Angel investing in Africa is in its very early days, and requires further education and support for investors for the ecosystem to grow, although this is unlikely to come from governments, according to the African Business Angels Network (ABAN).
Disrupt Africa has reported over the past months ABAN has hosted three angel investor workshops around Africa, in Lagos, Nairobi, and Cape Town; under the theme of “unlocking capital for early stage investments”.
With the events successfully concluded, ABAN has compiled a number of learning points to take away from the initiative, based on a survey of workshop participants.
The overall conclusion drawn from the workshop series is that angel investing in Africa is still in its very early days, and individual and group-based investors alike would like to have more support, education and guidance as the ecosystem takes shape.
51 per cent of the surveyed participants said they have already invested in African companies, while only 10 per cent has already invested in more than five companies. 41 per cent are planning to start investing.
While participants unanimously referenced Africa’s enormous wealth, the practical challenges faced in working to unlock this wealth as investment capital were also cited as a key issue.
In order to grow the ecosystem, the conclusion of the workshops is that heightened collaboration is needed, in the form of partnerships and local investor networks – which are currently limited. A majority – 56 per cent – of the participants in the ABAN workshops are not part of any investor network currently.
Participants also called for a better platform interlinking the various elements of the investment ecosystem, as well as increased networking opportunities for investors to meet each other and collaborate.
Calling for increased education, guidance and support for the angel investing community, ABAN has also concluded that this is unlikely to come from African governments. According to the participants, governments only play a marginal role in supporting entrepreneurs and incentivising investors, and the overall view was that this is unlikely to change in the foreseeable future.
On the other hand, the workshop participants felt that given the diverse nature of African countries, pan-African training or research efforts would be ineffective; rather local home-grown initiatives should be the focus.