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VC4Africa works to crowdsource the due diligence process

Due diligence is one of the limiting factors for those interested in investing in Africa. It simply costs too much to find genuine entrepreneurs with a solid business idea and plan. As a result, most existing funds seek larger deals and better margins. At the same time MicroCredit is limited in its ability to support high growth businesses and leaves most entrepreneurs with potential standing on the sideline.

VC4Africa works to leverage the power of the crowd, the idea that anyone anywhere in the world should be able to positively contribute to the development of African businesses in some meaningful way. We essentially lower the barrier to entry and successfully engage thousands and eventually millions of people in a process that celebrates Africa’s potential. We also believe that crowdsourcing intelligence generates better results while facilitating invaluable interaction and knowledge exchange.

We make use of PlanCruncher.com to create a standard one-page summary of a business plan for a start-up company that is looking for external investment. Entrepreneurs do this by choosing icons that represent some of the standard answers that a business plan must provide. We integrate these one page ideas with aggregated content from social networks like Linkedin, Facebook and Twitter to measure the depth and commitment to the business. The summary of information allows members to engage the entrepreneur in meaningful dialogue, asking questions, exchanging knowledge and scoring the project in the process. Our algorithm aggregates the sites activity and qualifies the input that is needed to rank the projects per country, stage of investment and sector. The output is a dynamic Digg.com style feed that sees the best projects rise to the top of their respective field so we can connect them with capital.

Many entrepreneurs have great ideas and solid business plans. That said, most private capital remains risk averse. In unlocking Africa’s investment potential its important we get the ball rolling and start producing more success stories. Case studies that exemplify the opportunities and potential, but also serve as a road map for others. More importantly, VC4Africa works to establish a pipeline of interesting business opportunities and make them accessible to an international network that might be able to assist them in some meaningful way at whatever stage of development they might be.