Kinyungu Ventures, an East African venture advisory firm has published a white paper, titled Chasing Outliers: Why Context Matters for Early Stage Investing in Africa. According to the report, there is a “wide misalignment between traditional venture capital models and the African market.”
Paper recommends investment structures and approaches tailored to African operating conditions
Tony Chen, Managing Director of Kinyungu Ventures and co-publisher of the report comments on its findings.
“Capital in Africa is scarce and pursuing a “growth at all costs” strategy where capital pools are shallow presents huge risks for companies. We’ve also found that many great businesses don’t fit the typical VC profile, but have tremendous unfulfilled potential”.
The findings of the in-depth report were gathered from 100 Pan-African founders, investors, limited partners across 15 African countries.
According to a press statement by Kinyungu Ventures, a broader approach to institutional investment must be implemented in Africa.
“‘…the research suggests investors should prioritize investing structures and practices that reflect the realities of operating in Africa. This includes adopting more flexible investing structures with longer time horizons.”
Why the VC cut-and-paste method must change
The white paper has Click here to read entire article
Source:: Venture Burn
