The entrepreneurs, business angels and venture capitalists behind the start-ups of the last 2 decades are still looking for the "next big thing" to bet on. A small number of these are beginning to bet on Africa. The eVentures Africa Fund launched last month is one of these.

Even by the risk-hardened standards of America and Europe's entrepreneurs, this is a bold move. Working in Africa presents some phenomenal challenges. There are not only gaping cultural differences, but also weaker commercial laws, higher overhead costs when working across continents and less liquid stock markets.

Most investors who have ventured here have either given up the aim of profitability in favour of more philanthropic goals (e.g. E+Co), or restricted investments to very large sums in the millions (e.g. Actis), in order to justify the huge overhead costs and lower returns.

The eVentures Africa Fund promises to make no such compromises. This fund plans to invest €25 to 250 000 in companies and generate "attractive financial returns for investors" alongside strengthening enterprises, developing economies and creating jobs. Quite some claim.

Why is this so exciting? For two reasons. Firstly, because the vast majority of African entrepreneurs don't need millions to start their business ventures; they need tens to hundreds of thousands. Secondly, if an investment fund is for-profit rather than non-profit, it can move beyond dependency on applying for millions of dollars from donors and foundations, and can tap into the billions available through international financial markets.

This is a risky gamble with high rewards - which makes is a fitting playing field for venture capital. But in order to succeed, the managers of the eVentures Africa Fund are going to have to have to show at least as much skill and innovation as the entrepreneurs in whom they invest.

Maurice Pigaht is an entrepreneur involved in two energy start-ups in Rwanda and a consultant on renewable energy, development aid and private sector development.

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I hear much talk about how the Nigerian information and communication technology industry is the 2nd largest industry in Nigeria, right behind Oil and Gas, but I don't believe it. Why? Because if ICT were really such a large part of Nigerian economy, we'd hear about a thriving venture capital community that's support it.

Who is investing in ICT?

Who are the Nigerian Venture Capitalists?

Recently on the Naija IT Professionals newsgroup, we were presented with a list of Nigerian venture capital companies. But in researching the VC's Internet footprint, I only found these to be viable organizations:

• African Capital Alliance
• Bank of Industry, Nigeria
• Areos Capital
• First Funds
• AfriCap
• AfricInvest
• Unique Venture Capital

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Do any Nigerian Venture Capitalists focus on ICT?

One key aspect of Silicon Valley's dominance of the ICT sector, in everything from hardware, to software, to services, is the tight interplay between VC's and the surrounding technology companies. VC's provide the rick and patient capital that helps two college students go from garage fiddling to Hewlett-Packard, Apple, Microsoft, and Google.

Yet, if we look at the Nigerian ICT landscape, there are few, if any standout VC's. I checked each organization's portfolio from those listed above, I didn't see a focus on the ICT industry, or even the mention of ICT company investments.

No VC's? Then no large-scale ICT industry

Now why does this matter? Couldn't the Nigerian government, funders of some much else, also become the venture capitalists? As Paul Graham notes in his How to Be Silicon Valley post, VC's do matter more than government:

Do you really need the rich people? Wouldn't it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. This (a) helps them pick the right startups, and (b) means they can supply advice and connections as well as money. And the fact that they have a personal stake in the outcome makes them really pay attention.

Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue-- or perhaps more accurately, Vogue editors running a math journal.

So in the end, I don't believe that ICT is the 2nd largest in Nigeria. If there are no high-profile VC's, there can't be the Silicon Valley that can spawn a sizable technology ecosystem. In fact, how can Nigeria's technology industry be of any decent size when the World bank says that Sudan and Zimbabwe have higher Internet penetration than Nigeria?

If you're looking for Venture Capital funding for your African business, here are several resources you can use to get equity financing:

• Venture Capital Ning Group
• Startups Nigeria
• African Venture Capital Association

Also, be sure to look at the ICTworks Venture Capital posts to keep current on our findings around financing.

