Research Proves Founder Teams Are Key to Startup Success In Africa

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AMSTERDAM/Netherlands:  Research carried out by Venture Finance in Africa Research has shown that a strong team of founders is the driver of startup success in Africa.

In the 2017 research, where data was collected from 1866 venture from 41 African Countries and 111 African-focused investors from 39 countries around the world, the final report showed that with a stronger founder base, business ventures in Africa will be highly successful.

In this year’s study VC4A aims to better understand the critical success factors for African startups and identify the key ingredients that determine why one venture outperforms its peers. These learnings are useful for both the entrepreneurs and for the support systems they depend on to make well-informed decisions.
“We are truly entering a new stage of startup growth on the continent. Not only has the number of startups continued to grow at an impressive rate, they are increasingly successful at scaling into sustainable enterprises well-positioned for growth. With the right team in place, we are seeing a growing number of companies break rank. I’m sure we will witness many new success stories hitting the headlines as a result” – Ben White, CEO VC4A

A key outcome from this year’s research on African startups was the identification of their unique traits relative to the startups’ level of commercial performance. And although many factors go into building a company, analysis of the data makes clear that a strong team of founders is the key driver of venture success in Africa. Many investors consider this as the main thing they look for, but now the data also shows that the right team of founders makes the difference, and is the single most unique characteristic across the companies making commercial progress.

Among the countries with 20 or more ventures participating in the survey, Uganda and Kenya have the highest female participation. For Uganda, 57% of the ventures include a female founder where for Kenya the number is only slightly lower at 55%. South Africa has the lowest female participation rate at 33%. Nevertheless, these percentages of female founders far outpace averages recorded in more established startup hubs like New York or San Francisco. More details and other factors that differentiate a successful team of founders are included in the 2017 report.
The ‘VC4A Venture Finance in Africa’ report captures the performance of early stage, high growth ventures from Africa and the activity of early stage investors. The insights are broken down across several indicators: job creation, performance, investments, investor interest, ecosystem players and drivers of success.
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