<h1 style="text-align:center;">Desta: Building Sustainability</h1><a href="https://latest-api.renewcapital.com/uploads/Final_Impact_Report_2018_1b12d67377.pdf">Read our 2018 Impact Report</a>An Interview with Eyob Bekele (Desta Owner and General Manager). This blog is an excerpt from our 2018 Impact Report.According to Eyob Bekele, the General Manager of Desta PLC, “The Impact Angel Network’s investment keeps us on our toes and helps us stay focused to achieve the direction we want to go.”What direction is that? The family’s vision is for Desta to compete internationally and that vision is coming alive as part of a company expansion in a town called Butajira, outside of Addis. “Our current factory was never designed to be a garments facility, but Butajira is,” Eyob continued. “To increase our ability to compete with any company worldwide, we need a proper setup and Butajira is the answer. The first shed is completed, training workers have started and, in the factory, we have set up four lines.”<figure class="image"><img src="/uploads/pg_12_eyob_ad3289a373.jpg"></figure>The Bekele story is a classic story of transition. “My family wanted to enter into manufacturing after many years of trading. Our father has always wanted us to be internationally competitive and to do so, we knew we needed to move beyond trading,” Eyob said recently.“We were initially importers of plastic shoe soles from Italy, among other things, and we decided to start manufacturing plastic shoes and shoe soles in 1993. We slowly added new elements to our manufacturing including laces and cords. Then in 2010, the plastic shoe market was saturated, and we decided as a family that it was time to move on to a new market. At the time, the Ethiopian Government was encouraging people into horticulture and textiles because of the competitive labor market we have here. Because we already had the cord business we chose textile and garment and moved into knitting cotton fabric. Initially, we shipped the greige, raw cloth we knitted at Desta to Italy, but that market quickly closed as the Italians found they could get competitive, fully dyed fabric in Eastern Europe. Thankfully, at the time, we started getting orders for garments. We would make the fabric, outsource the dying, cutting and sewing and then ship the finished products to Italy. But that business had its challenges including really long lead time and in some cases compromised quality from all the outsourcing. Since we were already getting orders, we decided to enter the garments business fully in 2012. In 2013, we set up a few lines, began training workers and started to take more orders. We quickly realized when we made the garments, the knitting we could do did not justify the machines, because much of the finished fabric still needed to be imported. So we closed the knitting department and focused on garment production only. Then we started to expand. American and European buyers came and the more they came, the more we expanded. Our customers thankfully love us. They know we are committed to delivering no matter what.”<figure class="image"><img src="/uploads/pg_13_desta_0_4a1d890c1f.jpg"></figure>Eyob believes that sustainability must be the backbone of Desta. “We will not achieve our plans without sustainability. Whatever Desta does should have a profound impact to support the social and environmental ecosystem”. I want all stakeholders from investors to buyers to employees to our neighbors to feel like Desta is the right choice. Our workers have to feel like it is their company. When we are fully operational at Butajira, we will be able to achieve that including zero liquid discharge. We may even be the first to implement wastewater treatments related to garment production in Ethiopia. We will even have zero discharge related to human waste, and we will have rainwater collection at the new facility.”There are many things Desta does to help employees know they are part of a family including visiting their workers at home. “Their social problems are our social problems. We try to go and have a discussion with each worker. If they have a problem, we support them as much as we can. We provide a sustainable income so they can support their families. We work to create a friendly, family environment. Our workforce is typically ages 18-25 so, I believe we should be seen as parents or older siblings to them. We do a lot of soft skills training including, in some cases, training people to use a toilet, and how to avoid unwanted pregnancies and sexually transmitted diseases”.“We are committed to hiring people with disabilities including the deaf. We have a family member who has a disability, and we feel like just because you are disabled doesn’t mean you cannot work productively. We aim to employ 30-50 workers with a disability at any one time which is about 5-10% of our labor force.”“The women in Desta’s workforce play a significant role from the bottom to the top of the organization. About 90% of our workforce are women. A few have started as a cleaner and are now in management. We take women empowerment seriously and invest in soft skills,” Eyob said.

