Entrepreneurship through acquisition: ASF accelerator
Interested in acquiring a company to run as its CEO? well there is an accelerator for that !
Ever since YC was formed in 2005 ,there has been an explosion of seed accelerators on all four corners of the globe, helping young and not so young entrepreneurs get a safe place to validate their ideas ,build peer networks, and secure seed funding in exchange for an equity stake in their businesses.
That model has worked well with various degrees of success in different markets. It works for software and IT related products and services but there is more to the world of business than software even though software is eating the world.
On the other hand people have been buying and selling businesses throughout history, in the 1980s a search fund model was created at Stanford university that provided another form of incubation and safe place to search and acquire an existing business targeting family run businesses with succession issues but with relatively good cash flows.
Entrepreneurship through acquisition had found a cheerleader in the academic world.
Fast forward to 2009, i met a friend of mine who introduced me to search funds, i was intrigued by the simple structure and the opportunities it offered and the lower risk it presents compared to the conventional startup route.
A couple of years later 2011, i posted this on our LinkedIn group:
I wrote an article arguing that search funds could be the new engines of growth that Africa needs and i went back to work behind the scenes putting all the pieces of the blocks together.
Well it turns out that i wasn’t alone in spotting that gap and someone else at INSEAD had a similar idea and more money to execute it. http://www.searchfundaccelerator.com
This was a great validation .
As of today there a couple of search funds operating in Kenya and Nigeria .
“The SearchFund scene in Nigeria is very challenging due to many reasons, lack of understanding by business owners of what they are, trust issues with African businesses, and owner obsessions with running their “babies” sometimes named after them or their wives.
Raising funds for a search fund is extremely difficult, and finding deals is even a greater difficulty, most business have bad book keeping practices or none at all, they are sole ownership with owner/manager approach, mostly badly managed but with well-known names and clientele.
But is a very promising sector, we have succeeded in quite a few and failed in very many which is usual and expected. We started a search fund because most attention is on Venture Capital and angel investments, this particular financing segments are mostly open to technology enabled entities and not other sectors, we’ve seen many potential growth businesses in the service sector, food and beverages, hospitality and food processing that can be taken over and scaled providing a healthy pipeline for the Private equity sector.”
Then there is Impala launched in 2013 and recently acquired a business in Kenya.
Search funds do offer a reasonable payday while giving sellers some confidence that the company will not be eviscerated unlike other cases with private equity.
“You come in and tell them we’re not just there to fire people and that’s a strong message to send to the owners”
So it is with great pleasure that i present to the world : Africa Asia Search Fund Accelerator(ASFA) http://asf.strikingly.com/ the first accelerator dedicated to supporting entrepreneurs that are keen to acquire and operate mid market companies across East/West Africa and Asia. Our mission is simple:
ACCELERATE THE RENAISSANCE OF AFRICA/ASIA.
We will run two 6 months programs a year starting in (March & September). Applications are open all year around.
The program is open to all nationalities. This is your time to make your mark. This is not a technology incubator or accelerator.
INVESTMENT CRITERIA
ASF looks to partner with management teams and owners in order to create catalysts for unlocking value. Our investment parameters can broadly be categorised as control acquisitions, management buyouts, corporate divestitures, and special Circumstances.Our transactions will typically involve privately-held companies, family-owned businesses, and corporations selling divisions.
Revenue: $2 million to $10 million preferred,
EBITDA: $1million to $5million preferred,
Geography: East and West Africa.
There has been great programs that are focusing on entrepreneurship in Africa most notably TEEP the Tony Elumelu Entrepreneurship program and the Africa Fellowship Program . We believe that ASFA will fill a very important gap.
Applications for ASF (March 2016) are now open. Apply Now
Further information can be obtained by contacting us
Learn more about Search Funds here
