<h1 style="text-align:center;">The Stretch - My Journey to RENEW</h1>Have you ever faced your limit? The limit of your strength, your patience or your capacity to work? Sometimes we arrive at a place where we look up from our desk and we ponder, “Is there more to life than this? Is there something else that would give my life more purpose, meaning, joy and balance?” Some days we see our limits, and it is never easy to accept the distance between what we can do and what we want to do. “This is as far as I can go” is a statement of resignation that evokes frustration, grief and discouragement, but we often go through this for a good purpose. This purpose may be to better understand our limited capacity as human beings so that we may be humbled. When we are faced with our limits, we have two choices: to resign and say "this is as far as I can go" or respond to the call to expand.&nbsp;This call has been an integral part of my journey to Ethiopia that has become the enlargement of my “tent”, the lengthening of my cords and the strengthening of my stakes.<figure class="image"><img src="/uploads/Picture1_Fotor_126eff1ff0.jpg"></figure>I have become acutely aware that we should not be limited to what we already have. We need to try new doors and accept that this expansion requires work. Indeed, this growth does not come to the sluggish. This speaks of seeking new opportunities, without forsaking the old ones - it's adding, not replacing. Growth brings along new challenges, concerns and needs that will arise, but we must allow this work to happen. The inconveniences, sacrifices, difficulties, heartaches and burdens you are carrying will all increase, but the rewards will be far greater. We need to feel the strain if the work is going to make an impact. These burdens are put on our shoulders for a reason, they stretch us as we learn to lay down our own rights for the sake of others. In the process of growth, we simply can’t stop at what we think we can do, because if we stop there, we will not see the possibilities. We are being called not to hold back but to sacrifice in our quest for significance.Most of us like the idea of being significant, to move from getting to giving. The challenge we face is to ensure that we do not wait until our life is half over before we work towards significance. We go through life focused on success that is represented by wealth, recognition, power and status. The reality is that true significance requires us to focus on the opposite of each of these symbols.The opposite of accumulating wealth is generosity with our time, talent, treasure, and touch (reaching out to support others). The opposite of recognition is service. The opposite of power and status is relationships. If we just focus on significance (generosity, service, and relationships), we will always be amazed at how much success will come our way.Life is all about the choices we make as we interact with others. We can choose to be serving or self-serving. Life constantly presents us with opportunities to choose to love and serve one another.Leadership is loving our mission, loving our customers, loving our people, and loving ourselves enough to get out of the way so that other people can be magnificent.This is why I removed my stakes, stretched my tent and moved to Ethiopia.

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The Stretch - My Journey to RENEW

<h1 style="text-align:center;">RENEW to Help Launch Season 2 of Chigign ‘Tobiya</h1>Season 1 of Chigign ‘Tobiya was a success culminating in the show’s angel investors choosing three companies to invest in, pending they pass due diligence. On September 11, 2018, just after the Ethiopian New Year’s Day, in a premium slot on national television, the show broadcasted the final episode of Season 1 during which the following three entrepreneurs were chosen by the panel of local angel investors for investment:<ul><li>Rohobot - A provider of home care nursing and training</li><li>YenePay - A mobile payment platform</li><li>BAMA Coffee - A mobile coffee-to-go business</li></ul>The transactions are in process, pending due diligence, and in the meantime, RENEW is helping to launch Season 2 of the TV series which will appear on Fana TV, Fridays at 8:30 PM. Girmay Haile Gebreselassie, the visionary behind the show, will return to produce Season 2. He has written and directed two movies, three plays and has a solid career in IT.Chigign is a reality TV show dedicated to elevating entrepreneurship and angel investing, with a special focus this season on female entrepreneurship. The show aims to encourage and educate youth and society at large about the importance of innovation, entrepreneurship, private equity, angel investing and the private sector in general in Ethiopia. RENEW is proud to be a sponsor, to be represented on the panel by our own Laura Davis, and also to invest in winning entrepreneurs who pass our due diligence process.Visit <a href="https://www.youtube.com/watch?v=GyovqM8acCY&amp;feature=youtu.be">YouTube</a> to view a short program clip or <a href="http://www.tonetormultimedia.com/">HERE</a> to see the advertisement.Show Name - Chigign 'Tobiya (Roughly translated to “Ethiopia Emerges”)The Concept - Chigign 'Tobiya is a platform for entrepreneurs to gain access to potential capital, contracts and coaching. Entrepreneurs appear and pitch in a venue that combines the American TV programs “Shark Tank” and “American Idol”. Entrepreneurs who move on through the competition receive coaching from the Chigign team and, in some cases, the judges with a focus on enhancing the entrepreneurs’ business concepts. The top contestants who make it to the final round will be considered for an investment from the panel's fund.Get Involved:Pitch Your Company or Idea - The Chigign 'Tobiya team will choose more than 30 entrepreneurs each season and have them pitch their company or idea for a chance to appear on the show.Be an Investor - Be a permanent or rotating investor on Chigign 'Tobiya. Hear pitches, mentor entrepreneurs and vote with the panel to allocate the fund to finalist entrepreneurs. Not interested in appearing on the show? There are still options to be involved. Reach out via email to learn more (contact information is below).Be a Sponsor - The Chigign 'Tobiya team is looking for sponsors interested in promoting entrepreneurship and innovation among Ethiopian youth and the society at large. We offer sponsors options to be featured in Chigign Tobiya events and programming, among a variety of benefits. Contact us to learn more (contact information is below).Ecosystem Partner - Do you work with Ethiopian entrepreneurs? We'd love to add value to your program by having your entrepreneurs pitch on Chigign 'Tobiya.Contact- Interested in being involved? Email us at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> or visit <a href="http://chigign.com">www.chigign.com </a>for more information.