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Renew Capital Angels invested in Desta PLC, a textile and apparel manufacturing operation located in Ethiopia. The company produces and exports fabric and garments and provides cut-and-sew, knitting and embroidery services to domestic and international clients. Desta is committed to fair treatment of its employees and adherence to guiding principles of sustainability, setting it apart from the trajectory this industry has taken in many other low and middle-income countries.

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An Interview with Eyob Bekele (Desta Owner and General Manager).

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Desta: Building Sustainability

<h1 style="text-align:center;">The International Gathering Weekend!</h1>On May 17 and 18, 2019, we held our fourth <a href="https://www.renewcapital.com/what-we-do/investing">Impact Angel Network</a> International Gathering weekend in Washington D.C.! In case you weren’t able to attend, here’s a recap of the weekend:On Friday, Hussein Hirji and the team at the Canadian Embassy hosted RENEW’s Impact Angel Network for an amazing event. The rain held off and we were able to start our evening on the 6th floor terrace for a beautiful cocktail hour, overlooking the Capitol. After a fun RENEW “family” photo in our orange sunglasses, we headed down to enjoy an evening of great speakers and excellent food. The night was opened by Hussein Hirji who set the tone for the evening. Tom Scriven updated the crowd on our accomplishments. Matthew Davis and Joe Ritchie took the stage afterward to discuss Joe’s experience on the continent and his views on investing. Rahel Beyene, an entrepreneur in Ethiopia, shed some light on her company and what it means to be a female entrepreneur in Ethiopia. And finally, RENEW’s CEO, Matt Davis, closed out the evening with his thoughts on the future of RENEW and investing in Africa.On Saturday morning, <a href="https://www.faegrebd.com/en">Faegre Baker Daniels</a> hosted us at their offices for our IAN portfolio meeting. We had an engaging discussion about the state of our current portfolio and answered a number of questions about the challenges, lessons learned and opportunities of managing companies in emerging markets.<figure class="image"><img src="/uploads/ig_image_876ab0bebf.jpg"></figure>In the afternoon, IAN members joined the RENEW team at the National Museum of African American History and Culture for a few hours to go through the collection, followed by an afternoon wine tasting in Virginia.On Saturday evening, Matt &amp; Laura Davis hosted members at their residence for the IAN pipeline dinner during which we introduced new deals in our pipeline, which we will continue to work through over the coming months.We’d like to extend a final thank you to all our sponsors who helped make this weekend possible: <a href="https://www.canada.ca/en.html">Global Affairs Canada</a> and the <a href="https://international.gc.ca/world-monde/country-pays/united_states-etats_unis/washington.aspx?lang=eng">Embassy of Canada</a> (co-host), <a href="https://www.faegrebd.com/en">Faegre Baker Daniels</a> (Premium Sponsor), <a href="http://enlightenmentwines.com/">Enlightenment Wines</a>, <a href="https://kanterpr.com/">KANTER</a>, and <a href="https://limalimolodge.com/">Limalimo Lodge</a>.Looking for more ways to get involved?<ul><li><a href="https://www.renewcapital.com/apply">Apply to join the Impact Angel Network</a> and have access to deals, experiences and investment management services.</li><li>Travel to Ethiopia as part of RENEW's next IAN <a href="../../impact-angel-network/econ-tourism-trips.html">Econ-Tourism Trip</a> (Oct. 2019)</li><li>Connect with RENEW via <a href="https://www.facebook.com/RenewCapital">Facebook</a>, <a href="https://twitter.com/Renew_Capital">Twitter</a> and <a href="https://www.instagram.com/renewcapital/">Instagram</a>.</li><li>Read about our latest investment and our <a href="https://latest-api.renewcapital.com/uploads/RENE_Ws_2019_2020_Impact_Report_7f2975da8d.pdf">Impact Report</a>.</li></ul>&nbsp;

RENEW’s Fourth Gathering in Washington D.C.

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The International Gathering Weekend!

