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African telecoms mogul and philanthropist Strive Masiyiwa has urged African policymakers, entrepreneurs, and investors to rethink their approach to financing startups, emphasizing the need for a robust Venture Capital (VC) ecosystem to unlock the continent’s economic potential. In a recent LinkedIn post, Masiyiwa highlighted how Silicon Valley, China, Israel, and India have successfully built billion-dollar enterprises through venture funding, while Africa lags behind due to structural and policy barriers.

“Tell me that is not what YOU want?” Masiyiwa asked, referencing how young innovators in other parts of the world secure funding simply by presenting a strong business plan, without needing collateral or bank loans. He pointed out that global success stories such as Bill Gates, Elon Musk, and Mark Zuckerberg did not come from wealthy families but were supported by a well-structured VC system that nurtured their ideas into thriving businesses.

Understanding Venture Capital: A Game-Changer for African Entrepreneurs

He outlined four key players in a well-functioning Venture Capital ecosystem:

  1. Limited Partners (LPs): These are pension funds, life insurance companies, or high-net-worth individuals who allocate a portion of their money to invest in startups.
  2. Venture Capital Companies (VCCs): Run by experienced business leaders, these firms receive funding from LPs and invest in promising startups.
  3. Entrepreneurs: Visionary business leaders with high-growth potential who need funding to scale their ideas into profitable companies.
  4. Stock Exchanges: Essential for enabling startups to go public through Initial Public Offerings (IPOs), allowing VCCs and LPs to cash out and reinvest.

This model, which has fueled innovation in the United States, China, and India, is severely underdeveloped in Africa, Masiyiwa noted. He attributed this to three major factors:

  1. Lack of Knowledge: Many African policymakers remain fixated on traditional banking models instead of understanding how venture funding builds wealth in advanced economies. He called on governments to actively promote the VC ecosystem by engaging with global best practices.
  2. Risk Aversion: Venture Capital inherently involves high risk—seven out of ten funded startups may fail, but the few that succeed become industry giants. Educating investors and policymakers on long-term returns is crucial.
  3. Enabling Policies: While countries like South Africa, Kenya, and Nigeria have some VC firms, they are too few compared to banks. Governments must introduce tax incentives and stock exchange reforms to make funding young companies easier.

Africa’s Path Forward: Action, Not TalkMasiyiwa challenged African entrepreneurs to lobby their governments, citing how local governments in China have played a key role in fostering innovation. He urged business leaders to engage policymakers via social media, organize discussions, and advocate for VC-friendly regulations.

“There should be ten times as many VCCs in your country as there are banks,” he emphasized.

He also encouraged young entrepreneurs to form WhatsApp and online groups to collaborate and push for change. In his view, Africa has the potential to produce its own Silicon Valley, but only if stakeholders take decisive action.

A Legacy of Empowerment: Beyond his role as a business leader, Masiyiwa has been a driving force in education, mentorship, and philanthropy. Through Higherlife Foundation and Delta Philanthropies, his family has provided over 300,000 scholarships to African students. His influence extends globally, serving on the boards of Netflix, the Bill & Melinda Gates Foundation, and the National Geographic Society.

For Masiyiwa, venture capital is not just about business—it is about transforming Africa’s economic landscape, fostering innovation, and empowering the next generation of entrepreneurs.

As Africa stands on the brink of a tech revolution, the question remains: Will policymakers and investors embrace the call to action?

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