<h1 style="text-align:center;">Are We Losing their Hearts and Minds…Because of our Wallets?</h1> For the past six years I have been traveling in Africa and South Asia. I have spent most of that time in East Africa, where the United States has long been the dominant “goodwill” country. With initiatives like PEPFAR and the Millennium Challenge Corporation, Africa fell in love with “Bushy,” and had high hopes for President Obama, with his paternal roots in Kenya. I have long enjoyed the strength of the American brand as a businessman traveling in Africa. But on my last trip, I noted a significant change.Our company does two things: One, we find and assess small and medium size enterprises (SMEs) investment opportunities in developing countries, and two, we connect those opportunities to angel investors. There’s a lot more technical stuff involved, and some amazing investor trips, but mainly we do transactions — brokering deals for "impact investors."Connecting investors to good investments in Africa and other developing countries has not been easy, seeing as most Americans hold an inaccurate perception about what is actually happening on the ground. Nonetheless, we are starting to see some interest from investors. We have even started to organize angel investors for investments in Afghanistan.Back to Africa…as I travel I always keep a close eye on who is making moves on the continent. If you have been reading the news from Africa for the past few years you understand why I keep a close eye on China. China’s presence in Africa is not new. They have been working in some of the hardest countries in Africa for years. The general sentiment in Africa, with its many different countries and cultures, is concern about China’s presence. I experienced a clear example of this three years ago at the Hilton in Addis. A group, who I believe were Chinese diplomats, walked into the business center in the hotel. One of them was confronted by, what appeared to be a disgruntled Ethiopian man in his mid-thirties. If you have met Ethiopians, you know that they are some of the gentlest people on earth. I was shocked by his outburst, and clearly so was the Chinese woman who was verbally assaulted. His attack was swift, direct and memorable: “Why are you in my country? I want you out!”So, on my recent trip to Ethiopia I assumed the sentiment would still be the same, even worse given the impressive advances China has made throughout the continent. I was wrong.The shock didn’t hit me at first, because I was still living in the memory of the scene from the business center. I’d ask question, like I always do, about the Chinese: Where are they investing? Why? Is it working? Who are they working with? What are the perks, etc.? The questions go on and on. For a long time I have been rewarded with scowling faces and answers like, “Roads, because they want to get mining consignments.” Or “They work very hard, but they treat us poorly.”For the first part of my recent trip around East Africa, this is exactly what I heard. I was even rewarded with a “They [the Chinese] are coming here by the thousands. You need to do something!” Now, I honestly think most of these were genuine statements from concerned friends, diplomats and entrepreneurs. But it wasn’t until Ethiopia where I was given a little dose of reality.I don’t know if it was irony given that I was back in Ethiopia, or that I finally spoke with someone that was not afraid to tell me the truth. Either way, the answers I was given did not tell the story I was used to hearing about China in Africa. The story is changing. And what’s more, so has Africa’s story about the United States.This is what happened: I was driving around with a successful Ethiopian entrepreneur looking at his stone crushing plant and a few other projects he is working on. Like most successful entrepreneurs in Africa, I am always fascinated and a little skeptical (hey, I get paid to ask questions) about how he “made it.” Nonetheless, I really liked this guy and he matched the profile we like to look for (I’ll save that for another post.). As I worked through my series of questions I finally got to the ‘China section.’ “What are your thoughts on China?” I asked. “Oh, they are great! We do tons of business with them. They are our largest trading partner, and we have been working with them on a number of projects.” His enthusiasm caught me off guard. I wanted to stop my questioning, afraid that if I scratched much deeper I would find out just how much sentiments towards China are changing.I am an American who encourages high net worth individuals (angel investors) to invest in SMEs in developing countries. It’s a new model for economic development, but it’s also a model for foreign diplomacy. In my humble opinion, diplomacy in Africa is more about business than it is policies or health initiatives, or aid.Entrepreneurs generally know what I do, and they know what to say about China to fire me up about the need for America to get involved with business in Africa. But this conversation ignored all of that. He didn’t sugarcoat his answer, or roll his eyes about the Chinese, or complain of their cheap goods, or talk about how they are corrupt, or throw his arms up asking why the Americans aren’t investing. He smiled and shot me a straight answer… “they are great!”I am not saying that everyone who has complained about what China is doing in Africa was lying to me, but maybe I have been getting some theatrics. The reality is that China’s economic success in Africa is dwarfing the U.S. — the international leader of capitalism. And these efforts on the part of the Chinese have begun to win the hearts and minds of the people. It’s not just about damns and roads and mining projects; it’s about trucking companies and textile factories and coffee farms. And yes, the Chinese do build nice hospitals, like the one they just constructed south of Addis. Ethiopia loves it. Read this from a newspaper:“The hospital is historical as it is named after the renowned athlete Tirunesh Dibaba, he said, adding it would further help to enhance the people to people relations of the two countries [China and Ethiopia].”There’s a whole <a href="http://et.china-embassy.org/eng/zagx/">website</a> on the China-Ethiopia relations. On the site are links to aid being given to Ethiopia alongside news of shoe companies wanting to invest, and investors interested in the cotton industry. The truth is that China has learned that the hearts and minds of the people can be won by working with them, giving to them, and investing in them.In the United States, we have taken a hard position on things like bribery, which we say the Chinese do almost blatantly. We are also doing amazing development projects all across the developing world that get little media exposure. Being an American visitor in these countries, I can imagine the frustration of our policy makers when the U.S. influence is so clearly diminished. As a Kenyan so eloquently put it, "we've turned our back to the West to face the rising sun." An outdated cliché but it still delivers a sting.So China is gaining favor in Africa and the U.S. is losing it. But thankfully, I don’t think it’s too late to try something new. It involves the U.S. Government doing what the Chinese are doing; taking a more active role in facilitating investments. And not just huge, massive infrastructure investments; I am talking about investing into SMEs—the backbone of any economy. I have had the honor of spending time with some amazing businessmen and women in the U.S. who know the value of entrepreneurship and the benefits that come from the investor/investee relationship. Our Government needs to get creative about how to efficiently facilitate these relationships.We’re missing out on a major opportunity for diplomacy through business, investing and good old-fashioned capitalism. China is winning in Africa by using this strategy and it feels like we’re stuck. Is it time for the U.S. to try something new?