<h1>June Resource Blog</h1>Our June Resource Blog has a wide range of topics. Take a few minutes and read through the articles below for a look into lessons learned at a VC startup and managing a startup board, as well as an analysis of 10 seasons of Shark Tank.<ul><li><a href="https://venturebeat.com/2019/05/19/what-i-learned-as-a-vc-filling-in-as-a-startup-ceo-for-4-months/">What I learned as a VC filling in as a startup CEO for 4 months</a>: An investor spent four months as a CEO of a company when the company's CEO left and there was no succession plan for a replacement. The experience shows key takeaways of running a company from the vantage point of an investor. (Venture Beat)</li><li><a href="https://bothsidesofthetable.com/managing-your-startup-board-a-short-presentation-4d709772bc00">Managing Your Startup Board — A Short Presentation</a>: Usually, CEOs view the board as an administrative function instead of a value addition opportunity. This article discusses how a CEO should be managing its board, rather than letting the board micro-manage the operations, and why it is important to keep the board meetings at "board level". (Both Sides of the Table)</li><li><a href="https://thehustle.co/shark-tank-data-analysis-10-seasons/">Shark Tank deep dive: A data analysis of all 10 seasons</a>: This article covers the deal data from Shark Tank, the reality show where entrepreneurs pitch ideas to a panel of celebrity investors. Shark Tankjust wrapped up its 10th season, which means 222 episodes, 895 pitches, 499 deals, $143.8m worth of invested capital, and nearly $1B in company valuations. (The Hustle)</li></ul><figure class="image"><img src="/uploads/screen_shot_2019_06_04_at_12_36_30_pm_5252dcea21.png"></figure>

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June Resource Blog

<h1 style="text-align:center;">July Resource Blog</h1>Our July Resource Blog is designed to help guide your business. Take a few minutes and read through the articles below for a look into how beneficial checklists are, how consumers are learning marketing tactics, the Toyota Way (principles and behaviors which drive their company) and lessons from Jeff Jordan, the founder of a VC firm who has worked with big brands around the world.<ul><li><a href="https://blog.nuclino.com/the-simple-genius-of-checklists-from-b-17-to-the-apollo-missions">The Simple Genius of Checklists, from B-17 to the Apollo Missions</a>: No amount of wisdom in a given field makes us immune to forgetfulness. Implementing a checklist lightens our cognitive load, frees up our attention and allows us to focus that hard-earned knowledge on higher level problems. (Nuclino)</li><li><a href="https://en.wikipedia.org/wiki/The_Toyota_Way">The Toyota Way</a>: The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and production system. Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it "The Toyota Way 2001". It consists of principles in two key areas: continuous improvement and respect for people. (Wikipedia)</li><li><a href="https://behavioralscientist.org/consumers-are-becoming-wise-to-your-nudge/">Consumers Are Becoming Wise to Your Nudge</a>: Would the general public spot a pattern in the way that marketers are using behavioral interventions to influence their behavior? Are scarcity and social proof messages so overused in travel websites that the average person does not believe them? Do they undermine brand trust? (Behavioral Scientist)</li><li><a href="https://fortune.com/longform/jeff-jordan-vc/">Lessons From the VC Who's Seen It All Before</a>: How Jeff Jordan is applying what he learned during his time at Disney, eBay, and OpenTable to help founders at Airbnb, Pinterest, and Instacart. (Fortune)</li></ul>Interested in learning more about a specific topic? Contact us and let us know what interests you at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>.<figure class="image image_resized" style="width:100%;"><img src="/uploads/screen_shot_2019_07_01_at_7_51_21_am_0_a9a5bebd39.png"><figcaption>Image Source: Fortune: <a href="https://fortune.com/longform/jeff-jordan-vc/">Lessons from the VC Who's Seen it All Before</a></figcaption></figure>