Edutainment uses mass media as a platform to educate the public and elevate the concept of entrepreneurship and angel investing across East Africa. In Ethiopia, Renew Capital helped to build Chigign, a reality TV show dedicated to elevating entrepreneurship and angel investing. Future programs will aim to extend this educational work across Africa.

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For Youth Entrepreneurs and Local Angel Investors

Elevating Entrepreneurship and Angel Investing in Ethiopia

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RENEW to Help Launch Season 2 of Chigign ‘Tobiya

<h1 style="text-align:center;">Building Ethiopia’s Investment Ecosystem</h1>Part of RENEW’s purpose is to master the art and science of doing smaller sized equity investments in Africa. Smaller equity investments, those below 3M, are often not attractive for private equity (PE) funds to invest in since they cost the same, or sometimes more than the larger deals. Unfortunately, this creates a problem in many countries across Africa called the “missing middle”, and it makes it very hard for small and medium-size businesses (SMEs) to access capital and reach their full potential. RENEW‘s mission, in partnership with the <a href="https://www.renewcapital.com/investing" target="_blank" rel="noopener noreferrer">Impact Angel Network</a> and our partners at Global Affairs Canada, is to fill this gap in the capital market through new investment strategies. We are happy to report that in Ethiopia, it is working! In this blog, we want to share some interesting data we have discovered through some of our work, called sourcing.Sourcing is one of the key activities done by an investment firm. Sourcing is the job of everyone at the company and it involves lots of meetings, driving around and doing creative activities to find the best companies. One of the sourcing activities we do at RENEW is called the PE500: a half-day workshop hosted at The Exchange for companies to learn about private equity and the investment process. The goal is for companies and owners to learn about how PE works, and for us to meet new businesses.Throughout the 5-year term of the ABG project, our goal is to train 500 companies in Ethiopia through the PE500. Most of the companies that attend are looking for a partner to help them grow. Our aim with this training is to help owners learn about how equity investors can be a partner and then to help them learn how the equity process works.At the PE500 workshop, we cover the following topics:<ul><li>Who is RENEW, who are our investors, why are we here, and what do we do?</li><li>What is private equity, why is it important to companies in Ethiopia, and how is it unique?</li><li>What are the benefits and drawbacks of working with an equity investor?</li><li>How does the investment process work?</li><li>How can you increase the chances of attracting an equity investor?</li></ul>Through July and August of 2018, RENEW submitted a survey to 312 companies that have attended past PE500 trainings since the beginning of the ABG project. We received 150 responses to the survey. The purpose of the survey was to evaluate how the PE500 is helping SMEs improve their financial acumen and attract capital, given two of the intermediate outcomes of the ABG project are improved financial, environmental and social performance and success in attracting financing of SMEs to drive sustainable and responsible business growth. The overall target of the ABG project is to attract 52.5M Canadian Dollars (CAD) of financing, 15% of which should be provided to incubator companies. The PE500 training is a key tool for achieving these results. All data reported below was self-reported and provided by the entrepreneurs.Key survey findings:<ul><li>18 SMEs attracted financing after attending the PE500 training</li><li>4 of the 18 SMEs (or 22%) are led by women</li><li>CAD 2.3M in additional capital was secured</li><li>CAD 589K (or 26%) was secured by women-led businesses</li><li>Of the 18 SMEs, 39% received loans, 27% received grants, 17% received equity, and 17% reported other sources of funding (e.g. founders, family and friends).</li></ul>The above results indicate we have achieved 24% of the target for number of incubator companies attracting financing (18 of 75) and 15% of the target in terms of dollars (CAD 2.3M of CAD 15M).We have seen more compelling gender results, since we were targeting only 5% of incubator financing to be received by women-led businesses.More about the entrepreneurs that attended the PE500:<ul><li>Of the 312 companies to which the survey was submitted, 94 (30%) are women-led, and from the 150 companies that responded, 48 (32%) are led by female entrepreneurs.</li><li>The PE500 training is designed for business leaders and members of the senior management team, and 87% of our respondents were general managers, founders and/or owners of the businesses.</li></ul>Gender profile of the businesses that responded to the survey:<figure class="image"><img src="/uploads/screen_shot_2019_01_07_at_7_04_10_pm_0_269852fda6.png"></figure>About their companies:<ul><li>The companies are diversified and represent many industries and sectors, but over 60% of the companies that attended the PE training to date operate in sectors that are relevant for Ethiopia’s economic development and exist within the government’s priority sectors. These companies are also relevant for RENEW’s investment criteria and pipeline.</li><li>Of the 150 respondents, only 88 companies reported previous year revenues; of those who did report, average income was CAD 1.5M. However, this number may be misleading because large companies typically feel more confident in sharing their revenue, whereas small and medium sized companies, especially startups, often feel uncomfortable reporting small revenue results.</li><li>131 of the 150 companies reported employment data. On average, the companies have 68 employees in their workforce.</li></ul>Growth plans:At the end of each PE500 workshop, entrepreneurs are asked to complete a form providing feedback on the facilitation and content of the training. Additionally, we ask for more information about the attendees’ businesses (such as sales and employment numbers, as mentioned above), and ultimately if the attendees have interest in a one-on-one meeting with RENEW to learn more about potential financing. Most often, the feedback is very positive, and companies also provide valuable insights, such as their plans for growth as seen in the chart below.<figure class="image"><img src="/uploads/screen_shot_2019_01_07_at_7_05_43_pm_0_5b03b77465.png"></figure>The above chart illustrates the feedback from 104 companies regarding their plans for growth. The top initiative or plan for company growth involves increasing capacity (27%), followed by expansion and finally by working on and refining business strategy. The others did not specify.What SMEs need:<figure class="image"><img src="/uploads/screen_shot_2019_01_07_at_7_07_17_pm_501436b1f3.png"></figure>When companies were asked what they were most in need of, 47% responded with financing and working capital, followed by 20% reporting business support and expertise and 10% reporting strategic partnerships.Job Growth:On average, the companies that replied to the survey increased their number of employees by 44% in the current year compared to the prior year. When comparing the current year to two years ago, companies had increased their employee numbers by 71% on average.Conclusion:We believe that equity training can be a great tool to educate the market about a new funding source for companies in frontier markets like Ethiopia. These can also act as a great sourcing tool for Private Equity investors. We are excited about the results from the first 2.5 years of the program and look forward to enhancing the training to help high-quality SMEs attract capital and close the funding gap called the missing middle.

