What is the value African startup funding portal VC4Africa creates and how is this relevant to international angel investors? Read the interview below!
Dr. Stefan Shaw is a manager based in Munich, Germany who recently joined the VC4Africa community as an Investor Pro Account user. “My wife and I have decided to dedicate a percentage of our income to social impact in Africa. Instead of supporting aid projects, we want to support businesses in Africa that are sustainable regarding both social impact and financial performance,” he shares.
Why did you join VC4Africa?
“On my quest to find businesses that meet those criteria and are raising capital I stumbled upon VC4Africa. Over the past months I’ve been using the platform to identify ventures that fit our profile. VC4Africa saves me a lot of time and effort and also integrates me into a community of the likeminded.
Personally I believe that investing instead of donating is not only more sustainable for the receiving party, but also more sustainable for the party providing the money. Investment in a good cause can create a bond to the social impact venture that’s probably stronger and lasting longer than the bond created by traditional donations.”
Do you see it as risky to invest your private savings like this?
“Yes, of course, it comes with some risk, but my wife Rose and I are getting a lot in return: Direct access to the founding team, becoming part of their business story and of course the chance of becoming a contributor to a business that eventually will change the life of a lot of people for the better. Isn’t that worth risking something?”
What do you see as the key points to look at in deal screening?
“I’d say it’s team, team and team. We are looking at the people who run the businesses and try to understand their values. If they correspond with ours this is a major step towards getting involved. Above all I find honesty regarding things that haven’t worked out so far especially important in order to understand both how the business works and also how the team deals with failure.”
Could you tell us about specific connections with entrepreneurs you’ve made so farthrough the VC4Africa platform?
“I am corresponding both with Adam from Karibu Solar Power and Gwen from Soko on a regular basis. This gives me a very good understanding of what they are up to. I am very fond of having this kind of access to change makers.
My wife and I instantly liked the model of Karibu Solar Power because it combines a good product with the enablement not only of the consumers but the enablement of the people selling the product on the ground. I believe that we have to support genuine businesses in Africa that eventually generate their own momentum. Karibu has the potential to make this happen.
We decided for Soko because we really admire their business model, and they provide a very good case to show our kids and others how you can do good: Soko’s business model is easy to understand and their products are very appealing.”
How do you hope to see your investments develop?
“We hope that our investments in Africa, both Soko and Karibu Solar are five digit involvements, at least keep their value for the years to come. If the businesses take off and there’s a solid dividend after say five years, we’d be happy. Wherever I can help to gain traction I will do so. And if the investment pays off, say a large party makes a significant friendly take over offer, we would be happy to cash out and re-invest other smart African social business startups.”
What kinds of other investments are you still looking for, and what are your
suggestions to other entrepreneurs on VC4Africa?
“The proposition needs to show the potential to do business in Africa and at the same time develop sustainable solutions to current social problems. I actually have no preference regarding industry or business segment. Crucial to my choice is the quality of the team. We have had excellent experiences with women running social businesses, so when we see a woman heading a team of social entrepreneurs we certainly take a good look at what they are doing.”
What do you want to reach with your investments in the long run?
“We want to contribute to self sustaining businesses in Africa that help develop the countries of the continent to become prosperous and independent of the international aid industry, that until now seems to have done more harm than good. Whatever money we make of our investments we will re-invest in Africa. So of course we hope it will be tons.” (smiles)
What would you recommend to other investors who are wondering what VC4Africacan do for them?
“If you want to invest in Africa and you cannot afford extensive research because you don’t have the personal resources nor can afford someone who does this for you, VC4Africa is the community to join. Here you’ll find investment opportunities within minutes that without VC4Africa would take you weeks if not months. The first step to create impact in Africa is to register to the Pro Account. It gives you access to a lot more useful info, and by paying the Pro fee you can make sure that VC4Africa has the necessary means to continue its valuable work. My wife and I wouldn’t have connected to Karibu and Soko if VC4Africa wasn’t around!”
VC4Africa is the continent’s leading startup funding platform. See VC4Africa’s investor services to get priority access to Africa’s leading SME entrepreneurs. Join as an entrepreneur to follow 5 simple steps to fundraising on VC4Africa, get access to VC4Africa’s Mentorship Marketplace and more!