1,000 Mountains Ahead and Behind
By Laura Davis | Thu Jan 26 2017
The Africa we know today is not the same Africa our grandparents knew. The continent has changed drastically over the last decade or two, and continues to do so rapidly. What makes this shift interesting is that for so long, most of us in the West loved "helping Africa", but did so in a way that generally took the form of charity, emergency aid or some other method of a providing a handout or a ‘Band-Aid solution’ to a crisis. The possibility of investing in and growing companies, building cities and focusing on sustainable private sector growth was nearly unimaginable.
But, here we are in 2017, witnessing rapid development and opportunity before our very eyes, while also reflecting on the incredible growth from the past several decades. Africa has transcended our outdated perspectives of its economy and our aid-centric view of its existence. But while the continent continues moving towards a highly competitive and increasingly industrialized economic position in the world, there still exists a great lack of options for individuals to be part of this story, and capture the vast opportunity which it presents.
This is where RENEW comes into play... Years ago we saw this shift occurring. In Africa, there were companies growing bigger than microfinance institutions were equipped to finance, yet were still considered too small and too risky for larger private equity funds to pay attention to. The result was an increasing amount of companies in the $1-2M in sales range with 20-30 employees, but nowhere to turn for the capital required to scale and become $50M companies employing 500 people. In the U.S., we started seeing the rise of compassionate capitalists, philanthropists, individuals, and families who wanted a better and more successful model than straight giving as a way to help; a shift towards investing in companies that create jobs and build economies. However, there was no expertise on the ground to source and manage investments, let alone a vehicle for facilitating the process. RENEW saw the supply and demand, and asked, “how do we connect these dots and turn this into an opportunity?”.
The barriers required to realize this vision and overcome its challenges were (and still are!) high – including, but not limited to, information asymmetry, differing business culture and norms, a lack of trust with entrepreneurs and business partners, 7,000 miles of distance, time zone complications, and an enormous gap in understanding and information on both sides. We can confidently say we’ve climbed 1,000 mountains these last five years, and the result is an investment platform called the Impact Angel Network and a growing portfolio of exceptional companies.
RENEW and the IAN build companies through an all-inclusive and innovative model: we find, vet, perform due diligence, negotiate, invest in and then actively help them grow (think Shark Tank meets Indiana Jones) by providing technical assistance and consulting in key areas of their business, namely finance, marketing and sales, and governance. We love building great companies in challenging parts of the world where small to medium-sized enterprises (SMEs) are needed most, and we just happen to be an investment firm with one heck of a mission and an unparalleled experience for our investors to boot.
So what have we accomplished over the past 5 years? We’ve invested in 7 incredible companies and entrepreneurs, we are supporting over 1,100 jobs and 3,500 smallholder farmers, we are generating export revenue for the country, we’ve attracted an additional $10.3M in financing for the portfolio in Ethiopia, and we’re just getting started.
Looking at 2016 in particular, we launched a public-private partnership with the Canadian government
to expand the IAN into Canada and scale up our work in Ethiopia. We opened The Exchange - an amazing business acceleration space where we'll be taking companies through our growth acceleration program and coaching them into becoming market leaders. We’ve learned how to navigate in-country political and civil unrest and technological hurdles and to come back from these experiences stronger and more equipped to deal with future challenges that will surely be faced. We learned the importance of staying the course; because what we're doing - creating jobs - in turn, builds stability and requires our commitment to the vision we’ve laid out. We are a small but growing player in the development of a stable and thriving economy, and it is a robust SME sector that is a hallmark of a thriving economy.
So, what do we plan to do in the year ahead? We've got some great investments lined up across multiple priority sectors. We are going to launch multiple training programs at The Exchange, our new space in Ethiopia, and across the country. We will continue working with our portfolio companies to optimize their governance and operations, and increase sales. We will also continue teaching Ethiopian companies the basics of private equity investing by coaching them on how to pitch their companies the larger funds. We're doing some heavy lifting behind the scenes to help build the private equity industry in Ethiopia from the ground up and we couldn’t be more driven! We also plan to implement several new investor experiences for members of the IAN, to continue growing an amazing network of compassionate capitalists, and to host our third annual National Gathering in Washington, DC in October.
We truly are excited for what the future has in store and invite you to come on this journey with us in growing companies, building nations and leaving a legacy.