- Samuel Darko
Africa Rising: Fuelling the Continent’s Entrepreneurs for Lift-off
Updated: May 13, 2021
By many accounts, Africa is “rising”. A continent brimming with resources – human and natural – has been trailing the rest of the world, for reasons that are not the focus of this post. But there’s hope! Many reports say socio-economic indicators are improving rapidly. Much of this growth is attributable to a proliferation of small and medium sized enterprises (SMEs) that are creating value and jobs. The dreamers and doers – entrepreneurs – behind these SMEs can be likened to astronauts. They are working hard building ventures or what you can think of as rockets. Many of them have proven that their models work and bootstrapped their way to respectable organic growth (we can think of these as prototype rockets). Sadly, none of these entrepreneurs can sleep easy about their rockets as most won’t ever truly get their day in the skies. To put it bluntly, their rockets will never really lift-off. And it’s not because their rockets are defective. It’s simply because they cannot get the fuel they need – capital to have a shot at a true rocket launch.
In travels across more than 20 African countries, I have had conversations with many entrepreneurs with promising ideas. For nearly all the women and men I get to speak to, I see their eyes light up and sense the fire in their bellies for the ventures they’re building and the impact it’ll make for their communities and possibly the continent. However, the conversations soon turn to the dearth of funding to give them a real shot at their dreams, leaving me with a sinking feeling in my stomach more times than I want to remember.
For many years, I have wondered: what will it take to give many more entrepreneurs a shot at their dreams? The answer to this is complex. With limited capital overall, and not enough investors looking to make bets on early stage companies or small companies with limited potential to scale this will be a tall order for a foreseeable future. One hypothesis I’ve been drawn to is: how do we get young Africans who are slowly building wealth and wealth to explore angel investing over more traditional savings and investment products.
Understandably, this is a tall order. As an African, when you’re only now breaking out of poverty, you’re not going to gamble your early fortune on high-risk investments, where all your capital is at-risk versus more secure investments even if returns are low. There is some traction on this front though. Syndicates are emerging allowing individual angels to share risk and reward across more deals. While it is early days, the exit of companies like Paystack and the newly-minted unicorn, Flutterwave, both of whom received early investments from such syndicates is evidence of what an outsized return can be.
Personally, I am an angel investor too. Between 2018 and 2020, I invested about $40,000 in three ventures. While I am yet to make any returns, I’m proud that I’ve helped passionate entrepreneurs make progress on their ventures.. After all I, too, early in my career, was among the luckier entrepreneurs when Meltwater Foundation invested in my very first venture. It is for this reason that I remain keen to support any initiative that makes it more likely that another African entrepreneur can access fair funding – regardless of the instrument type – to pursue her dreams.
I look forward to the near future in which many more driven African entrepreneurs, whose ideas have potential, receive the fuel to lift-off and make real the promise of – Africa Rising!