The Managing Director of CAL Bank, Frank Adu Jnr, has urged his fellow business executives to support the development of the entrepreneurial ecosystem in Ghana.
Mr. Adu who is also a leading member of the Ghana Angel Investor Network (GAIN) challenged other leading business executives who were present at the cocktail event organized for members of GAIN in Accra.
Capital is not the only pain point for startups – research shows that new businesses have a higher success rate when they are supported by a robust ecosystem, inclusive of finance, mentors, business support services, human capital and the necessary policies to support private sector growth.
While GAIN provides a platform for startups to access capital, there has still been the need to build strategic partnerships with organisations who provide complimentary services and particularly in mitigating the risk associated with investing in startups to boost investor interest.
Some of the reasons investors shy away from startups include, the quality of the team and its ability to take the idea to market, effectively monitoring the startups to ensure financial discipline and last but not the least, providing an ease of exit for the investors.
For these reasons, GAIN’s strategic partnership with ServLed Africa, (the premier wholly Ghanaian owned Start-up accelerator) could not have come at a better time.
In introducing the ServLed team, Mr. Adu was very hopeful that the partnership will inure to the benefit of angel investors. He mentioned among others that ServLed will provide GAIN with quality ideas backed by a strong team of young entrepreneurs to build businesses around the ideas and take to market. He also mentioned that ServLed will put in place a solid frame-work to monitor the capital injection into the start ups and ensure attractive return on investment.
On their part, the co-founders of ServLed – Samuel Yeboah and FitzRoy Brown intimated that their past experiences in starting companies locally and delivering value to shareholders coupled with their intense passion to see several other African companies become sustainable is what drives their initiative.
Samuel said the model was created to alleviate the investment risks of investors by utilizing the resources provided by ServLed’s growth accelerator to manage the investee companies. Start up entrepreneurs go through a very highly selective admission process and those that make it join the accelerator program for six months during which they get to work with very highly accomplished mentors to build viable and scalable business models.
Answering the question on how easy it was for investors to exit, they explained – “A Special Purpose Vehicle (referred to as a Venture Capital Finance Company [VCFC]) is created and seeded by twenty (20) angel investors. The fund is then used to invest in a cohort of ten (10) start-ups or early stage companies to spread the risk for the investors. The VCFC will be listed on the Ghana Alternative Market (GAX) to provide liquidity and also create easy and reliable exits for the investors.
A strong reputation that is backed by solid performances on entrepreneurship indicators like the Global Entrepreneurship Monitor and the World Bank’s Ease of Doing Business table where it is ranked 4th in Sub-Saharan Africa, Ghana appears to be in an especially strong position to leverage entrepreneurship to create jobs for the youth and grow the economy.
With this partnership in place, there is no doubt that the entrepreneurship ecosystem in Ghana is ripe for turbocharging. Mr. Adu used the occasion to call on business executives and High Net worth individuals to join the network, adding “this is a great time to be part of a group of angel investors actively supporting the next generation of African business leaders”.
“What attracted me (as someone who resides outside Ghana) to the ServLed model is the lengths they’ve gone to mitigate post investment anxiety usually characterised by investment in this part of the world. Their portal allows investors to virtually monitor investments and offer input to their investee companies” – one of the investors was captured saying.
GAIN will continue to build strategic partnerships and welcomes enquiries from potential members both corporates and individuals. Leticia Browne, Investor Relations Manager at GAIN says that “Early stage investing is very critical and it is necessary that we continue to raise awareness for this asset class, engaging both local Ghanaian investors and investors in the diaspora”.
