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Crowdsourcing a global movement, an online marketplace for African startups

The Venture Capital for Africa (VC4Africa) community is dedicated to supporting the growth of Africa’s start up ecosystem. The network building organization started in 2007 and has grown organically over the years, but always with the sole aim to support promising entrepreneurs with the potential to build high growth high impact companies on the continent.

Leveraging technology, operating as a scalable virtual network, it is possible for VC4A to engage hundreds of thousands of individuals with only a small team and comparatively few resources.

Only 15% of the 400 million micro, small and medium enterprises (MSMEs) in developing countries have access to credit. The unmet investment need exceeds $2.5 trillion, in part because physical bank branches are inaccessible, investable ventures have high search costs, and banks, investors, and business ventures do not trust one another.

This dynamic creates an early stage “vacuum” in which a large number of potentially thriving, innovative companies are either constrained to be micro-enterprises, and hence have a limited impact on economic growth and job creation, or don’t come into existence at all. This tends to shut out promising entrepreneurs in the sub-1 million financing range indiscriminately, or raises the cost of capital to prohibitively high levels—above the already-high rate of return on capital exhibited by many SMEs—making financing and hands on support uneconomical.

Digital crowdsourced lending and investment platforms can match SMEs with small investors and the soft capital support they need. An initiative like VC4A connects investors, mentors and program managers to pre-screened, seed-stage African start-ups via its digital platform, lowering search costs and trust barriers. Start-ups gain exposure to a global network of investors as well as mentorship and program opportunities. Entrepreneurs have direct access to a robust marketplace and growing offering of support mechanisms. The platform is particularly helpful for start-ups operating outside of Africa’s “Tier 1” cities like Nairobi and Lagos, where there is less network, physical infrastructure, support programs or local venture capital available.

Core to VC4A are starting African entrepreneurs that have the potential to build high growth high impact companies. An example would be an entrepreneur building mobile testing units for expecting mothers needed to treat them in their homes, or an entrepreneur launching a micro payment system that allows customers to purchase electricity with mobile airtime. See for example ventures trending in the renewable energy sector.

VC4A offers these African start up founders a robust support system where they can find a community of like-minded founders. Entrepreneurs that list a venture profile on VC4A are able to build up a dedicated following, have the ability to recruit talent, apply for mentorship support, and (when they meet criteria) register fundraising campaigns. At the same time founders gain access to free online learning tools, can stay up to date on important news and events, and are able to apply to programs offered by VC4A’s growing network of partners. As a result of the community’s efforts, entrepreneurs listed on the platform have been able to receive business advice from leading business experts around the world, recruit new talent for their teams using VC4A Jobs, and have gone on to raise more than USD 73 million to date.

In turn, this growing community of entrepreneurs increases the visibility of Africa’s burgeoning start up scene globally, and where VC4A has facilitated more than four million page views to date. The information and data aggregated is also available via API and can be used to build further insights into emerging trends. Increasingly would be mentors, investors, program managers, academics, media professionals and many other stakeholders recognize VC4A as an efficient channel to connect with promising founders from across the continent (members registered in 159 countries). As the community continues to grow, it becomes increasingly easy to link a global network of individuals. For example, Rodrigue Fouafou, a Cameroonian born Angel Investor living in Canada that writes, ‘Using VC4A we have made three investments and pre-selected dozens of potential ventures to invest in. The platform is at the center of a prosperity and wealth creation process that is just beginning. It seems just a matter of time before everyone in the world will be aware of the opportunities that are present in Africa.”

Not yet part of the community? Sign up today as an entrepreneur, support great startups by engaging the mentorship program, or consider joining VC4A’s network of investors. If your organization is in the business of supporting startups check out our network of partners and set up pages to profile your own programs. We invite you to take an active role in building the next generation of great companies working to transform the continent.

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