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Young entrepreneurs & small and medium-size businesses hold the key to growth in Africa

By Ashish J Thakkar on January 6, 2014


This article by Ashish J. Thakkar was originally published by the World Economic Forum and is republished with permission.

“The key solution for creating jobs and generating renewed economic growth on the continent is to empower African youth and entrepreneurs to turn great ideas into a reality” writes Ashish J. Thakkar, Ugandan-born Founder and Managing Director of the Mara Group and Mara Foundation. “Entrepreneurship is the answer to Africa’s many challenges”.

Today, I believe Africa is the single most exciting place in terms of opportunities. The continent is not only experiencing its longest boom for 30 years but, according to International Monetary Fund forecasts, seven of the world’s 10 fastest-growing economies for [...]

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The biggest wealth-generators for Africa’s billionaire and millionaire entrepreneurs

By Douglas Imaralu on January 2, 2014


This article by Douglas Imaralu originally appeared on Ventures Africa, a VC4Africa publishing partner.

“Don’t come to Africa and help, come and make money,” said Mo Ibrahim, Africa’s pioneer telecoms billionaire. As its economic promise continues to take shape, so Africa is churning out millionaire businessman after multi-million dollar business. But just how are these super-successful tycoons amassing their riches?

Over the last decade or so, we have witnessed the blossoming of the knowledge economy. The software and technology sectors have taken off, birthing a new breed of billionaire – Steve Jobs, Larry Page, Mark Zuckerberg – and cementing their viability. While this has made many exceptionally prosperous, it has not been a major source of [...]

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To a new year full of African success stories! The VC4Africa community in 2013 & the year ahead

By Ben White on December 30, 2013

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What started as a conversation between like-minded professionals continues to grow as a thriving community dedicated to African venture finance. VC4Africa members had a busy year as the community continues to push the boundaries and redefine what is possible in the African startup space. Here is a look at a few major highlights from 2013 and a look forward to what 2014 might bring.

Growing Africa’s startup community:

 

» 13,000 members: Today there are 13,000 entrepreneurs, mentors, investors and business professionals part of the VC4Africa.biz community spread across 159 countries. There are 45,000 fans on Facebook, 25,000 followers on Twitter, and 10,000 connections on Linkedin;

» Improving ventures: To date, VC4Africa has processed more than 1,500 venture applications and published 900 venture profiles to the website. These [...]

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Three questions startups in Africa need to ask themselves

By Dikachim Nwankwo on December 27, 2013


This article by Dikachim Nwankwo originally appeared on TechCabal, a VC4Africa publishing partner.

“Are they making any money or do they have plans of making money?” I just want to put down my thoughts on the question I hear often within Nigerian tech circles whenever any startup is mentioned. Whenever I hear that question, three more questions come to me. Are they adding value? Where is the innovation? Are they building what they think users want, or are they building what the users actually want?

I’ll explain.

1. Are they adding value?

As straight forward as this seems, it’s not. So you want to sell bus tickets online? Were people looking for/will people look for bus tickets online? You want to sell caviar to rich men. Do you think a rich [...]

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From Africa to Silicon Valley – representing African companies to global investors

By Maxwell Donkor on December 25, 2013

This article by Maxwell Donkor originally appeared at LIONS@FRICA and is published with permission.

Maxwell Donkor, founder and CEO of mPawa, participated in the 2012 DEMO Africa event in Nairobi, Kenya. He was chosen, out of 40 entrepreneurs, to travel to Silicon Valley to participate in the 2013 Fall DEMO launch event in San Jose, California along with innovators from around the globe. View Maxwell’s pitch HERE. His firm – mPawa — is a mobile job matching application developed for blue-collar recruitment in Africa. mPawa leverages the power of mobile technology to quickly connect employers to well qualified job seekers and workers to jobs.

It’s hard to put into words how exhilarating Silicon Valley can be for a tech entrepreneur. The 1,000 square mile area which [...]