For the past six years I have been traveling in Africa and South Asia.

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Are We Losing their Hearts and Minds…Because of our Wallets?

<h1 style="text-align:center;">Photos from Ethiopia</h1> Photos from our recent fact-finding trip to Ethiopia:<figure class="image"><img src="/uploads/2011_August_Ethiopia_f9549fda1a.jpg"></figure>

Enjoy photos from a recent trip to Ethiopia.

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Photos from Ethiopia

<h1 style="text-align:center;">Photos from Afghanistan</h1>Photos from our recent trips to Afghanistan:<figure class="image"><img src="/uploads/Afghanistan_Collage_c5ac6e61c9.jpg"></figure>

Enjoy photos from our recent trips to Afghanistan.

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Photos from Afghanistan

<h1 style="text-align:center;">Afghanistan Portfolio Update</h1><figure class="image image_resized" style="width:100%;"><img src="/uploads/renew_banners_afghan_7_47313654ae.png"></figure>Afghanistan. ICT. SMEs. Herat. TFBSO. One hundred meetings later, the RENEW team has identified a portfolio of six good ICT SMES. Several are located in Herat. Several are based in Kabul with plans to expand to Herat. There is more happening in ICT in Afghanistan than one would expect. We have a number of investors interested in our new model, and we are excited to help formulate the first angel investment group for Afghanistan. &nbsp;

...the RENEW team has identified a portfolio of six good ICT SMES.

