Building the African venture capital ecosystem through relationships and intentionality

Thought leaders persistently predict an increase in deal volume and deal values on the African continent, and yet the pace of foreign direct investment in this market remains slow, writes Rossie E. Turman III, chair of Lowenstein Sandler’s International Finance practice and co-chair of its Africa practice.

The Atlantic Council blames this reluctance in part on “dated misconceptions” and a “fail[ure]to recognise the mutually reinforcing trends that have over the past twenty years restructured many African economies and enhanced their resilience”.  

After over two decades of experience negotiating and executing complex business transactions in dozens of countries throughout Africa, I have observed that the typical Western approach to venture capital investment often fails to capture the full breadth of opportunity in this promising market. Investors expecting traditional pitches supported by data and profit projections like those to which they are accustomed in the United States and Europe may be disappointed, because the African economy offers a dearth of what the West considers reliable corporate information.