Would the Real Venture Capitalists Please Stand Up?

I was perusing the pages of one of this month’s editions of Forbes Magazine and came across an interesting article that speaks to the core of our mission at Beacon Worldwide. I have always found it fascinating that even though the world’s communications mediums have allowed us to link ideas and cultures closer together we have not maximized the usefulness of this idea-exchange to further the spirit of entrepreneurship towards third world countries. We have all seen the images devastating earthquakes in Haiti, mudslides in South America, tsunamis wiping away thousands of homes in Sri Lanka in the past decade. Lots of money from wealthier nations like the U.S. are poured into these countries to aid in the suffering. But in the end, this money is a palliative measure, not a cure. The systems of government in many of these countries exist only to survive, not to prosper their people. It takes money funneled to specific entrepreneurs in these nations to even begin to make a difference. That’s why Beacon Worldwide accepts donations and portions of Beacon Imports sales to channel the money towards microlending to nations with little financial infrastructure. With overseas financial partners, these loans help aspiring entrepreneurs start and build businesses and ultimately better lives.

I would encourage you to check out Mfonobong Nsehe’s blog “The Africa Chronicles” at blogs.forbes.com/mfonobongnsehe. I’d also invite you to take a look at our Kiva page to see first hand the difference that Beacon Worldwide is making through our generous donations and through our sales at Beacon Imports.

Why Google May Never Produce a Facebook, Groupon or Google

- by Mfonobong Nsehe (April 7, 2011)

Africa has its own Mark Zuckerbergs, Andrew Masons, Mark Pincuses, Larry Pages and Sergey Brins. But it lacks its own Yuri Milners, John Do­errs, Vinod Khoslas and Y Combinators.

There are many entrepreneurs out there waiting to break through, but their ideas might never see the light of day because of a lack of seed finance. Africa is undergoing a technology renaissance. More than ever before, the population is becoming more technologi­cally inclined, more Web-dependent. With the right fi­nancing our entrepreneurs can put Africa on the global map of technological innovation.

But until its financiers and the self-proclaimed "venture capitalists" are easily accessible and listen to these entrepreneurs, Africa may never have its own answers to such internationally famed corporations like Google, Facebook. Zynga and the rest of them. Africa needs several Y Combinator-type firms who will believe in and support the dreams of entrepreneurs and get those big ideas out of the boxes and into the pages of history. Africa's techies are equally as smart, gifted and visionary and if supported can transform big ideas into moneymaking, world-class companies that'll change the world.

So, will the venture capitalists please stand up?

Here are some of the responses that the article elicited:

MBWANA:

There are several VCs in Africa. From East Africa Capital Partners to Fanisi Capital.

I think there are just not enough angel investors willing to take that first-stage risk to get these entrepreneurs to the next stage. Entrepreneurs need to prove traction and a clear business model for lO-lOOX returns for the African VCs

to invest. What Africa lacks is an established tech ecosystem that Silicon Valley has that means success stories fund the next generation.

HIGHHEELEDTRADERS:

My guess is that it will be the Chinese capitalists who will come to African "diamonds in the rough," just like what they are doing with the oil and mining assets.

KOLIOBI:

I totally disagree with the premise of this article. It doesn't take "African" investors to fund "African" start~s. African startups should and will source funds globally. With the ascent of on­line funding sites like Angellist, access to funds will be further democratized, irrespective of a startup's physical location.

MFONOBONG NSEHE RESPONDS:

Koliobi, there are quite a few African-based VC firms. I'm familiar with avca-africa.org, but the companies listed there are private equity firms. There are no firms there that provide seed capital to tech firms.

Also, I never insisted that only African VCs should be the ones to fund African startups. I'm actually for the idea of VCs from any country funding African firms. It'll even

be better because these other guys tend to be more experienced in tech business than African VCs.