Afghanistan Portfolio Update

<h1 style="text-align:center;">Afghanistan: Looking Beyond the News</h1><figure class="image"><img src="/uploads/DSC_0012_1_0_0964633060.jpg"></figure>Herat is in the news more and more these days, and not for good reasons. But from where I sit, I have hope that these blips of bad news represent the darkness that comes before dawn. The stories that fuel my hope are in front of me every day as I go about my work here. I see the dawn coming in the form of business owners who are making it despite pretty significant odds, the university students that are going to school and starting businesses, people buying and selling goods everywhere, new manufacturing facilities going up in the nearby industrial park, semitrailers packed to the gills with goods swaying down the road to market. Despite 30 plus years of war, the economy is showing signs of growth.<figure class="image"><img src="/uploads/DSC_0188_2_cfd7bc533d.jpg"></figure>According to the <a href="http://www.aisa.org.af/">Afghanistan Investment Support Agency (AISA)</a>, there was only one telephone landline per 1,000 people in 2002 and no Internet Service Providers (ISP). As of 2010, Afghanistan is leapfrogging over the lack of copper lines and there are 13.3 million cellular subscribers, serviced by five main GSM operators. Their towers now cover 80 percent of this mountainous country. The cost of activating a cellular phone has dropped from $200 to $25 dollars. What a story of how investment can change even a war torn landscape in less than 10 years.Local experts estimate that 20 to 25 percent of Herati’s now have laptop or desktop computers in their homes. Five years ago, the average person didn’t know about the Internet or have an email address, but that is all changing as Afghanistan comes online. There is opportunity everywhere I look...Who wants to be a part of Afghanistan’s next big ICT growth spurt? I know some great entrepreneurs looking for partners. Contact us at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> or follow us on Twitter @RENEWLLC to find out more. &nbsp;

Herat is in the news more and more these days, and not for good reasons.

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Afghanistan: Looking Beyond the News

<h1 style="text-align:center;">Case Study: Afghanistan</h1>PIONEERING A NEW MODEL FOR ECONOMIC DEVELOPMENT<figure class="image image_resized" style="width:100%;"><img src="/uploads/graphic_renew_afghanistan_web_d0529c4229.png"></figure>RENEW was hired by the U.S. Department of Defense to attract impact “angel” investors to Afghanistan. RENEW spent six months working in Afghanistan to build a vetted portfolio of investment opportunities for investors.We organized a group of angel investors in Washington, D.C. for a retreat to preview the portfolio, and then escorted them to Afghanistan to attend a “deal show” to meet with local entrepreneurs. Entrepreneurs received pre-investment support from experienced financial analysts, training and coaching from investment professionals, and were then introduced to seasoned investors.The investor group is currently working with the U.S. government to set up an impact fund, and continue to explore other opportunities in Afghanistan. Key deliverables included:-A portfolio of vetted SME investments -An Afghanistan Angel Group -A matchmaking “deal show” in AfghanistanKey outcomes were that SMEs in RENEW’s portfolio received over $1M in investments from local and foreign investors.FIND OUT MORE ABOUT OUR PROJECTS IN AFGHANISTAN:<a href="https://www.renewcapital.com/newsroom/Afghanistan%20Looking%20Beyond%20the%20News" target="_blank" rel="noopener noreferrer">Afghanistan: Looking Beyond the News</a><a href="https://www.renewcapital.com/newsroom/Photos%20from%20Afghanistan" target="_blank" rel="noopener noreferrer">Photos from Afghanistan</a> <a href="https://www.renewcapital.com/newsroom/No%20Guts%20No%20Glory" target="_blank" rel="noopener noreferrer">No Guts. No Glory.</a> <a href="https://www.renewcapital.com/newsroom/Afghanistan%20Portfolio%20Update">Visit RENEW's Afghanistan Blog Page</a>