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Building Ethiopia’s Investment Ecosystem

<h1 style="text-align:center;">High-Growth Firms in Emerging Markets</h1>At the end of 2018, the <a href="http://www.worldbank.org/">World Bank Group</a> released a new report, <a href="https://openknowledge.worldbank.org/handle/10986/30800">High Growth Firms: Fact, Fiction and Policy Options for Emerging Economies</a>, which looked at the qualities and characteristics of high-growth firms (HGFs) in a number of developing countries. The report’s goal was to discover the characteristics of HGFs, determine the best way to tell when a company is hitting a high-growth phase, understand the drivers that bring companies to this phase, and determine how policy makers and development partners can use this information to better finance potential HGFs. The report focused specifically on countries considered to have an emerging economy. With this focus, it shines light on what policies are needed to help bolster these economies and to help sustain growth of HGFs.<figure class="image image_resized" style="width:100%;"><img src="/uploads/screen_shot_2019_02_05_at_8_25_20_pm_fd5f17cd70.png"></figure>One of the major findings of the report was that HGFs are an important part of both job and economic growth for a country. On average, HGFs make up between 3-20% of manufacturing and service firms in the countries studied, but they create over half of the new jobs in the given country.The report also illustrates that there are several common misconceptions about HGFs. When people typically think of an HGF, they usually picture a start-up in the tech sector which grows rapidly over a period of time, usually due to a quality inherent to the firm (such as a new tech advancement). Viewing HGFs through this narrow lens is problematic, as it results in targeting specific companies which are believed to have the potential to become an HGF for receipt of financing and resources necessary to realize this potential (World Bank Group, 2018).<figure class="image image-style-align-left"><img src="/uploads/screen_shot_2019_02_04_at_11_03_55_am_5496650fe3.png"></figure>In reality, the report found that HGFs can be start-ups; however, they’re usually a company that is past this phase. Moreover, the report found that HGFs actually exist in all sectors and locations and are not predominantly in the technology industry (World Bank Group, 2018). In Ethiopia specifically, HGFs were mostly in manufacturing and were usually grouped around large metropolitan areas. See the chart below for the breakdown.As noted above, HGFs create over 50% of new jobs in their respective sectors. The report found that the “net change in employment and output would have been negative without the positive contributions of these firms” (Grover, et al, 2018, pg 3). Therefore, HGFs are a major indicator for determining how well an economy is performing. The dynamics that HGFs bring to emerging economies are actually similar to what has been seen in high-income economies like the United States and Sweden (pg 3).<figure class="image image-style-align-right image_resized" style="width:64.94%;"><img src="/uploads/screen_shot_2019_02_04_at_11_01_40_am_70395bfb48.png"></figure>The report also closely looked at policy initiatives and how organizations typically identify and target HGFs. Unfortunately, they found most current initiatives are misguided and target firms they erroneously believe to be high-potential. The report suggests a complete reorientation for how people view HGFs and how to effectively search for them. Their suggested method is to look for companies which hit all aspects of the “ABC’s of growth entrepreneurship: improving Allocation efficiency, encouraging Business-to-business spillovers, and strengthening firm Capabilities” (pg 5). They believe that by supporting these ABC’s, there is a positive correlation to actually seeing desirable outcomes, and these companies have a higher potential of hitting a high-growth phase. With the ABC’s in mind, the report outlines the 5 specific factors that tend to drive growth within a company. They are: innovation, network economies, managerial capabilities and worker skills, global linkages, and financial development.Overall, the report recommends that people shift their perspectives on the indicators related to high-growth firms in order to reform policy and access to financing that may be available to this type of company. It’s a shift to supporting companies that have good innovative business practices with strong, capable management and employees, rather than targeting firms solely based on their size and sector.For more information and to see a copy of the report, visit the below sources.<hr>Sources:Grover, Arti; Medvedev, Denis; Olafsen, Ellen. 2018. High-Growth Firms : Facts, Fiction, and Policy Options for Emerging Economies: Executive Summary. Washington, DC: World Bank. © World Bank. <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/30800/211368ov.pdf?sequence=4&amp;isAllowed=y">https://openknowledge.worldbank.org/bitstream/handle/10986/30800/211368ov.pdf?sequence=4&amp;isAllowed=y</a>World Bank Group. 2018. High-Growth Firms: Facts, Fiction, and Policy Options for Emerging Economies <a href="https://www.worldbank.org/en/news/feature/2018/11/16/high-growth-firms-facts-fiction-and-policy-options-for-emerging-economies">https://www.worldbank.org/en/news/feature/2018/11/16/high-growth-firms-facts-fiction-and-policy-options-for-emerging-economies</a><hr>Image Source:Grover, Arti; Medvedev, Denis; Olafsen, Ellen. 2018. High-Growth Firms : Facts, Fiction, and Policy Options for Emerging Economies: Executive Summary. Washington, DC: World Bank. © World Bank. <a href="https://openknowledge.worldbank.org/handle/10986/30800">https://openknowledge.worldbank.org/handle/10986/30800</a> License: CC BY 3.0 IGO.

