When I was first introduced to RENEW several years ago, I was not yet familiar with the concept of impact investing or angel investors. I had yet to travel to Africa, and I didn’t know the statistics that countries in Africa are becoming some of the fastest growing economies or that the U.S. is significantly behind China and other foreign countries in investing in Africa.
I didn’t know many of the things I know now about impact investing, but what I did know was this: pure and simple development as the U.S. has known it – handing out money to this organization and that – isn’t enough. I had traveled, studied and learned about many countries, impoverished communities and development organizations, and I was about to move to Cairo, Egypt, a city with more than 17 million people, 20 to 30% of whom live below poverty level. Even before moving to Cairo and seeing the story of poverty and development first-hand, I knew that the traditional model of development was lacking. For a country, a business, an individual to grow and move forward, handing them a dollar a day isn’t good enough. What happens the next day? They need another dollar. And another the next, and the next, and the next. The cycle is endless and it seems that the very act of continuously giving money actually perpetuates itself. No matter how much money is raised and given, the country/business/individual will likely need even more the next year, and the cycle will continue.
I had already discovered these things about development when I became acquainted with RENEW’s work three years ago, and that is why I knew RENEW’s model of connecting investors to growing businesses in Africa was not only brilliant, but necessary.
In the interim, my time living in Egypt and traveling to various other developing countries confirmed my beliefs. I saw countless situations in Egypt where development dollars left a community just as unable to help themselves as before. In many cases it actually reinforced the mindset of poverty, rather than helping communities and countries move forward into social and economic stability. Although I believe there is certainly a time and place for giving aid to people in need, the continuous act of providing aid can undermine that group’s ability and drive to look for the opportunities around them. Many of the impoverished people I met in Egypt were stuck in a cycle of poverty that was fueled by the continuous aid they were receiving. If there were abundant opportunities for businesses there to receive investments and growth capital, expand, hire more people and grow, the story of many individuals I have met would look very different. Investing in promising businesses creates jobs, strengthens the economy and is a golden opportunity to help people help themselves. This is the work that RENEW is doing, and as I learned more about the opportunities and issues in developing countries, the more I saw how important this work is.
Now, it’s been several years since I first grew acquainted with RENEW. I’m thrilled to become a member of the team and more excited than ever about the work RENEW is doing. RENEW’s vision of redirecting money going into Africa into investing in promising businesses rather than simply giving is the next and necessary step for how the U.S. needs to interact with the developing world. I believe that each dollar going toward an investment in a great business will have a far greater impact on the community, country and economy as a whole, and I believe we need to move in that direction.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.