Sub-Saharan Africa is home to some of the world’s fastest-growing economies, with many young entrepreneurs starting businesses and creating jobs across the continent. However, these entrepreneurs frequently face roadblocks to securing the capital that would allow them to grow and increase the positive impact on their communities.
In October, more than 250 venture capitalists, government leaders, and entrepreneurs gathered in Johannesburg, South Africa for Africa Investor Week (AIW), organized by Emmanuel Luthuli, 2017 Fellow from South Africa and CEO and Co-Founder of LanteOTC, a crowd-funding investment platform. Over three days of networking and discussions, AIW conference attendees discussed investment trends in Africa, the challenges of identifying investment-ready enterprises, and the private sector’s role in cultivating young entrepreneurs on the continent.
“I recall the day I landed home from the Fellowship in 2017, glowing with ideas, only to receive stone cold resistance from investors,” recalled Luthuli. “Africa Investor Week aims to bring together entrepreneurs seeking capital and investors eager to invest in startups to explore challenges and solutions.” As a part of AIW, the Mandela Washington Fellowship held its inaugural Amplify Community Expertise (ACE) Event for Fellow Alumni. One of the newest Alumni initiatives, ACE Events allow Fellow Alumni and external experts the opportunity to network and engage on strategic topics in tandem with regional and global conferences.
As both conference attendees and exhibitors, this ACE Event gave seven Fellow Alumni entrepreneurs from Gabon, Kenya, Lesotho, Mali, and South Africa the opportunity to not only learn from, but exhibit and pitch their businesses to a premiere audience representing some of Africa’s largest banks, multinational financial management corporations, and venture capital and private equity firms. The Mandela Washington Fellowship was well-represented throughout the event, with an additional seven Alumni from South Africa and Zimbabwe featured as conference organizers and speakers, and a special Alumni panel introduced by U.S. Embassy Pretoria Minister Counselor for Public Affairs, Dr. Craig Dicker.
During the panel discussion and networking reception, Fellow Alumni offered regional perspectives on the unique challenges facing young African entrepreneurs trying to secure investment capital in Africa. Many felt that venture capital firms had misconceptions about start-ups in Sub-Saharan Africa, but also felt that entrepreneurs could do more to make their businesses investor-ready.
“Investors feel young entrepreneurs do not have enough experience to grow a business compared to older entrepreneurs that have started several businesses,” says Eric Muthomi, a 2014 Fellow from Kenya and founder of Stawi Foods and Fruits Limited. This perception makes it challenging for youth-led companies to find capital for expansion.
But entrepreneurs can also do more to attract venture capital, says Cheurombo Pswarayi, a 2019 Fellow from Zimbabwe and founder and CEO of MedTours Africa: “Investing is a business, [and] as an entrepreneur I need to know how to sell myself and make my business attractive for those in the business of investing to take me seriously. There are different kinds of investors – I’m not going to be the right fit for all of them, and similarly, not all investors are the right fit for me and my business.”
Alumni also highlighted how the Mandela Washington Fellowship has helped address gaps in their investment readiness through the skills and leadership training, networks, and opportunities such as this ACE Event at AIW.
“It is important to speak to investors and understand what they look for in companies so that we can re-strategize our business plans and put processes in place to be more investor-ready,” says Silvia Tonui, a 2017 Fellow from Kenya and founder and CEO of Marigat Gold Enterprises. “I think sometimes entrepreneurs operate their businesses in silos. It’s important to chat with other entrepreneurs…to refresh our ideas, gain knowledge from sharing about our experiences and leveraging off each other’s networks.”
Written by Meredith Lopez
The Mandela Washington Fellowship is sponsored by the U.S. Department of State with funding provided by the U.S. Government and administered by IREX. To learn more about opportunities for Fellow Alumni, visit mandelawashingtonfellowship.org/alumni. To learn more about opportunities to partner with the Fellowship, visit mandelawashingtonfellowship.org/partners. Stay tuned for more information on future engagements like this one.