Published on June 6th, 2012 | by Jesse Oguns1
Now, there is money, where are the innovations that need funding?
Ideas are worth a dime a dozen. – Unknown
Ideas change the world, yes. They change the world only when they are well executed and respond to certain needs. One of the barriers that many developers and tech entrepreneurs have spoken of is lack of funding. Events unfolding have point to the fact that folks have started showing interest and there are funds ready to be invested, not in an idea, but great products and services.
The Tony Elumelu Foundation partnered with Co-creation Hub to invest seed funding into 20 different start-ups that are incubated with them. This investment is for experimental proof of concept, similar to what Ory Okollo mentioned that Investors should do–take chances with some ideas. They did this for free in exchange for a first right of refusal.
During one of the Mobile Monday Nigeria some months back there was pitch Monday, where those building technology products were given the opportunity to pitch their services and some willing investors were in attendance.
Report reaching me has it that the co-founder of Ushahidi and iHub is co-founding a Vencture Capital company called; The Savannah Fund. Savannah Fund is a seed capital fund specialising in US$25,000 – US$500,000 investment in early stage high growth technology (web and mobile) startups in Sub-Saharan Africa. They will be providing the fund and a network of mentors that can help funded initiative to grow and do well.
There’s an initiative called ‘Umbono’, Google and angel investors will provide a team of startup tech entrepreneurs with ground-breaking ideas in mobile and web technology, seed capital of $25,000 to $50,000, mentorship from professionals, local business connections, office space and unlimited bandwidth for a six month period – the perfect coup for a startup tech entrepreneur.
There are more in other parts of Africa. This is going to be giving birth to more people with money coming together and putting together funds for startups that are doing something interesting and that has potential to scale.
The ecosystem in Africa is being formed. The ecosystem will be formed around innovation hubs, venture capitalists, angel investors, developers and entrepreneurs. For now there seems to be fewer quality ideas than the funds that are available. But, is that the only problem?
Ory Okollo of Google Africa in an interview on Forbes mentioned a trend that is not nice happening around Africa where folks that have money—investors—are turning into Vulture capitalists. Hear what she said;
“…the investors in this part of the world could also be very exploitative. We have a lot of vulture capital as opposed to venture capital. The investors currently available offer terms the entrepreneur can’t even accept. You’ll see an investor offering an entrepreneur $25,000 or $50,000 for a 50% stake in a startup venture. That’s vulture capital.”
As the technology ecosystem emerges these are going to be some of the challenges we will be swimming pass. It is important as a startup entrepreneur to know more about the ecosystem, the opportunities and the challenges and how to survive it. While you are at it know that more money are going to be available to innovative ideas that can go to market.
If you are working on something and you want me to take a look at it, drop me a mail jesseoguns [at] otekbits [dot] com
Image by Tony Dowler