Africa venture Capital Salon: the power of trusted networks.
This week has been full of twists and turns but it has reminded me the importance of creating trusted networks as we seek to evolve our ecosystem.
You see the truth of the matter is that no matter how much we slice and dice all of these reports on who is getting funded or not ,at the end of the day if we have to create a system that works for us then it is up to us to have an integral role in crafting the narrative of the outcome that we need.
The limited partners always dictate the terms of their investments.
When it comes to the state of venture capital in Africa today, there are very few pure play VC firms, i have attended a few conferences in the last few months and most of them still see the venture capital asset class as a very risky one compared to Private equity but the recent $40M deal by Andela that was led by CRE marked a unique moment because for the first time ever we can now claim that we are at the beggining of a new paradigm shift because success breads success.
There is a big difference between leading and following rounds; here is a good summary by FredWilson
Personally i believe that we need about 50 micro funds across Africa tackling all sorts of verticals before we can start moving the needle.
As i have argued in the past, the traditional Private equity model works for certain people but we need more diversity.
With SobekCapital we chose to focus on #venturedebt .There is $1.0 billion* (Syntaxis) Annual growth credit demand to service.
There is room for many more varieties and flavors of finance and i hope that the ecosystem keeps evolving.
For this reason i believe that we need to create trusted networks where we can help each other because believe it or not it takes a village of VCs to raise a fund. There is a lot due diligence involved and you always need people that can vouch for you especially if you are a first time fund manager.
We still don’t have many angel investors that have built a solid track record that allows them to transition from angel size checks to VC size checks and eventually able to attract institutional Limited partners.
It is with this clear vision in mind that we recently launched a new series of monthly events called #VentureCapitalSalon to bring together existing VCs, aspiring VCs and also entrepreneurs.
The goal is to simply create a critical mass of venture firms that are brave enough to stand up and tackle funding problems faced by founders across the continent.
Here are some of the tweets from the inaugural session:
Feel free to join us at the next one on the 7th December and we welcome all feedback and ideas to scale this series.
