Africa's Venture Capitalists Give a Raw Deal to Student Entrepreneurs

Published on 6th May 2008

Randall Pinkett, the self made millionaire in one chapter of his book 'Campus CEO: The student entrepreneur's guide to launching a multi-million dollar business' emphasized the issue of financing the businesses of student entrepreneurs.

As Randall notes, several universities in the United States and other developed countries of the world are very supportive of student entrepreneurs. Many universities organise annual Business plan competitions in their Campuses in which students of the University present their business ideas and business plans before a committee of well-established, seasoned and experienced business scholars, analysts and venture capitalists who review the students' prospective business plans.

At the end of the day, based on the strengths and prospects of their respective business plans, winners are selected and stand to win cash prizes ranging from $10,000, $20,000, and in some cases, even as much as $100,000 to boost their start-up businesses. For those students who do not win the competition, a category of venture capitalists scout through the Business plan entries, eagerly seeking potential ventures to finance the same. Many big time corporations eventually spring up from these business plan competitions. Elsewhere, venture capitalists consider Universities the best place to find start-up companies that would be the 'Next big thing.'

Do any universities and colleges in Africa support student entrepreneurs, organise business plan competitions and fund student businesses which have mega potential? In the West, universities are eager to support student entrepreneurs and even go out of their way to look for students with exceptional business ideas. Due to this kind of support, many big time corporations have sprung up from dormitories  in US campuses.

Apart from the fact that massive corporations are established, the schools where these ventures are established are instantly propelled to world fame. Stanford University, for instance will forever occupy a pride of place among the list of the world's most elite Universities considering that companies like Yahoo and Google sprung up from there.

But how about Universities in Africa- Kenya, Tanzania, Nigeria or Uganda? Where are you going to find venture capitalists in Kenya or elsewhere in Africa who will be willing to swallow their pride and listen to a student entrepreneur armed with a world-shaking idea? Bright ideas need not come from the West alone. African students also have potential earth-shaking ideas-maybe even bigger than Google, Yahoo, Dell and Napster (all ventures begun by student entrepreneurs), but they are still waiting to see the light of day due to lack of capital. African entrepreneur students equally have business ideas that can grow into a big corporation, change the world and make lots of money.

A close friend of mine in Nigeria once had a crazy technology idea which needed only a few thousand dollars to kick off with. Approaching banks and other so-called 'venture capitalists', he was snubbed extensively, discouraged and told to face his studies. Annoyed and frustrated, he eventually got a scholarship in Canada. Within six months, he secured the funding he needed, and as I write, his company's value is in the multi-million dollar range. His financiers have had an almost 200% return on their investment in barely twelve months of operation. 

We have such bright student entrepreneurs in Africa. But until African financiers and the self-proclaimed 'Venture capitalists' are easily accessible and listen to student entrepreneurs in our African Universities, Africa may never have its own answers to internationally famed corporations like Google, Yahoo, Ticket Advantage, College Humor and Face book which were all the brainchildren of student entrepreneurs. We need financiers who will believe in and support the dreams of African student entrepreneurs and get those big ideas out of the boxes and put into use to transform our continent.

African student entrepreneurs are equally smart, gifted and visionary. If various African governments support them, world-changing ideas would come from this continent wrongly perceived as poor and lacking innovation. Will the venture capitalists in Africa please stand up?

 


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