Spreading the wings of angel investing in the Gambia (en)
Young entrepreneurs in the Gambia will now have support from angel investors after the recent launch of the Gambia Angel Investors Network (GAIN) in Bakau.
Start-ups face many obstacles when launching their businesses, one of the most serious being access to capital.
At a very early stage of any business, it is difficult to predict if it will grow. One of the main reasons being traditional investors who are often risk averse and prefer to deal with companies that are at a later and safer stage of their business growth. This puts young companies in a difficult situation often called the ‘financial valley of death’ – when the lack of seed capital hinders growth and ultimately kills the company.
The situation is quite similar in The Gambia where young and particularly new entrepreneurs find it harder to access capital.
Despite all challenges, solutions do exist. There are angels out there who can save companies from imminent financial death. An angel investor is usually a “wealthy” individual who provides mentoring and financial backing to a start-up to help its launch when other potential funders shy away. Angel investing has allowed many start-ups to bootstrap and get their companies to a point where they can access larger funding pools provided by traditional investors in the market.
It is also a profitable business. A relatively lower investment could generate high returns. Imagine an investor who put just USD 1,000 in Facebook at its seed stage, would have made USD 2,000,000 when the company was listed in 2012 . And this is not an isolated case – other successful start-ups in Sub-Saharan Africa, such as Jumo, Kobo360 and Jumia also generated great financial returns to their angel investors.
Some of these businesses have created much-needed jobs, expanded to international markets, provided greater benefit to their economies, and changed how the world thinks and does things.
The International Trade Centre (ITC), in partnership with the African Business Angel Network (ABAN) and the Gambian Investment Promotion Agency (GIEPA), worked for the past year to set-up the Gambia’s first angel investors’ network. The initiative brings together high-net individuals with a common goal of investing in high-potential local businesses.
It was launched last month with a pitch session and a masterclass on angel investing delivered by its new managing director Adrame Ndione and Tomi Davies, president of the ABAN.
GAIN is the latest West African angel investor network launched and has followed those in Mali, Benin and Senegal. GAIN is bringing together between 10 and 15 local and diaspora based investors who have committed to providing funding to between 8 and 12 early and growth stage start-ups in the Gambia each year.
The network aims to provide ticket sizes of between US 20,000 to US 300,000, and helps develop the nascent Gambian start-up and investment ecosystem by empowering hubs, incubators and accelerators and providing an entry point for international investors and diaspora interested in investing the country.
The initiative is part of ITC’s Youth Empowerment Project three-tier approach, along with mini-grant and mini-loan schemes, which aims to reduce the obstacles of young entrepreneurs in obtaining access to finance to launch and grow their business, and create more decent jobs at home.
The door to opportunities at home is now open for young Gambians.