Last but not least, please add any resources you know of in the comments below.

If you ask any parent from Kenya to Ghana, they'll all agree they want their children to have access to educational information and communication technologies like computers and the Internet. But often they cannot afford a computer themselves, much less Internet access or educational software.

Parent look to primary and secondary schools to provide computer access via shared usage models like computer labs, yet these same schools often cannot afford to upfront costs of buying computers or the ongoing costs of maintenance and support, or Internet access and educational software updates. Or so they think.

Making computers affordable to schools

Computer Lab Financing Solution: School Fees

Each school year, parents pay school fees to educational institutions for each child. These fees support the many extra-curricular activities that broaden young minds. While only a few dollars per year, per student, the school fees add up to a significant revenue source for schools. And a great financing option for capital purchases like a computer lab.

School fees are also a continuous revenue source that can support ongoing expenses like Internet access and computer maintenance and support that is often overlooked in the excitement of an initial computer system purchase. Finally, while parents often complain about school fee expenses in general, few do if they see a direct benefit from an increase - especially giving their children access to ICT.

School Fee Financing: Step By Step

Here's how schools can finance computer purchases with school fees, with tips for technology vendors:

1. Sell the idea to schools: Schools are a business like any other - they have customers (parents) who pay for a service (educating students). So a technology vendor should target schools using a marketing and sales approach that recognizes this, showcasing how the addition of a computer lab will increase the perception of quality in the school's service, for which the school can benefit (greater prestige, attendance, funding, etc).

2. Sell the idea to parents: Nothing is going to happen unless parents are excited and buy into the idea. And parents are often driven by the same geek-lust that excites children. Technology vendors can increase sales by showcasing demonstration computers at the school - even lending one out for extended use by key, influential parents.

3. Get the banks involved: School fees come slowly each year, but technology vendors need to be paid quickly, so technology vendors should bring in the local bank that collects school fees (or wants to). Using an accurate computer lab proposal, have the bank develop a financing scheme (often called "factoring receivables") where it essentially loans the school the money for the computer lab based on future school fees.

4. Build in support payments: While its often overlooked, support payments are usually the most profitable service a technology vendor can offer, and are also the most demanded service by clients. So build support payments into the bank financing scheme - either paid in advance at implementation or annually thereafter.

5. Install quality technology solutions: Children can be very demanding on technology equipment, and yet actual support calls are expensive for a technology vendor to service, so cheap or improperly configured equipment can quickly consume an support payment revenues. Be smart in school deployments - use quality technology solutions, implemented with a clear focus on high reliability and low maintenance.

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Women in Business Challenge aims to support women entrepreneurs providing them with the assistance, templates, contacts and financiers to get their business started. Women anywhere in the world who want to start or grow an existing small and medium sized enterprise in a developing country are welcome to apply. You should seek finance in the range of US$ 10,000 and US$ 1 million and either already have a full business plan or need help in developing your business plan.

More info: Women in Business Challenge

The University of Texas and Dell are looking for college students from around the world who want to improve areas of critical human need through innovation. The competition is called the The Dell Social Innovation Competition and aims to help students better the world by improving their skills in project plan development, pitching ideas to investors and building resource networks. Plus, the chance to earn a hefty $50,000 in venture funding if they win.

Whenever we talk about mHealth, there is always much hand-wringing around sustainability. And by that we usually mean we want to find the mHealth model that can be like mobile phones - paid by users and funded by deep-pocketed, aggressive private firms. That way, we can escape the limitations of donor funding and move past the many mHealth pilots that never seem to scale, to truly global healthcare solutions.

I would like to be a heretic and put forth an idea that's be brewing since last week's Technology Salon sustainability discussion where our comments even suggested that all ICT4D efforts are sustainability failures:

Do we expect her to pay? (Data Dyne)

mHealth isn't sustainable

International development efforts in mHealth focus on bringing resources and solutions to communities who are unable to provide their own. This can mean remotely checking on patients in rural areas miles from the nearest clinic, or delivering health PSA's to urban youth in Nairobi nightclubs, to even educating affluent women in India on their menstrual cycle.

