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.

Subscribe to ICTworks

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

.
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.