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July Resource Blog

<h1 style="text-align:center;">The Fourth Annual Impact Report</h1><a href="https://latest-api.renewcapital.com/uploads/Final_Impact_Report_2018_1b12d67377.pdf">Read our 2018 Impact Report</a>RENEW announces the Impact Angel Network’s (IAN) 2018 Impact Report. This edition of RENEW’s Impact Report is entitled “A Journey of Impact” and for good reason. Yes, we will give you an overview of the impact of our entire portfolio, but in the report’s pages, we will also do a deep dive into one company, Desta PLC, a garments manufacturing facility. This edition explores various aspects of the impact of the company from the perspective of several stakeholders. Join us through the following pages as we hear stories from Laura Davis (partner at RENEW), Eyob Bekele (owner and general manager at Desta), Lulit Negash (RENEW’s portfolio manager for Desta), Beth Marquette (an Impact Angel Network investor), and Tadelech Buto (a Desta employee). Everyone’s story is different, but each individual plays a key role in the growth and impact of this company that is a leader in the fast-growing textile industry in Ethiopia.With 11 investments in 10 companies as of the end of December 2018, RENEW and the IAN now support 2,193 jobs (71% are held by women) and 5,700 smallholder farmers.Read our past Impact Reports:<ul><li><a href="https://latest-api.renewcapital.com/uploads/RENEW_Impact_Report_2017_c0d6c8251c.pdf">2017 Impact Report</a></li><li><a href="https://latest-api.renewcapital.com/uploads/RENEW_LLC_Impact_Report_2016_d7bb848962.pdf">2016 Impact Report</a></li><li><a href="https://latest-api.renewcapital.com/uploads/RENEW_LLC_2015_Impact_Report_70af8f917c.pdf">2015 Impact Report</a></li></ul><figure class="image"><img src="/uploads/impact_report_3_40a378673c.png"></figure>Note: The information included in the Impact Report relating to the performance of Impact Angel Network (IAN) portfolio companies is preliminary and has not been audited. Information about any one company in the portfolio, such as Desta PLC, is provided as a recounting of the IAN’s interactions with one company its members have invested in and happenings at that company. Such information is not intended as performance data related to the IAN’s investment in the company described. Information about one or more IAN portfolio companies pertains only to the company/ies described and may not be indicative of other companies in the IAN’s portfolio or the performance of investments in them. Any discussion of the performance of companies or investments or their social impact is no guarantee that such performance or impact will be realized by other IAN portfolio companies or investments or in the future.

RENEW’s 2018 Impact Report, “A Journey of Impact”

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The Fourth Annual Impact Report

