Africa native and investment advisor Eric Osei gives a summary…
The number of visible Angel investor groups, networks and initiatives doubled last year, from 20 at the end of 2015 to over 40 across 25 African countries – and 2017 is set to build on this, writes David van Dijk, co-founder of the African Business Angels Network (ABAN).
ABAN, formally established as a non-profit organisation in 2015, has been one of the pivotal drivers behind this growth. Our mission has been to increase the quantity and quality of Angel groups and investors active in African early stage investment markets.
We’ve organised, co-organised, supported and addressed dozens of events since ABAN’s formation, and in 2016 more than 500 established and new investors based in Africa participated in ABAN masterclasses and bootcamps.
Here’s some of the lessons we’ve learnt (or have been reinforced) over the past year:
- Angel investing in Africa is in its infancy; there is still much work to be done to introduce potential investors to the concepts and best practices of early stage investing
- Co-investing is critical to moving Angel investing forward faster. This is a vital mechanism in risk reduction, more shared learning and on-boarding first time investors
- Inspiring events are the number one way to draw communities together, allowing investors to make relevant connections
- ‘For Investors By Investors’ is a format of knowledge-sharing that is set to grow, resonating with established and prospective Angel investors
- Funding is only one aspect of Angel investing. Contributing relevant business acumen and market access to a start-up are just as important. This makes angel funding ‘Smart Capital’
- Corporate CEOs and successful founders in Africa are in prime position to become Angel investors. Introducing them to early stage investing will be key for the future
- There is still a long way to go before anyone expects national policy makers to introduce incentives for Angel investing in Africa
- It is crucial that both Angels and founders are aligned with similar values, expectations and a common end goal
- Comparative to the US and Europe, Angel investors in Africa need relatively little capital to be notable players in the market; this presents a real opportunity for new and small players in the US and Europe to have a superior market position by relocating to/focusing on African deals
- Increasing interest and involvement from the African diaspora Angel Investors
- Angel Investing in Africa is a long-term game and there are very real challenges to doing business
Looking ahead to what 2017 has in store, ABAN has a busy year lined up; assisting as many investors, groups and networks as possible with realising their Angel investing potential. Masterclasses, Bootcamps and the 4th African Angel Investor Summit will all take place in the second half of 2017.