But in all these instances and more, the recipient is either unwilling or unable to pay for the service. So why do we keep looking for ways to have them fund mHealth initiatives? Why do we think private payment is the sole sustainable model? Let's look at who has the will to pay for such services and expect them to underwrite mHealth initiatives.

mHealth is fundable

Public health is a high priority for governments. A healthy population is a happy, productive one, and therefore every government has a keen interest in providing healthcare solutions to its populace. Some of these solutions are government funded without question - in the USA we don't expect the Centers for Disease Control or Medicaid to be self-funded in a pay-for-service model. Some solutions are a public-private hybrid - general healthcare services are almost always a mix of public, business, insurance, and private funds. And other solutions can be either - HIV testing and treatment varies by country and even by client.

But in any of these scenarios, do we hear talk about sustainability? Outside arguments about the cost of these programs, no one is advocating that governments stop funding for CDC's or HIV treatments. So why then, when we talk of mHealth, do we try to force a fully private-payer model?

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In the great search for sustainable ICT4D program, here is one that looks particularly promising. Its providing a suite of communication tools to rural residents in Sri Lanka at market-based pricing and returning quality profit to its participants & investors.

A Pilot Takes Off: Examining Sustainability and Scalability in the Context of a Sri Lankan Public-Private Partnership Telecenter Project (PDF)

This paper presents firsthand evidence from EasySeva in Sri Lanka, an innovative, franchise-model telecenter project involving multiple local and international partners. The project is distinctive in that it employs a unique venture capital-type business model, has demonstrated sufficient promise and/or success at the pilot stage to obtain additional funding that has allowed the project to begin scaling, and promotes SME development in the wider Sri Lankan economy.

Interesting site you might want to check out:

Venture Capital and Private Equity in Africa: Connecting investors and entrepreneurs

VC4Africa.com and Appfrica.org are announcing a formal partnership to mobilize and support the venture capital community of Africa. The new partnership aims to leverage their combined vision, resources, and networks in an effort to connect aspiring entrepreneurs in Africa with the skills, knowledge and connections needed to develop, grow and scale their business. More importantly, the partnership aims to promote social entrepreneurship by making it easier for the entrepreneurs to find the investors who may be looking for them.

http://www.vc4africa.com/

Were you excited to hear that Google now has location-aware AdWords for Kenya and South Africa? I was overjoyed that Google is paying closer attention to African consumers and content producers, until Miguel pointed out one small issue:

Getting cash in African hands

[T]here is no mention of how people from Africa are to either pay for AdWords or for content publishers to be paid for AdSense displays. As I've mentioned before, Google has no practical payment set up for anywhere in all of Sub-Saharan Africa.

Google's lack of a payment system effects more than just its own customers - it holds back the entire web development community in Africa. How can organized efforts like Coded in Country or even personal projects hire Africans if we can't pay them?

Before you suggest Paypal, realize that it too does not support payments to anyone in Sub-Sahara Africa. It even actively harasses Americans in Africa who are legitimate, long-term customers, just because of their IP address.

Opportunity in Discrimination

Where others decry the lack of ePayment services, I like to look at an empty glass as opportunity - there is a demand for ePayment systems in Africa and the company that can fill this glass will be richly rewarded. But don't take my word for it. Here is Oluniyi David Ajao describing ePayments as the biggest business opportunity in West Africa:

Note that there are some limited international systems and a few decent nationwide systems in existance. Mac-Jordan has described Ghana’s cashless society and E-zwich, and Rachel's Bargain Corner see the emerging mPayment systems like Zap and M-PESA as a Kenyan eCommerce advantage.

But its a pan-African payment system that will, like David says, really empower intra-African eCommerce and online businesses - maybe even more than the current bandwidth bonanza.

Until then, this business opportunity is leaving cash on the table. Who will be the first to grab it?

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