Having a business idea is one thing, establishing a business out of that idea is a different ball game altogether. That’s why most startups don’t pass the ideation phase.
Now, there are a lot of things needed to turn a business idea into an actual profit-making business that the startup founders might not have.
Venture capital firms come in handy at this point, as they provide the necessary funds needed by startups to enable them to scale.
However, this monetary support given to the startups comes with a price which is a certain percentage of the equity.
This symbiotic relationship between startups is made possible due to the following reasons; startup founders need money and investors want a high return on interest.
So the venture capital firms ensure that the needs of all parties involved are met, offering capital for each funding round, scaling the startup growth, and eventually drawing up a profitable exit plan either through Initial Public Offering (IPO) or acquisition.
As with other continents, venture capital firms in Africa have continued to experience accelerated growth in recent times. These African venture capital firms mainly aid African startups.
There are lots of venture capital firms in Africa that exhibit excellence and have top-notch delivery in what they do, however, only five can be enumerated in this article. They include;
Kalon Venture Partners
This Venture capital firm is based in Johannesburg, South Africa, founded by Clive Butkow in 2015.
Kalon Venture Partners invests mostly in businesses in South Africa first and helps them break into the international market. They provide handson support and have some criteria before they can invest in a business.
Some of these criteria include, the business must have a strong management team, a scalable business model, high gross margins and potential for recurring revenue, a strong competitive position within their targeted sector, and a unique product offering.
Kalon Venture Partners generally invests in the growth capital of business innovations with high growth rates and turn gets equity in the business.
They build the portfolio of these startups before existing. Some of their portfolio startups include FinChatBox, Mobiz, among others.
This is a venture capital firm that is devoted to supporting startups with innovative and creative business models by supplying funds, assets and acting as a venture capital manager for startups, guiding these startups till they can generate returns.
Despite the money angle, Novastar also checks out the character, capacity, and ambition of the founder(s) of the startup. If a startup meets up, they go ahead to fund it.
Provides rounds of Capital funding required for each growth phase of the startup. Some startups get up to $250,000 in their initial stage depending on the startup monetary need.
Novastar venture capital has supported businesses around the globe, Africa, Asia, and even the United States of America.
This venture capital firm has its base in Cape Town, South Africa. Founded in 2019 by Sarah Dusek, and Jacob Dusek.
Enygma Ventures is a privately held venture capital firm that focuses on female-led startups especially in the Southern region of Africa.
Currently, Enygma has eleven female entrepreneurs from its 2020 cohort who they trained on the investor-ready program.
MBO Capital Management
This venture capital firm was founded in 2012 and it has it’s based in Lagos, Nigeria.
MBO Capital Management is a privately held venture capital with the mission of being the change agent for economic development and sustainability.
This VC supports startups with human, technical, and financial aid to ensure that their portfolio company gets all the help they need to succeed.
A dynamic venture capital firm on its right, Newton Partners founded in 2014 is situated in Cape Town, South Africa.
The VC focuses on early-stage investment and exits once the startup is stable. Some of its portfolio companies include FlutterWave, BitGo, Bloomable among others.
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