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Why companies in Africa should sell to the global market

By Fritz Ekwoge Ekwoge on December 23, 2013


This article by Fritz Ekwoge originally appeared on TechCabal, a VC4Africa publishing partner.

I’ve spent three years running a Cameroonian startup, carving my niche with B2C products for the African market. This is what I have to say. I think developing for Africa sucks right now for small to medium-sized companies. It had not always sucked. But right now it does.

A few years ago, the African market was a very lucrative market for the average zero-funded entrepreneur. The African market has always been plagued with poor infrastructure, corruption, limited skills, poor education, poor government support and many others. But even with limited branding and advertising budgets, the typical African entrepreneur had the advantage of being local. Being local meant that we could carve our niche in a [...]

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Valuation tips: an introduction to the Aswath Damodaran approach to valuation of startups in Africa

By Jerome Kisting on December 20, 2013


Investor and VC4Africa Pro Account member Jerome Kisting of Baobab Capital gives an introduction to the The Aswath Damodaran approach: a systematic valuation approach that removes some of the uncertainties in valuations, by taking the long way to estimate the unique characteristics of a startup or growth company. The estimation approach used by Damodaran is a great way to really understand your business and the industry in which you operate.
 Also see Jerome Kisting’s introduction to different valuation approaches for startups in Africa published earlier this week.

Disclaimer: The Aswath Damodaran approach explained below is quite technical and may require entrepreneurs to solicit financial expertise. Keep in mind that there are workarounds to everything as long as they can be plausibly substantiated.

The Aswath Damodaran approach to [...]

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Valuation approaches for startups in Africa – Tips from an angel investor

By Jerome Kisting on December 18, 2013

How to specify valuations of African startups? We’ve seen a number of contributions on the VC4Africa blog go into this question. Is valuation more of an art than a science? In the VC4Africa Crash Course on writing a financial plan we suggested looking at future expected profits and losses. And Jason Njoku suggested using some rules of thumb, and watching out for ‘sharks’

What do members of the VC4Africa Investors Network think? Below investor and VC4Africa Pro Account user Jerome Kisting of Baobab Capital discusses some valuation approaches that can be used for startups in Africa. He has concluded not to use the VC method, Discounted Cash Flow or Relative valuation, but the ‘Aswath Damodaran approach’. Watch out for more info on this approach in [...]

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Sharks, Seeds, Angels and speculation – on valuations and deals in Africa

By Jason Njoku on December 16, 2013


This article by Jason Njoku originally appeared on Jason.com.ng and is republished with permission.

In 1954 one of Hollywood’s greatest artistic geniuses, Walt Disney, had a fantasy. Disney dreamed of building a giant amusement park unlike anything that existed in America. His chosen site was on 160 acres of farmland in Anaheim, an area southwest of Los Angeles settled by German immigrants. The problem was how to find financing for his project. His brother Roy Disney didn’t support the idea and the banks scoffed at Disney’s projection of a million visitors a year going through the turnstiles of the Magic Kingdom. William Paley and David Sarnoff both turned him down because they [...]

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Nigeria: Entrepreneurs and investors discuss the VC climate for local startups

By Bankole Oluwafemi on December 13, 2013

Jason Njoku, iROKO Partners and SPARK, and Tayo Oviosu, Paga.

This article by Bankole Oluwafemi originally appeared on TechCabal, a VC4Africa publishing partner.

Last month, Nigerian tech blog TechCabal hosted the first of its “TechCabal Sessions”. Read the recap below. Tayo Oviosu, founder and CEO of Paga, served as ‘special guest’. Paga was launched in 2011 and is now the #1 mobile payments company in Nigeria. Other participants included iROKO Partners & SPARK‘s Jason Njoku, Prowork‘s Francis Onwumere, Hotels.ng‘s Mark Essien, and many other interesting people. The TechCabal Sessions are exclusive dinner events where influential personalities in Nigerian technology, internet, business, meet over great food and drinks in a relaxed, informal setting. TechCabal aims to help create a more cohesive startup ecosystem by fostering [...]

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