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Case Study: Afghanistan

<h1 style="text-align:center;">Herat Phase 2...</h1>After a month back in the United States gauging interest among private investors, the RENEW team is returning to Herat to continue our work of finding and assessing high potential ICT businesses (SMEs). Our initial findings from the first month in Herat were good and we have several promising entrepreneurs who rose to the top as candidates for the project’s portfolio.<figure class="image"><img src="/uploads/DSC_0085_0_20c42932e3.jpg"></figure>Though Afghanistan is a stretch for some investors, our initial response from the U.S. and regional investors, whom we have approached, has been surprisingly positive. This illustrates the public's desire to get involved with development. It’s a monumental accomplishment to attract private investment for SMEs in Afghanistan, and the RENEW, IBM and The Clearing teams are working hard in both Afghanistan and the United States to achieve this goal.Things the Herat-based team is excited about:<ul><li>Participating in and encouraging the economic bustle of Herat City</li><li>Spending time with entrepreneurs and hearing their stories and visions</li><li>Rolling up our sleeves and diving into our due diligence process with the businesses</li><li>The strength of the RENEW team and the partnership with IBM, The Clearing and the Task Force</li><li>Our great security team</li><li>The depth, quality and potential impact of the project</li></ul>Things the team is not excited about:<ul><li>Kabul airport</li><li>Choppy internet</li></ul>

...the RENEW team is returning to Herat to continue our work with ICT businesses...

Herat Phase 2...

<h1 style="text-align:center;">No Guts. No Glory.</h1> Dust burns our eyes as we survey the city of Herat, Afghanistan from the rooftop of our hotel (<a href="https://renewcapital.com/new-strategy/afghanistan">read about the project</a>). The streets below are humming with signs of a country coming back to life after 30 years of war. Shopkeepers hawking products, motorcycles weaving in and out of heavy traffic, couriers moving good from shop to shop, and cafes peppered with shrewd businessmen working deals with soft voices. &nbsp;<figure class="image"><img src="/uploads/DSC_0051_e748cc3590.jpg"></figure>For over five years the RENEW team has been implementing market-based strategies to accelerate the development of economies in emerging markets. Our role to connect investors to businesses opportunities in the developing world is growing in demand as investors and philanthropists alike seek to create greater impact from their capital.Promising small- to medium-size enterprises (SMEs), ripe for investment, exist in countries all over the world like Uganda, Rwanda, Afghanistan, Mozambique, and many other countries. Yet, despite their amazing ability to exist in some of the most challenging business conditions imaginable, their growth often stalls at a critical point in their life cycle. Why? When many entrepreneurs in the U.S. and Europe get a loan from a local bank, access to affordable growth capital for SMEs in developing countries is almost impossible to find.Entrepreneurs running SMEs struggle to get the collateral needed to qualify for an affordable bank loan needed to buy equipment, floor space, land or other capital assets to expand their operations. As a result, they stay small. And this is why many developing economies have a distorted economic pyramid; at the top are large infrastructure projects financed by foreign governments (roads, dams, trade zones), and at the bottom are micro-businesses getting small loans from micro-finance organizations (artisanal shops, small farmers, etc.) In the middle, the numbers of SMEs are proportionately fewer. This "missing middle” is where RENEW sets out to engage the global investment community.SMEs are becoming known for their ability to accelerate and stabilize the growth of an economy, as they have in China (<a href="http://www.economist.com/node/18332610">Read Bamboo Capitalism</a>).RENEW finds these SMEs and connects them to investors. Our goal is to make investing in a business in Uganda as straightforward to a person in Minneapolis as buying their second home – of course, adding an amazing experience in a far away place that home buying doesn’t offer.RENEW and our partners at IBM and The Clearing have recently been asked by the U.S. Government to help stimulate the middle market of Afghanistan using the same market-based model we have used in many countries across Africa.After being on the ground here, it’s amazing what stories are NOT being told about Afghanistan in the international media. We hope you stay connected with us as we continue to work here and in other regions of the world. We also want to thank you for your continued support. Please follow us as we document our progress in Afghanistan. &nbsp;

Dust burns our eyes as we survey the city of Herat, Afghanistan...

No Guts. No Glory.

<h1 style="text-align:center;">Video Blog from the Citadel</h1> Here is a first hand report on the ICT SME space in Herat, Afghanistan.<figure class="media"><oembed url="https://youtu.be/9u2aC8abLig"></oembed></figure>