I am open to initiatives to create awareness of VCs and Angel Investors in SA and Africa.

Via http://www.startupafrica.com ofcourse…

Keep well

Related to this, I saw the following hit my inbox (and noted the Afrigator mention, now that I have a mental connection to it!):
–snip–
“How to Raise Capital for Digital Start-ups” Vinny Lingham

We all know about Mark Shuttleworth, but dig deeper and you’ll find a stunning list of South African digital successes, like Mxit, FireID, Psitek, Clickatell, as well as a whole host of newcomers like Afrigator, SpringLeap and Blueworld. It’s clear that there are loads of ideas coming through. What’s not clear is how to overcome the biggest stumbling block to seeing those ideas realised: raising cash! On Friday 29th of May, Silicon Valley-based South African entrepreneur, Vinny Lingham, will present his story of getting to 1 million subscribers to his successful online venture Yola.com. On the way, Vinny was successful in raising multiple rounds of funding, and will share some of his inside secrets.

Venue: 3rd floor, 24.com building, Foreshore, CT (directions here)
Date: Friday, 29th May 2009
Time: 5:30pm – 7:30pm
Cost to attend: S’free, but you’re welcome to burn to disk and hand in your world-dominating new media start-up idea upon arrival.

Book your seat: email Bev to book: bev (at) worldwidecreative (dot) co (dot) za
–snip–

That is the first thing they think of, hence less stimulation of brilliant ideas…?

Again, it’s my 2 cents worth.

I will gladly help create awareness of SA/African VCs via http://www.startupafrica.com – A dedicated page/section at least.

Just drop me an email. Nice talking to you Justin and Andrew.

I am happy to include http://www.startupafrica.com in an initiative to create awareness with regards to VCs/Angels Investors etc. Just give us a call or email.

Cheers, Justin and Andrew…

Yes I can see how the statement in the presentation was received and it’s unfortunate at the same time. What I did say to the guys in Nigeria was that while traditional VC was difficult to come by there certainly is investment available but mostly through Media companies.

We’re an example of that through the Naspers group, Blueworld another (also Naspers) and not to mention Zoopy through Vodacom.

I also know a number of online startups who managed to get traditional VC but again not from SA but rather abroad. Bid or Buy is one off the top of my head.

In addition, Vinny Lingham, someone I know very well is probably the biggest success-story in terms of raising VC and while he managed to get the VC from a South African owned VC firm it is an exception to say the least.

I think that in a way you and I are actually agreeing on the same thing. We both agree VC exists but SA VC for online startups is an exception not a norm due to the ROI for venture capitalists.

When you compare the state of VC to say the US (not such a good thing to do) you can see that their market looks for opportunities that don’t directly relate to revenue. In this market you have to show the compounded return and even then it’s not an easy sell.

When we were trying to raise money I spoke to a number of VC directly and even sat in a round-table discussion with some top VC firms with Vinny Lingham as well.

Everyone agreed that unless we had a global strategy we wouldn’t make it and I strongly disagreed with this logic. I am of the belief that Africa/SA is one of the most lucrative markets right now and will continue to grow yet this was a sentiment not shared by many.

I think what Khalil had to say is very pertinent. Most South African’s have no idea where to go to try and raise VC. It may exist but is not readily available and I have long been a pundit of trying to help change this.

I’ve run 6 different startups all self-funded and I wish I had known where to go to.

I’d love to sit down with you and chat more about this. It is something I feel passionate about and if we can promote this together I’d love for that to happen. In the end I want other entrepreneurs not to have to struggle to get their ideas into a highly competitive market.

How did you eliminate the possibilities that it was the idea or alternatively the management team presented to the VC’s?

I say this simply because if it were either of the above two possibilities, you could take a different idea and a different proposed team in and might have some success.

Saying “VC doesn’t exist for online start-ups that only have SA market potential” is also not true. I know directly of one and suspect I’d be able to find others by making a few calls.

You have however honed in on the problem: not offering sufficient returns.

If you can show an online start-up that can demonstrate sufficient return potential (70%-80% p.a. compounded on early stage start-ups, assuming you manage to achieve roughly 1 in 3 success rate), then one ought to be able to find money.

I agree that there is not nearly as much money as there should be, nor is the attitude of most South Africans as risk-preferring as it should be and for these reasons I’ll be making part of my mission communicating to people how best to develop and fund ideas in ZA, be it via VC’s such as our fund or any other ways.

I’d love for you to be able to attend the next BarCamp Nigeria and tell the guys that there are least 5 different people in ZA that are willing to fund innovative tech ideas, be they online or otherwise, and “these are their key parameters”.

@Justin – yes I would like you to be proven wrong!

We need to expose these VCs and Angel Investors in SA – people just do not know about it.

The problem with Slide 9 is that you’re taking it out of context. Sure Venture Capital exists however it certainly doesn’t exist if you’re trying to start an online product.

That’s my experience of it anyway. VC in this country is not focused online and I’ve spent countless hours with VC people in SA who simply aren’t interested in online.

In addition, if your online product doesn’t have a global strategy then you’re simply wasting your time trying the VC route here.

One Angel investor I know was investing in SA/African focused online properties but has subsequently stopped. The bottom-line, there simply isn’t a good enough return for VC to justify online startups in South Africa.

I would certainly like to see how many of the VC firms above have invested in online startups here. I think we’d be hard pressed to find any.

I’d like to be proven wrong but my experience tells me otherwise.

I’m currently working at a tech-focused VC (under-the-radar start-up with plenty of funding) and I can tell you there are a number of capital providers looking for good investment ideas and good jockeys.

There’s even an SA Venture Capital & Private Equity association (www.savca.co.za) and if you look at the members list (http://tinyurl.com/savcalist) you’ll notice number of VC entities playing in this space.

You mentioned Hasso Platner, who I believe specifically allocated EUR25m to ZA for a fund. They received +-100 business plans and were interested in about 5 IIRC at that time.

InVenFin have been around for a while now. Cape Biotech focus on biotechnology, but do VC work.

For innovative projects, there’s National Research Foundation funding, the DST’s Innovation Fund, the DTI’s SPII and various other government support projects.

Mark Shuttleworth’s HBD runs a VC fund.

There are more, too, but I think my point is made.

25th April 2009 was the day and Tom Associates Training Centre in Lagos Nigeria was the venue. Geeks, web entrepreneurs, and other like-minded people in the IT industry gathered to deliberate on Web 2.0, dot-com startups, web marketing strategies, mob…

With your Afrigator story, I saw a lot of people at the event fired up to get something up. I believe before the end of the year, we will share a success story.

Like you said, the community is really lacking in Nigeria. With the commitment from everyone side things will improve overtime.

Thank again Justin!

Thanks for this:)

South Africa where we do have a pretty strong online community and while it’s often incestuous, contrived and filled with so-called rockstars this community does help drive products online.

LOL!!!

@Loy thanks for your cool comment. I really believe that what you’re doing with Startups Nigeria is extremely valuable in helping to connect the community in ways that I don’t think even you can understand. We have a couple of these sites here http://www.startupafrica.com & http://www.bandwidthblog.com are some of them helping connect Africa with African’s and long may it continue.

From speaking to delegates at BarCamp it seems that everyone is keen to make meetups more of a regular occurrence so I hope that this is the beginning of really good things to come!