<h1 style="text-align:center;">Visiting Ethiopia: How Traveling to Addis Deepened my Understanding of RENEW</h1>After working for RENEW for almost 6 months, I finally had the chance in early March to travel to Ethiopia to meet our team and see the office. Prior to this point, I thought I understood RENEW – I had finally mastered the names, industries and investment structures of each of our portfolio companies, and I had worked (remotely) with most of the team and had the chance to negotiate with a few of our entrepreneurs. I could recite RENEW’s mission statement and values, and I thought I had a grasp of the various challenges we faced in the work that we do. I still had a few questions, like: what do our portfolio companies actually look like? does the internet actually go out that much? and is the coffee actually that good? But I felt confident I already had a firm grasp of all things RENEW.<figure class="image"><img src="/uploads/img_6904_2_1_0_77e0e78191.jpg"></figure>It only took a few hours in Addis to rid me of that notion. Addis was much like what I expected, except for the sheer number of pedestrians and the traffic. I’ve never seen driving like I saw in Addis (and I live in NYC!). Shortly after landing, I joined our investors on their site visits as part of the <a href="../../impact-angel-network/econ-tourism-trips.html">Econ-Tourism Trip</a>. Upon stepping inside Desta’s factory, it quickly hit me: the work we are doing is even more significant than I had thought. It’s one thing to know, on paper, the number of investments we have and the number of jobs those support, but it’s another thing to witness it firsthand. The scale and volume of production at Desta was inspiring, not to mention the impressive new factories at KROTAJ and Sadura and the state-of-the-art ambulances at Tebita. All of it was remarkable to see in person and to know that our work helped to build it.On the third day of my trip, I arrived at the office bright and early to sit in on a session of The Exec’s Program. This was my first real day in the office. As the session wrapped up, many of the entrepreneurs stayed around to visit with each other, catch up with the RENEW team, or have coaching sessions with Matt. This is when I realized: we are doing so much more than I had appreciated. We had a new cohort of entrepreneurs participating in The Exec’s Program on Thursday morning, a new group of finance professionals attending the CFO100 on Tuesday night, and countless meetings, coaching sessions, and planning and strategy sessions in between. On top of that, we were hosting investors and GAC representatives, prepping for filming Chigign ‘Tobiya and sourcing new investments for our all-women investment package. It was hard to keep track of the number of people that came in and out of The Exchange during my two weeks there. The office is a constant flurry of activity and really does serve as a platform to share ideas and fuel growth.<figure class="image"><img src="/uploads/img_6899_2_6b61e6d5d8.jpg"></figure>That same afternoon, we hosted representatives from GAC. By sharing war stories with them over lunch and hearing more about their viewpoint as our development partner, it became clear: the work we are doing is much more challenging than I had realized. There are challenges here I had never even contemplated. Of course, we face the typical challenges of finding investments, negotiating deals and running a business. But we are simultaneously educating the entrepreneurs about private equity, financial and accounting practices, and good corporate governance. We are working across cultures, between our North American and European investors, our international RENEW team and our Ethiopian and Ugandan entrepreneurs. And we are working at a cross-section of ideas and investment philosophies, where private capital meets the public sector meets the philanthropic sector. Take all of these competing ideas and viewpoints, sprinkle in some Addis traffic, power and internet outages, and the muddy road to The Exchange when the rains come, and our RENEW team faces daily challenges, big and small.Which leads me to my last and most important realization from the trip: just how fantastic of a team RENEW has and how great the RENEW team works together, to overcome these challenges, persevere and excel. (And, yes, the internet often does go out that much, and the coffee really is that good!) &nbsp;

Observations from Kirsten's first trip to Addis

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Visiting Ethiopia: How Traveling to Addis Deepened my Understanding of RENEW

<h1 style="text-align:center;">May Resource Blog</h1>Our May Resource Blog focuses on resources to help grow and succeed in business. Take a few minutes and read through the articles below for a deeper understanding on how to build your company, the pros and cons of an advisory board, and how to stop your phone from being a distraction.<ul><li><a href="https://medium.com/s/please-advise/what-seven-years-at-airbnb-taught-me-about-building-a-company-e1d035d49c56?sk=ccd328f7c5ea669d3c951486e6bc28a9">What Seven Years at Airbnb Taught Me About Building a Company</a>: A founder who sold his startup to Airbnb shares his insights on how to build a company based on his experiences at Airbnb. (Medium)</li><li><a href="https://www.fastcompany.com/90328314/startups-proceed-with-caution-before-forming-an-advisory-board">Startups: Proceed with Caution Before Forming an Advisory Board</a>: A panel of expert counsellors sounds like a great idea, but “big-name” advisers can be a time suck with little payoff. (Fast Company)</li><li><a href="https://www.nytimes.com/2019/04/01/smarter-living/how-to-make-your-phone-limit-your-screen-time-for-you.html">How to Make Your Phone Limit Your Screen Time for You</a>: As focus is becoming scarce, the latest iPhone and the newest version of Google’s Android come with tools to limit how much time you stare at your screen. Here’s how to make them useful instead of nags you’ll eventually turn off. (NY Times)</li></ul><figure class="image"><img src="/uploads/screen_shot_2019_05_07_at_9_21_30_am_0_ad5f2c455b.png"><figcaption>Image Source: Fast Company: <a href="https://www.fastcompany.com/90328314/startups-proceed-with-caution-before-forming-an-advisory-board">Startups: Proceed with Caution Before Forming an Advisory Board</a></figcaption></figure> &nbsp;

Resources to help you grow and succeed in business.

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May Resource Blog

<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;">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