A Look at the World Bank’s Recent Report on HGFs.

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High-Growth Firms in Emerging Markets

<h1 style="text-align:center;">Press Release: 2019 International Gathering</h1><a href="https://latest-api.renewcapital.com/uploads/RENEW_Press_Release_National_Gathering_0ab80728fc.pdf">Download the Full Press Release.</a>Washington, D.C. March 26, 2019 --The <a href="https://www.renewcapital.com/what-we-do/investing">Impact Angel Network</a> (IAN), a global angel network dedicated to investing in high-potential companies across the continent of Africa, has announced the IAN’s <a href="https://www.renewcapital.com/resources/blogs/2019%20International%20Gathering%20-%20Thank%20You%20to%20our%20Sponsors%20">2019 International Gathering</a>. This year, the Gathering will be held on May 17th, 2019 at the Embassy of Canada in Washington, D.C.The event’s keynote speaker will be <a href="https://www.carlyle.com/about-carlyle/team/david-m-rubenstein">David Rubenstein</a>, co-founder and co-executive chairman of the Carlyle Group. Join us for a fireside chat as he shares his story about building one of the world’s most successful private equity firms and how he views opportunities in Africa. Attendees will also interact with other special guests and dignitaries, and hear IAN members’ personal stories about how they help finance companies managed by smart and successful Ethiopian entrepreneurs for impact and financial returns.Organized by RENEW, an impact and investment advisory firm which manages IAN, the annual Gathering convenes IAN members and guests to explore the dynamic investment landscape in sub-Saharan Africa, through the lens of SME investing. Guests will spend the evening at the Embassy of Canada, overlooking the Capitol Building, with other like-minded individuals, business executives, thought leaders and experts in the impact and angel investing space. RENEW aims to elevate angel and impact investing and how the private sector is driving growth. The Gathering is a great opportunity to have important conversations related to impact investing and how we’re all contributing to an entrepreneurial culture on the continent and to Africa’s growth story.<figure class="image"><img src="/uploads/screen_shot_2019_03_28_at_3_19_00_pm_c99bbcfb0d.png"></figure>Tickets for the event are available until Monday, May 13th and can be purchased at <a href="https://2019-international-gathering.eventbrite.com/">this link</a>. For more information about sponsorship opportunities please visit our <a href="https://www.renewcapital.com/what-we-do/investing">website</a>. Additional events will be held exclusively for IAN members throughout the weekend. If you’re interested in learning more about the IAN or joining the network please visit the following <a href="https://www.renewcapital.com/apply">link</a>.We’d like to thank the following partners and sponsors for making the 2019 International Gathering possible: The Embassy of Canada (co-host), <a href="https://www.faegrebd.com/en">Faegre Baker Daniels</a> (platinum sponsor), <a href="https://limalimolodge.com/">LimaLimo Lodge</a>, <a href="http://enlightenmentwines.com/">Enlightenment Wines</a> and <a href="https://kanterpr.com/">KANTER</a>.About the Impact Angel Network and RENEWThe Impact Angel Network is one of the most active private equity investors in East Africa. Its members seek to make both social impacts and financial returns through investments in small and medium enterprises (SMEs), a proven engine of economic growth and job creation, but lacking capital in Africa due to their size. They believe that targeting employment through SMEs, dollar-for-dollar, can help reduce poverty in a more sustainable way than charity.RENEW, with its largest office in Addis Ababa, Ethiopia, manages the IAN’s investment operations and provides investment advisory and consulting services in support of its investments. RENEW’s work in Ethiopia was piloted with USAID and is currently undertaken with financial support from the Government of Canada provided through Global Affairs Canada. The project, Accelerating Business Growth, aims at sustainable job creation for low-skilled workers, including women and young adults, through a dynamic and growing small and medium business sector in Ethiopia.&nbsp;###

