A culture of angel investment could help entrepreneurs in developing countries (Credit: infoDev)
Investors and ‘Africanists’ Wesley Lynch and Keet van Zyl, co-founders of AngelHub in South Africa had fascinating things to say about early-stage innovation financing during infoDev’s Global Forum on Innovation and Technology Entrepreneurship in South Africa. Not only did they help in selecting the most inspiring entrepreneurs for the Forum’s Dragons’ Den pitching contest, they were putting forward a lot of passion in explaining how a culture of angel investment for startups and fledging entrepreneurs could be established on the African continent. As access to finance is noted often as the main problem for innovative startups, we should look seriously at models that show potential.
“You have a good social project, but it is not an investable company”, I heard fellow judge and technology activist Mariéme Jamme say to a South African entrepreneur who had just given his best business pitch. He was taking part in the Dragons’ Den at the 5th Global Forum on Innovation and Technology Entrepreneurship, a fantastic 3-day learning and networking event organized by the World Bank’s infoDev and the South African Department of Science and Technology. You could see the entrepreneur (let’s call him ‘B.’) gasping for air, and one could hear a pin drop in the completely filled auditorium of the Global Forum. Over 800 people, mostly entrepreneurs, financiers, policy makers and technology ‘evangelists’ from all over the world had gathered here.
Business reforms can spur economic dynamism in the East African Community
East Africa is famous for its breathtaking landscapes and its unique concentration of wild animals. Could it also become as famous for its dynamic economic development?
In 2009 I came to Tanzania to work on tax harmonization in the East African Community (EAC). The Common Market Protocol was about to be signed and one of the biggest goals was to tap into the economic potential of the region by facilitating (cross-border) trade and improving the business climate. A year later, the five Partner States of the East African Community ratified the Common Market Protocol in order to realize “accelerated economic growth and development through the attainment of the free movement of goods, persons, labor, the rights of establishment and residence and the free movement of services and capital”. The overarching goal of the East African Community is to achieve sustainable economic growth in order to increase employment and reduce poverty.
How are emerging market entrepreneurs leveraging technology and changing development paradigms? Why are the rewards of funding innovative new ventures in emerging economies worth the risks, and what makes these investments succeed? How can investors, policy makers, and the private sector in general help find and groom transformative high-growth enterprises?