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On
the heels of a successful launch at the World Economic
Forum at Davos, Toon den Heijer, Executive Director
of the Venture Capital Fund for Africa, shares their
vision, and explains why the time is right to invest
in Africa
The Need for Venture
Capital in Africa
Developing entrepreneurship and stimulating SMEs are
proven means of generating sustainable growth and
returns. In Sub Saharan Africa, there is an increasing
supply of fast-growing SMEs that are too large and
mature for micro-financing, but not large enough for
private equity. Venture capital is an established
investment tool with a credible track record of starting
and growing businesses and generating employment,
yet the true VC experience is very limited in Africa
and almost non-existent outside South Africa.
"The key to success
of the fund is a differentiated investment strategy",
says Toon den Heijer. "The Venture Capital Fund
for Africa will invest on a commercial basis in fast
growing SMEs in sub-Saharan Africa and provide the
entrepreneurs with hands-on guidance through a network
of experienced mentors and specific industry expertise
through the investor base of international corporations."
Entrepreneurship Foundation
The effectiveness of Venture Capital Fund for Africa
rests on two pillars: the VC Fund and the Entrepreneurship
foundation. The foundation focuses on stimulating
and developing entrepreneurship, through business
plan contests and workshops, and provides technical
assistance towards the portfolio companies.
Investors
The Fund addresses motivated investors from both the
private and public sectors. The target fund size is
50 to 75 million. The founding investor
is TPG NV, the leading 12 billion Mail, Express
and Logistics company. The Fund will provide long term
equity financing from 100,000 up to 4 million
over the lifetime of a company. The core of the operations
will be in Africa, with initial investment focus on
East Africa and South Africa, and headquarters being
in Kenya, Nairobi. The Fund will invest on economic
criteria and optimize returns by building on the crucial
elements of VC investing: a stable investor group with
a long-term view, a team that focuses on people and
acts as critical support and sounding board for the
entrepreneur, a thorough understanding of local, regional
and global market needs and by investing in outstanding
entrepreneurs. In addition to solid financial returns,
the fund will deliver significant social returns such
as diversification and growth in local/regional economies,
as well as job and wealth creation.
For more information: http://www.vcafrica.com
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Ariadne
Capital Journal - Through the Maze Volume
5, Edition 1