Angel Network Focused on SMEs in sub-Saharan Africa to Host Fourth International Gathering.

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Press Release: 2019 International Gathering

<h1 style="text-align:center;">2019 International Gathering - Thank You to our Sponsors!</h1>On May 17, 2019, the IAN’s <a href="https://www.renewcapital.com/resources/blogs/Press%20Release%20%202019%20International%20Gathering">International Gathering</a> will convene members and guests to explore the dynamic investing landscape in sub-Saharan Africa through the lens of SME investing. For the second time, guests will spend the evening at the beautiful Embassy of Canada in Washington, D.C., overlooking the Capitol Building. For the past three years, RENEW has partnered with <a href="https://www.canada.ca/en.html">Global Affairs Canada</a> through our work under our <a href="https://w05.international.gc.ca/projectbrowser-banqueprojets/project-projet/details/D002584001">Accelerating Business Growth</a> (ABG) program. We are grateful for the support from the Embassy of Canada and Global Affairs Canada for co-hosting this memorable event with us.We’d also like to highlight all our sponsors who are helping to make this International Gathering the best one yet:<ul><li><a href="https://www.faegrebd.com/en">Faegre Baker Daniels</a>: Faegre Baker Daniels (FaegreBD), our Platinum Sponsor, is one of the 75 largest law firms headquartered in the U.S., with locations that span coast to coast and also cover the U.K. and China. Their offices collaborate to achieve clients’ objectives - bringing together the best-matched expertise and resources from across their global platform. FaegreBD’s legal and consulting professionals partner with clients ranging from emerging startups to multinational corporations, delivering full-service advice customized to each company’s business needs.</li><li><a href="https://kanterpr.com/">KANTER</a>: KANTER is a public relations firm for the investment management industry. They help a variety of investment firms build their brands and become better known through meaningful and high-quality press, as well as a continuous presence in the media. Kanter is led by <a href="https://www.linkedin.com/in/victoria-odinotska-7b2a025/">Victoria Odinotska</a>, a member of the Impact Angel Network.</li><li><a href="http://enlightenmentwines.com/">Enlightenment Wines</a>: Enlightenment Wines started out as a small, part-time farm winery in 2009 by Raphael Lyon. In 2015, Lyon reached out to <a href="https://www.linkedin.com/in/anthony-rock-14322082/">Anthony Rock</a> (a member of the Impact Angel Network) and Arley Marks with the intent to join forces and grow Enlightenment Wines into a full-scale production meadery with a tasting room and cocktail bar named Honey’s in Brooklyn New York. Since then, Enlightenment Wines has been focusing on small batch meads made with wild yeast, foraged herbs, and locally sourced fruit. These honey-based wines are dry (not sweet), barrel fermented, and released seasonally, and have been featured in the likes of <a href="https://www.gq.com/story/best-bars-america-2018">GQ</a> and <a href="https://www.newyorker.com/magazine/2017/10/16/the-magical-mead-of-honeys">The New Yorker</a>.</li><li><a href="https://limalimolodge.com/">LimaLimo Lodge</a>: Perched on the edge of the escarpment, Limalimo Lodge is a beautiful place to experience Ethiopia's Simien Mountains National Park. Combining simple luxury and elegant design in a stunning setting, the lodge promotes sustainable tourism with minimal environmental impact and provides new opportunities to the local community. The lodge has been featured in the likes of <a href="https://www.travelandleisure.com/slideshows/best-hotel-openings-worldwide">Travel + Leisure</a> and <a href="https://www.cntraveler.com/story/go-to-ethiopia-for-ancient-history-jazz-and-a-capital-city-on-the-rise">Conde Nast</a> for its minimalist-chic ambiance with staggering views. LimaLimo Lodge is owned in part by <a href="https://www.linkedin.com/in/lucas381/">Lucas Robinson</a>, a member of the Impact Angel Network.</li></ul>Interested in attending the <a href="https://www.renewcapital.com/resources/blogs/Press%20Release%20%202019%20International%20Gathering">2019 International Gathering</a>? Tickets can be purchased at the following <a href="https://www.eventbrite.com/e/renew-and-the-impact-angel-networks-2019-international-gathering-tickets-51562748569">link</a>. To learn more about sponsorship opportunities, please visit our <a href="https://www.renewcapital.com/what-we-do/investing">website</a>.<figure class="image"><img src="/uploads/sponsors_final_dd12330f28.png"></figure>

A thank you to those who are making this event possible.

