Why Angel investors are crucial in Africa’s startup ecosystem
Last week, June 8, VC4Africa contributed to an Expert Forum on SME Finance in Kenya. Around 100 experts in African SME finance converged at the Villa Rosa Kempinski in Nairobi.
“How do we reach the missing middle and bridge the gap between start up support and full-fledged equity participation?” was one of the key questions addressed. The forum was hosted by the Dutch Good Growth Fund (DGGF), the Aspen Network of Development Entrepreneurs (ANDE) and the East African Venture Capital Association (EAVCA), in cooperation with the Venture Capital for Africa community (VC4Africa), the African Business Angel Network (ABAN), Novastar Ventures and GroFin.
VC4Africa hosted the session ‘Facilitating Angel Investment for Venture growth’, moderated by Ben White, co-founder of VC4Africa, the African Business Angel Network (ABAN) and AfriLabs. Other speakers in this session were Stephen Gugu, co-founder of Kenya based angel investing organisation Viktoria Ventures, Hilda Moraa, co-founder of Kenyan DEMO Africa alumni company Weza Tele that recently got acquired by AFB, Mbwana Alliy, partner and co-founder of Savannah Fund, and Robert Yawe, active angel investor and business mentor.
Angel investing added to debate
It is new that Angel investing as a topic is included as part of the SME missing middle debate, a recent development that recognizes the key role business angels play in a mature startup ecosystem. Business angels have the ability to spot talent early, and more importantly, can offer the mentorship and coaching needed to develop entrepreneurs as individuals. This is some of the hands on work that might otherwise be packaged by SME practitioners as technical assistance, otherwise costly support mechanisms for providing entrepreneurs with extra support. Fund managers can make considerable gains when Business Angels are involved.
Key is to also recognize that business angels open doors, making introduction to industry players, and often times helping starting entrepreneurs secure their first clients. This proof of market, and the grooming of the entrepreneur into professional founder, sees a growing number of companies achieve a meaningful stage of development where they can be considered by more established SME investors. It’s this hands on work at an early stage of the venture life-cycle that sees some companies succeed where others have failed. The ‘Weze Tele case study, Startup to Exit‘ as case in point. The founder Hilda Moraa told participants about some of the key challenges she had to overcome as a founder, at one point a lack of liquidity nearly shutting down her business. Angel investor Joe Mucheru worked with the management team to redesign the business in a way the company was able to thrive.
Below we list a number of key takeaways from the discussion:
1) Business Angles are in a unique position to spot talent at an early stage, to identify entrepreneurs with founder potential and to mentor and coach that talent. Their proximity to the business is an advantage;
2) Business Angels engage entrepreneurs often because they have built similar businesses in the past. They are able to share their experience and lessons learned, a critical source of information for a first time founders particularly. They are not always rich themselves;
3) Business Angels have an established network of contacts and can make introductions and often times attend meetings with the entrepreneur. Business Angels are an important champion for the business, lend the founder needed credibility, and play a key role in securing initial clients;
4) Business Angels work with entrepreneurs anywhere from a few months to 1-2 years before additional funding is required. In this period an important track record is established. The professionalism of the founder is tested. Documentation and reporting standards are established;
5) Business Angels are able to invest at an earlier stage than SME financiers. They are able to invest between 25K and 250K where most SME funds start at 250K and much higher.
Given the critical role Business Angles play in helping to build successful startups, there is a growing interest to develop these networks and support angels with both framework and tools. Stephen Gugu, co-founder of Viktoria Ventures, explained, “We need to catalyze local angel investment much more and just as we have done with our entrepreneurs. Angel networks are important in Kenya, and especially because there are still a limited number of active angel investors in this space. This means that we need to reach out to prospective angels and offer them our tools and experience.”
Business angel networks
The session recognized a number of angel investing networks in Kenya that are now in their formation stages. These developments run parallel to the emergence of Angel investing networks that have emerged in Cameroon, Nigeria, Ghana and Egypt. The African Business Angels Network association (ABAN) has been formed in linking these networks across countries, and to help spur cross-border investing across the continent and with counterparts in the Middle East, Europe and North America. This is an important step in building a robust network of African business angels and to take the necessary steps to professionalize their activities. Also to welcome new investors and networks to the table.
Stephen Gugu adds on the role of networks, “Experience sharing from various angel investors and networks is very important. This should eventually help angel networks to set up, perhaps by financing some events in the different countries, and perhaps with a co-investment fund.”
In the closing session, Ben White concluded, “There are at least 6 million high potential high growth entrepreneurs active today across the continent. We need the participation of local Business Angels to identify this talent and to help us bring them up as outstanding founders. There is a massive opportunity to build thousands of great companies, but only if we reach out to these individual entrepreneurs and do our part to open doors.”
