Business
Towards a business model for funding African Startups
This will not be an easy effort. The experience of an effort called the Startup Africa Fund proves instructive for the individual or team that seeks to implement this.
The idea of scaling the solution described above comes by way of competition – many more funds set up by other individuals specifically to copy and implement this model, and an increasing interest in investing in African startups from the global community of angel and venture capital investors currently unassociated with this effort. The durability of this approach is closely tied to successful outreach to the African diaspora aimed at steering a portion of remittances, and eventually foreign direct investments (FDI) towards early stage African startups.
An Africa-focused seed and early stage venture capital fund that invests in technology startups and generates outsized returns for its investors is the surest way to get more investors paying attention to, and investing in African startups. Such a fund would generate jobs, create wealth for its various stakeholders and increase economic prosperity within the communities in which startups in its portfolio operate. In addition, some of the startups this fund would invest in would undoubtedly improve the lives of many people in Africa and elsewhere. With hard work and a little luck, a number among them might even change the world in the process.
This article has been sourced from a discussion by the author (Brian Laung Aoaeh) under the same title that was published at Tekedia on 7 January 2013.
Brian Laung Aoaeh is an investment research analyst at KEC Holdings LLC, a venture focused investment fund based in the state of New Jersey, in the United States. He spends the majority of his time assessing potential early stage venture capital investments and monitoring startups already in KEC’s portfolio.