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2019 International Gathering - Thank You to our Sponsors!

<h1 style="text-align:center;">Improving Ethiopia’s Investment Profile</h1>We at RENEW join Ethiopia in celebrating the heightened attention it has received recently within the international investor and business community. The country’s liberalizing reforms are gaining momentum under the fast-moving leadership of Prime Minister Dr. Abiy Ahmed, presenting increased reason and opportunity for the rest of the world to take notice. Many have seen great economic potential in the country’s fast GDP growth, abundant natural resources, growing middle class, political and strategic importance in Sub-Saharan Africa and relative political stability. Yet, the challenges of doing business in Ethiopia have caused many U.S. and other foreign investors to be reluctant to invest in Ethiopia. We applaud the administration’s efforts to change this reality.RENEW is heavily invested in Ethiopia’s success. Our team, based primarily in Addis Ababa, facilitates angel investments into companies in Ethiopia and works with these investee companies to help them become more competitive in both international and domestic markets. We have been operating in Ethiopia since 2012 and, together with the Impact Angel Network (IAN), have become one of the most active private equity firms in the country. Since 2012, RENEW and the IAN have made twelve investments in ten companies supporting nearly 2,200 jobs, generating millions of dollars in export earnings, and supporting more than 5,700 small-holder farmers along multiple agricultural value chains. RENEW has implemented an “accelerating business growth” (ABG) program in Ethiopia in partnership with the Canadian government. We are advised by an ABG advisory group which includes prominent businessmen and government officials from Ethiopia. We have learned a lot about investing in Ethiopia from our local advisors and are very thankful for their support.Recently, we were invited by members of the Ethiopian government to report on the challenges that we are encountering when investing in the country and to suggest areas for improvement. We have had a number of fruitful discussions following up on this invitation as part of the government’s efforts to reform its investment regulatory and administrative framework to align it with recent changes in economic policy priorities. The focus of these discussions has been on the areas and recommendations outlined below:<figure class="image"><img src="/uploads/whitepaper_3c057a6ee8.jpg"><figcaption>Image Source: France 24: <a href="https://www.france24.com/en/20180730-abiy-ahmed-spreads-hope-reform-ethiopia">Abiy Ahmed: Ethiopia's first Oromo PM spreads hope of reform</a></figcaption></figure><ul><li>Restrictions on Investment Structures Commonly Used by Investors in Early Stage Companies: Investors frequently cite a lack of options for structuring their investments, particularly in early-stage companies. We recommend loosening restrictions on lending (including interest rates), considering long-term options to open the debt markets, allowing other entity types (such as a PLC) to issue preferred shares, and providing greater flexibility for small equipment leases.</li><li>Enforceability of Investment Agreements: Oftentimes, investors are nervous that their investment agreements (such as a share purchase agreement or shareholders’ agreement) will not be enforceable. We suggest clearly stating in the law that all investment agreements will be separately enforceable, in addition to companies’ memorandums and articles of association, and clearly outlining any witness or other authentication requirements for such agreements.</li><li>Frequent Regulatory Modifications: Investors express some concern that regulations will be modified unexpectedly or without explanation. To alleviate this concern, we suggest providing additional notice periods for regulatory changes so that investors can plan accordingly and seeking public commentary before final laws are published.</li><li>Delays and Uncertainty in the Process of Registering Capital: Various agencies play a role in registering foreign investments, including the EIC, NBE, MOTI and DARA. Officials at each agency sometimes provide conflicting guidance and the number of agencies can cause delays and uncertainty as to whether an investment will be reliably approved. We recommend enhancing the training of government officials responsible for registering foreign investments, streamlining the number of agencies involved, and restricting notaries’ duties to ensuring the authenticity of documents (rather than performing substantive reviews).</li><li>Repatriating Capital: Investors often fear that they will encounter significant administrative delays when trying to convert currency and repatriate capital. To ease these concerns, we recommend that the NBE publishes its track record of paying remittances and, if possible, provide a platform through which investors can track their place in the queue to repatriate dividends or capital.</li><li>Sector Restrictions on Foreign Investors: We recommend opening up additional sectors to foreign investment. Rather than having a list of defined sectors in which foreign investors can invest, we recommend a narrow list of prohibited sectors, leaving all other sectors open to foreign investment. Certain sectors could first be opened through investment by a joint venture between foreign and domestic investors, to allow for a gradual opening of the sector.</li><li>Treatment of Local Companies with Foreign Minority Shareholders as “International Companies”: Foreign investors often take a minority equity interest in a local company, in an effort to help that company compete with international players. However, we understand some companies have lost certain privileges they had as a local business due to these minority investments. We recommend abolishing any policy that favors 100% locally-owned companies over local companies which merely have a foreign minority shareholder, so as not to harm these companies and undercut the growth that the foreign investment is intending to facilitate.</li><li>Registration of Title: Providing for title registration at the municipal level can oftentimes cause delays in the operation of a company’s business, if the local office is closed or unavailable for any reason. We recommend providing for an alternative to municipal registration in an effort to alleviate delays.</li></ul> &nbsp; &nbsp;

