Savannah Fund: Be the change you want to see in the world... - Afrinnovator
Readers will now be familiar as to what I’ve been up to for the last year. I launched Savannah Fund, an Accelerator and Seed Fund, with my partners Paul Bragiel and Erik Hersman, at Pivot East Conference a few weeks ago.
Global press has reacted quite favorably to our announcement. And I am excited as to what this means for the ecosystem- lets examine the fallout in the past 2 weeks:
Media reaction bodes well for Africa tech reporting: First, I loved that Techcrunch, the leading tech blog started publishing more Africa stories following our announcement, picking up on the small headline error of Savannah Fund being the first accelerator in Africa- I decided to give the earliest interview at 6am on the day of the announcement to Pando Daily because Sarah Lacey was more interested and had been to Africa- TechCrunch’s Mike Butcher did a great follow up- more tech reporting on Africa is needed, although one of TechCrunch’s posts on the growth of smartphones in Africa was a bit optimistic :)- showing the weakness in not having context and experience on the ground in Africa and rely on public numbers too much to try connect up trends. Next, our friends at MEST also graduated their latest class and bathed in the Africa tech press limelight- yes, Ghana does pack quite a punch and I expect awesome entrepreneurs with great ventures coming from there. In short- the tech media eyes of the world are increasingly watching this space – not just the international development or (ICT4D) community. Although I do credit the thenextweb.com as being quite visionary in covering the scene at scale early.
Evolving the Early Stage Tech Funding Ecosystem and bringing it to Africa: If it wasn’t enough, Intel Capital announced that it too was entering the VC space in Africa. The more players the better for the ecosystem and I am just pleased that more pure tech VCs are entering- because I strongly feel that however well intentioned impact investors are- many of them have never coded or lived a tech venture (exceptions to Omidyar Network and others).
I have blogged about the funding ecosystem extensively in past, so now you know why I was, it was constantly in my mind. A lot of my posts were designed to help African entrepreneurs understand and decide between the different funding options. From Angel, VC to grant financing. But let me tell you the story from my point of view at 50,000ft:
First, Venture Capital is actually straying away from its traditional roots of funding risky startups- hence my first popular post on “Are VCs and impact investors taking enough risk?”- the fact that VCs are behaving more and more like late stage financiers is what really bothered me from last year’s Pivot conference and was the starting thesis for putting together Savannah Fund. You only have to look at the fact that Fanisi Capital invested in Hillcrest schools to realize that they are not a pure tech VC like I thought they were.
Second, my experience at i/o ventures watching 16 startups get funded with 4 exits gave me front row seating in what I saw as the coming disruption to early stage VCs in Silicon Valley and how this has rapidly been accelerating across the world- particularly with the appetite and interest from i/o ventures and even 500 startups to see what was going globally including Africa and arranging the mentor trips I lead to Tanzania and Kenya to better understand the ecosystem before diving in as investors- we were patient and learnt a lot. Paul Bragiel visited Africa 4 times in a year including being there on the inaugural day of South Sudan hungry to help them in any way possible! Angel investors were becoming more and more organized and taking real risks (check out angel list) and with less capital under management and not having to answer to limited partners who want returns from their billions they want to put to work. As VC Mark Suster puts it well in his chart- the collapsing cost of internet startups coupled with the fact that now developers/engineers were best positioned to start tech companies, people in suits are no longer able to communicate and add value to early stage developers in jeans hanging out at co-working spaces. Cloud computing and opensource tools have leveled the playing field. This is why Paul and I chose to partner with Erik at the iHub- they are investing in these skills for developers around the iHub to benefit from.
It should be clear that startups need much more than money as its no longer the differentiator- they need a partner who can help them hire more developers, help them scale a tech product from 1M to 10M and speak directly from experience- I credit Founders Fund’s Sean parker and Peter Theil for starting this wave. As a Stanford MBA, I used my experience quite minimally at i/o ventures- I had to get back to my roots as an engineer and be able to deal with more human issues in startups like when a cofounder gets fired and half the startup value walks out the door- in short, a focus on judging people and team dynamics replaced my quantitive analysis and strategy skills at the very early stage. I also worked with about 20 countries from Netherlands, Brazil, Malaysia, Singapore, Canada and Africa to understand the global implications of my work- I gave countless tours to “international delegations” to our workspace at i/o ventures whilst working on the deck for the fund. As such, the 2 years at i/o ventures were invaluable experience in helping me bridge the gap to Savannah Fund. My experience working in parallel at YellowMasai where I acted as CTO and Head of Product, raised angel financing from a local Tanzanian also heavily informed my experience as to what is needed from the investor side in early stage Africa tech ventures. I of course used that MBA skill set later on when putting together and now to manage the fund, including pitching to over 250 investors to get going- I eat private equity books for breakfast :).
Which leads us to Savannah Fund and what makes us different: We deliberately set up a small fund so that we can focus on the early stage, because raising a bigger fund means putting more capital to work which means bigger deal sizes and straying away from our goal- as such we are more like an angel group or “micro VC” as is the popular term- frankly, the whole space is changing fast which provides ample opportunity to define what we want to be. It also means we can tap visionary individual and angels to act as value add investors and mentors to our companies through savannah fund as a platform- I know they can’t wait to come help in Africa, as well as involve local mentors who have been afraid to get involved alone and can gain from the knowledge and experience from Silicon Valley. These factors I believe are what makes Savannah Fund unique in the landscape:
- We are fund by entrepreneurs for entrepreneurs
- We focus squarely on the early stage by bringing the accelerator model AND providing follow on or independent seed funding.
- Two of the partners are on the ground full-time. We have no investment committee so we can make rapid decisions and hands on due diligence and value add once we make an investment.
- We have direct links to Silicon Valley’s top investors and entrepreneurs to act as potential co-investors and mentors- we are the “pipe to Silicon Valley” should you need it.
- We see ourselves as playing a role in catalyzing local investors who want to get into tech angel investing to continually fill this gap. We want to work with folks who truly understand tech’s transformative power to generate economic growth.
I inserted 2 predictions related to Savannah Fund at the beginning of the year in my most popular blog post to date 12 predictions for Africa tech.
7 ) Rush and stumble to Invest in Africa Tech..
8 ) Rise of Angel & Seed investing “Sea Turtles vs Residents”…
“The only way to predict the future is to create it”. Or as Gandhi once said: “Be the change you want to see in the world”.
Now time to find Africa’s best and visionaries entrepreneurs and support them. We welcome our first class in our accelerator for September- please apply. Or connect with us on angel list if you have a more mature startup.