Raising Venture Capital (VC) in Africa

By: Joram Sengendo and Dan Mosanu (Summer Analysts)

'There is a big gap between the people that are looking for venture capital and the people that have venture capital.' - Joe Collins 

‘Many of the already functioning businesses in Africa need to be taken to the next level in order to be attractive to venture capital’ - Jade Smith

Very rarely does a group of seasoned investors and entrepreneurs, all burning with the same passion for Africa share a stage to convey their unique and insightful experiences of Venture Capital investment into the continent.

On 9 July 2012, at the Eight Club in the City of London, the teams at Amoo Venture Capital Advisory and Professionals for Africa were delighted to host a group of expert panelists and over 40 delegates for the event titled, "Venture Capital: Raising Finance for Small and Medium-sized Enterprises (SMEs) in Africa". Both panels were filmed for posterity by The Knowledge Channel. They can be accessed via the links below:

· Investor panel

· Entrepreneur panel

The event kicked off with the investor panel, chaired by Michelle Kathryn Essomé of the African Venture Capital Association (AVCA). Her panel colleagues: John Butt of Conduit Ventures, Simon Merchant of Jacana and Mark Florman CEO of the British Private Equity and Venture Capital Association (BVCA), joined her as they discussed several topics central to the African Venture Capital story.

John began by emphasising on the importance of operational experience in raising VC funds, and the management of investments, which is even more crucial in the African continent. Simon - whose firm not only aims to make profit, but also to create jobs in the local markets they operate in - spoke with enthusiasm of the uncharted waters, which are the African Francophone nations, whose vast investment potentials have not yet been exploited by the amount of capital it would warrant. Next was Mark, who discussed the difficulty he and Bob Geldof faced during the fund raising for Africa-focused Private Equity fund, 8 Miles. Mark pointed out that their experience was disappointing, especially for a region whose growth and investment opportunities are still widely untapped.

The investor session ended with a short break and for some refreshment; thereafter, delegates were reconvened for the much-awaited entrepreneurs panel. The panel, chaired by Nzube Ufodike of Amoo Venture Capital Advisory, and was made up of Remi Okunlola, founder of SeaWolf Oilfields, Hannah Acquah, founder of the The Knowledge Channel and Joe Collins, founder of African Supplies. The discussion started off with a personal story of each entrepreneur, but a central theme soon emerged: the challenges they faced doing business in Africa. All three panelists agreed that the most important factor in determining success for an entrepreneur on the continent is having the right connections.

From Joe’s story about his goods being stuck in ports, to Hannah’s discussion about the way she found her business partners at various yacht and country clubs, and finally, Remi’s point that the continent does not have the robust checks and balances as Western Europe. At this point, the lesson became more apparent that having the right network is imperative for a successful venture in Africa.

At the end of the event, the general feedback from the delegates - many of whom are budding and established entrepreneurs and financiers themselves - was that the insights provided by both panels were not just invaluable, but also credible as these were based on experience of dealings in Africa. In addition, many also felt that events like these provide not only a fantastic networking platform for current business leaders in Africa, but also for those interested in developing their ties and relationships in the continent.