RENEW suggests investment reforms to attract more foreign investment and business

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Improving Ethiopia’s Investment Profile

<h1 style="text-align:center;">Press Release: RENEW &amp; the IAN Commit Capital to an All-Women Fund</h1><a href="https://renewcapital.com/sites/default/files/press_release_-_womens_package_-_final_1.pdf">Download the Full Press Release.</a>Denver, CO and Addis Ababa, Ethiopia, April 23, 2019 --RENEW and the <a href="https://www.renewcapital.com/what-we-do/investing">Impact Angel Network</a> have committed capital to a fund dedicated to investing in women-owned and led companies in Ethiopia and Uganda. RENEW and the IAN, now one of the most active investment groups in East Africa focusing on small and medium enterprises (SMEs), designed the fund to address a pressing need to close the financing gap for women-owned companies in Sub-Saharan Africa.Worldwide, only one-third of SMEs are managed by women (World Bank, 2015). In developing countries in particular, studies have shown that women-owned businesses face higher challenges to business success, especially in the area of financing. It is estimated that 70% of women-owned SMEs in emerging markets are not being properly served by the financial institutions in the area, resulting in a $285 billion financing gap. The World Bank notes that “addressing this financing gap and investing in women-owned enterprises is one of the highest-return opportunities available in emerging markets” (2015).<figure class="image"><img src="/uploads/womenspackage_dc94f294e2.jpg"></figure>The new fund will make investments in 3 to 5 women-owned companies, pending satisfactory completion of due diligence. In creating the fund, RENEW and the IAN used a new approach to address social and financial barriers holding back the private sector in Africa. The fund, which supports the <a href="https://sustainabledevelopment.un.org/?menu=1300">Sustainable Development Goals</a> (SDGs), was oversubscribed by the IAN and will support job creation for women and youth and empower women entrepreneurs in Ethiopia and Uganda."There is data that shows that despite comparative investment outcomes, female entrepreneurs are often overlooked by the business and investment communities,” said Laura Davis, Partner &amp; Head of Investor Relations at RENEW. “We hope the Impact Angel Network can show others that by investing in women-led companies we are not just advancing a social agenda, we are making sound investments.”The inspiration for the fund came after a number of the owners being considered for the fund took and excelled in RENEW’s <a href="https://www.renewcapital.com/resources/blogs/Key%20Resources%20for%20Executives">Exec’s Program</a>, a four-month business program which provides participants with the tools they need to successfully scale their businesses. All the companies currently being considered for the fund have completed or are currently participating in The Exec’s Program. “We've known the women we are planning to work with as part of this fund through our Exec's Program, and we have been impressed with their companies," explained Laura Davis.The all-women investment fund has been made possible because of RENEW’s partnership with <a href="https://www.canada.ca/en.html">Global Affairs Canada</a> (GAC). RENEW’s public-private partnership with GAC aims to support high potential, responsible SMEs in Ethiopia, providing them with the tools, resources and training they need to attract and efficiently use finance to grow, thereby enabling them to play a stronger role in the Ethiopian economy.Several of the entrepreneurs being considered for this fund will be attending RENEW’s Impact Angel Network <a href="https://www.renewcapital.com/resources/blogs/Press%20Release%20%202019%20International%20Gathering">International Gathering</a> on May 17, 2019 in Washington D.C.About the Impact Angel Network and RENEWThe Impact Angel Network is one of the most active private equity investors in Ethiopia. Its members seek to achieve both significant positive social impact and financial returns through investments in small and medium enterprises (SMEs) in Africa, a proven engine of economic growth and job creation which often lacks capital due to their size. RENEW and IAN members believe that targeting employment through SMEs is, dollar-for-dollar, is the most effective and sustainable way to reduce poverty.RENEW, with its largest office in Addis Ababa, Ethiopia, manages the IAN’s investment operations and provides investment advisory and consulting services in support of its investments. RENEW’s work in Ethiopia was piloted with USAID and is currently undertaken with financial support from the Government of Canada provided through Global Affairs Canada. The project, Accelerating Business Growth, aims at sustainable job creation for low-skilled workers, including women and young adults, through a dynamic and growing small and medium business sector in Ethiopia.To find out more, please visit <a href="../../index.html">www.renewcapital.com</a>.&nbsp;###&nbsp;Source: The World Bank, 2015: <a href="http://www.worldbank.org/en/news/feature/2015/11/16/financing-women-entrepreneurs-in-ethiopia">SME Financing: Women Entrepreneurs in Ethiopia</a>&nbsp;###

The Fund will support female entrepreneurs and job creation for women and youth in Sub-Saharan Africa

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Press Release: RENEW & the IAN Commit Capital to an All-Women Fund

