC4Africa while he is taking part in a debate at the Annual Venture Capital Association event.
His organization VC4Africa is a platform that wants to connect entrepreneurs and investors. More that 220 business plans can be viewed online. Investors can directly contact the entrepreneur.
White: ‘I met local Ghanaian angel investors investing in early stage ventures here in Accra and we see a growing number of ventures finding early stage support. It is inspiring to see the rise of local initiatives like the Ghana Angel Investor Network (GAIN)’.
Karim Sadek, Managing Director at Citadel Capital and present at the event: “Africa is long on opportunity, but short on capital and management expertise — two things that private equity is uniquely positioned to bring to the table. Private equity has a vital role to play not just in creating opportunities that generate outstanding long-term returns, but that meet the aspirations of more than 1 billion Africans working for a better tomorrow.”
But how to get private equity, when you are a start-up company? There is severe prejudice about doing business in Africa among many investors who do not know the markets. Problems around legal issues, bureaucracy or finding the trustworthy management are often mentioned.
A strong network and moving around in the right circles, is supposed to be key for start-ups and this is something VC4Africa is bringing to practice on a local level. Last week – also in Accra – the organization, put together a VC4Africa meet up.
Lack of knowledge
Tech blogger Charles Mensah is enthusiastic: ‘You meet investors and venture capitalists like Innohub, Afrinova, VC4Africa, GAIN, Ghana Venture Capital Trust and others. Start-ups find out where the money is and how to get it. By attending the events, they become part of the eco-system and hopefully they are picked up early. And it is not always about the money that start-ups need. Over 95% of start-ups fail, not because of lack of funding, but due to a lack of knowledge.’
Ben White: ‘Any member of VC4Africa can organize a meeting in their area whenever they feel there is a need. And so people do. Meet ups where investors and entrepreneurs in the technology sector have met, are organized in Kigali, Kampala, Nairobi, Johannesburg, Lagos, Tunis, San Francisco, Atlanta, Washington DC, New York, London, Leuven and Amsterdam.’
In Rwanda, on a slightly different event, but equally optimistic in tone of voice will be organized in Kigali on 17, 18 May. The event is called ‘Growing SMEs’ and the idea is that leading entrepreneurs, investors and experts gather to accelerate Small and Medium Enterprises (SMEs) growth in emerging markets.
‘‘Growing SMEs” seek to identify a new generation of entrepreneurs and get them growing a business that creates jobs and supports emerging market economies’ says Thierry Sanders, Founder of BiD Network Foundation, the organizer of the event.