Singer Bruno K Exposed For Neglecting His Son, Claims He Only Has One Child
The internet has been abuzz following accusations leveled against Bruno Kiggundu, popularly known as Bruno K, over his alleged neglect of his son, Seth Kiggundu. In a tweet, a user identified as Keith alleged that Bruno K had abandoned his only son, Seth, and only pays attention to his daughter, Briella.
Keith claimed that Vanessa, his best friend, had a baby boy with Bruno K, and the singer had refused to fulfill his parental responsibilities towards Seth. He further accused Bruno of making Vanessa’s life difficult in 2022, which caused her to loathe the singer.
While it is essential to respect the baby’s privacy, it is crucial to hold public figures accountable for their actions, especially when they involve the welfare of children. The allegations against Bruno K are serious and should not be taken lightly.
Child abandonment is a severe issue that affects many children worldwide. It is a form of child neglect that can lead to adverse effects on a child’s development, including emotional and behavioral problems. Children who are abandoned by their parents may experience feelings of rejection, anger, and low self-esteem, which can lead to depression and anxiety.
As a public figure, Bruno K has a responsibility to set a good example for his fans and followers, especially young people. Neglecting one’s child is not only morally wrong but also illegal under Ugandan law. The Children’s Act of Uganda provides that every child has the right to parental care and protection, and any parent who neglects their child can be charged with child abuse.
It is not clear whether the allegations against Bruno K are true, but if they are, he should take responsibility for his actions and do the right thing for his son. Children need both parents to grow up happy and healthy, and neglecting one’s child is unacceptable.
In conclusion, the allegations against Bruno K are serious, and if true, they represent a worrying trend of child neglect in Uganda. As a society, we must hold public figures accountable for their actions and demand that they do the right thing for their children. Let us all strive to create a safe and nurturing environment for all children, regardless of their family background.
Speaker Rt. Hon. Anita Among Orders Minister Dr. Chris Baryomunsi To Stop Making Excuses For Not Establishing The Tribunal
Speaker of parliament Rt. Hon. Anita Among has ordered the Minister of Information, Communications, Technology, and National Guidance, Dr. Chris Baryomunsi to stop making excuses for not establishing the tribunal which she said has been pending for a long.
The speaker’s order followed Dr. Chris Baryomunsi’s attribution of the delay to create the Uganda Communications Tribunal to the recent Cabinet decision on the rationalization of agencies.
The speaker of Parliament Among emphasized the need for the tribunal in place.
“We need a tribunal. How sure are you that we are going to rationalize [government agencies]? We want a tribunal in UCC; we cannot do ad-hoc kind of operations,” Among said.
The Uganda Communications Commission (UCC) Act makes provision for the creation of a tribunal that is supposed to handle complaints relating to the decisions of UCC as provided under Sections 60 and 64 of the Act.
He said this during the Wednesday, 22 March 20223 plenary sitting where he tabled the Uganda Communications (Fees and Fines) (Amendment) Regulations, 2023.
The regulations provide for fees and fines to be paid by telecommunication and broadcasting companies for spectrum or frequency access in order to improve telecommunication services.
His response was prompted by the Leader of Opposition (LOP), Hon. Mathias Mpuuga who accused the minister of ‘sleeping on the job’ by failing to fulfill the provisions of the UCC Act in regard to the creation of the communications tribunal.
“We have raised severally in our alternative policies the question of the minister failing to appoint the UCC tribunal. The minister is now the tribunal; he is acting as the complainant, prosecutor, and judge at the same time. The Ministry [of ICT] is holding media houses at ransom with no recourse to this tribunal,” Mpuuga said.
The Speaker referred the Regulations to the Committee on ICT and National Guidance for scrutiny with a strong caution to UCC not to start collecting fees until Parliament approves the regulations.
Section 93 of the UCC Act, 2013 states that, ‘the minister may, after consultation with the Commission and with the approval of Parliament, by statutory instrument, make regulations for better carrying into effect the provisions of this Act’.
Anti-gay Bill Will Impinge Upon Universal Human Rights, Jeopardize Progress In Fight Against HIV/AIDS In Uganda-White House
The White House and the European Union (EU) have joined the United Nations (UN) and other human rights groups in condemning the just passed Anti-homosexuality Bill.
The Bill that awaits assent from the president was passed by MPs on Tuesday night after a seven-hour heated session.
The bill introduces stricter penalties for people engaged in same-sex activities in Uganda including the death penalty for aggravated homosexuality.
It also proposes life in prison for the offense of “homosexuality” and up to 10 years in jail for attempted homosexuality.
Now White House press secretary, Karine Jean-Pierre says the Bill is one of the most extreme laws targeting homosexuality in the world.
She warns that this will not only impinge upon universal human rights, jeopardize progress in the fight against HIV/AIDS but will also deter tourism and damage Uganda’s international reputation.
“We have great concerns with the passage of the Anti-homosexuality Act by the parliament of Uganda and increasing violence targeting LGBTQI+ persons,” Karine said.
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