<h1 style="text-align:center;">An Impact Investment in an African SME, from Start to Exit</h1>A wise investor once gave me a piece of advice. To paraphrase, he said, “Any idiot can invest money, but few know how to get it back.” When I started investing, I used to get excited about closing deals and reaching the point where capital exchanged hands. After working for months (sometimes even years) on a deal that ended with signed legal agreements and wired funds, I felt like we had finally accomplished something, and as such, would make a big deal about this moment. Thinking that this was the ultimate indicator of success, we’d pour ourselves drinks, take selfies, and issue a press release to mark the momentous occasion! But, in the back of my mind as we were celebrating, the wise investors’ advice still rang true. Soon after the close, we would get swept into portfolio management, the roller coaster of entrepreneurship and doing business in frontier markets: a game not for the faint of heart, especially if you invest in startups and early-stage companies like the ones we back in Africa. Now, seven years later and on the other side of the investment equation with a lot more grey hair and wrinkles around my eyes, we had our first exits. Reflecting on the journey, I thought it might be helpful to share a few observations from our experience investing in a small and medium enterprise (SME) from start to exit.The first observation is about clarifying the importance of exits. Most investors plan their exits before they invest, using tools like put options, drag-along and tag-along rights, etc. But many of the companies we meet, screen and train in our Investing 101 for companies do not understand exits or why their investment partners might want to exit - even larger companies who are already in discussions with serious investors. We have found that while planning for an exit is important, explaining an exit is critical - and not just to the target company, but to their lawyer, their accountant, their family members, government stakeholders, and pretty much everyone that is within earshot of the deal.The challenge is that most stakeholders get excited about closing, as I used to. Government agencies report deals closed and FDI attracted in Africa as an indicator of economic growth and success. The development community, also a significant stakeholder which hires firms like RENEW to help educate and invest in SMEs in Africa, love seeing capital come into local businesses. And these are important indicators to measure and track, but so few projects last long enough for the real magic moment, which is usually five years down the road when it happens and not immediately at closing. And thus we are left with a situation where many companies in Africa, especially social entrepreneurs and SMEs that struggle to attract capital, do not understand the true importance of an exit. So let’s explain.If closing an investment is akin to the start of the game, an exit is when you actually score a goal. I have found that the misunderstandings around exits hurt companies and countries, most notably when the critical time comes to begin exiting an investment. Often this is because the business of investing is a bit of a mystery. I believe there should be an entire training for non-finance stakeholders just on the importance of exits. While the idea that investors seek to make money is intuitive to most, the way an equity fund works is relatively new. It is an unfamiliar concept to many that a fund manager has a fixed period of time to find and invest the money they raised into good companies, and then recover that money in a fixed amount of time with a great return. And, while I believe a closed-end equity fund structure in Africa isn’t the best structure for the investment landscape of frontier markets, it is a common structure for equity investors, and one that stakeholders need to understand so they can work with it and attract more funding to their country. The more equity a country and a company attracts, often the better positioned it is for growth.<figure class="image"><img src="/uploads/exit_image_0_18a85873a9.png"></figure>Why are exits good? A good investor that builds a track record of successful exits attracts more capital and can make more investments. Companies in which investors exit often attract more capital, grow, create more jobs, pay more taxes, and provide greater value to customers. Countries where investors realize exits attract more capital because investors see that others have done it and local businesses benefit from this reputation.So exits are not just something that needs to be planned before you close an investment, but something that needs to be discussed regularly with multiple stakeholders throughout the life of the investment and, just as much, projects that seek to leverage private investment to achieve development objectives like the Sustainable Development Goals (SDGs).Entrepreneurs should understand that an exit by an investor is not a divorce but a graduation; hopefully a hand-off to the next level, be it to a larger investor, a strategic partner, or back to the owners themselves. Parties should be thrown for exits. Governments should know that an exit from their country is an indicator that their country is conducive to sustainable investing. They should give out awards to funds that exit their investments, because that event alone will attract the interest of serious investors more than any roadshow they do around the world. And development partners should design private sector development projects with timeframes long enough to see exits and chalk those up as major wins that resulted from their support.Since 2012, RENEW has been operating in East Africa, testing and perfecting an investment model that gets capital into SMEs trapped in the missing middle, helps them scale up and then gets that capital out with a good financial and social return for investors. After seven years of investing in the East African region, I am pleased to say that SME investing can be successful and exits are possible. I hope we see many more exits in the months and years to come, and I hope all stakeholders cheer, not just investors, when an exit happens. It’s the real score in the sport of investing and also enables the impact we are also seeking to achieve as success begets more investments targeting such goals as job creation by SMEs in East Africa.About the Impact Angel Network and RENEWMembers of the Impact Angel Network seek to realize both social impact and financial returns through investments in small and medium enterprises (SMEs) that are engines of economic growth and job creation in Africa but that often lack capital due to their size. IAN members believe that targeting employment through SMEs, dollar-for-dollar, can help reduce poverty in a more sustainable way than charity.RENEW, with its largest office in Addis Ababa, Ethiopia, manages the IAN’s investment operations and provides investment advisory and consulting services in support of its investments. RENEW’s work in Ethiopia was piloted with USAID and is currently undertaken with financial support from the Government of Canada provided through Global Affairs Canada for a project entitled Accelerating Business Growth (ABG). This project targets sustainable job creation for low-skilled workers, including women and young adults, through a dynamic and growing small and medium business sector in Ethiopia.

A few observations from our experience investing in a small and medium enterprise (SME).

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