Conference call: How to support entrepreneurs in emerging markets

SAN FRANCISCO — The Innovation Village is one of more than 500 incubators and accelerators spread across the African continent. But it faces unique challenges because it is based in Kampala, Uganda, a more nascent ecosystem for entrepreneurship than cities such as Nairobi, Kenya, and Lagos, Nigeria. Whereas some incubators and accelerators have no problem drawing investors to hear pitches, The Innovation Village has had to focus its efforts on helping entrepreneurs become investment-ready. “Ecosystem builders are going to be really critical in changing the way the pipeline works so that building a business isn't just left to the people who have privilege and opportunity.” --— Allie Burns, CEO, Village Capital CK Japheth, founder of The Innovation Village, and Allie Burns, CEO of Village Capital, an organization that trains and invests in early stage entrepreneurs working on social impact ventures, joined Devex for a conference call on supporting entrepreneurs in emerging markets. They expanded on some of the themes they discussed at the recent Social Capital Markets conference, which gathered impact investors and social entrepreneurs from around the world in San Francisco. Japheth and Burns shared their insights on ways to support the intermediary organizations that help small- and medium-sized enterprises scale. The Innovation Village was 1 of 15 organizations selected for VilCap Communities Africa, a program led by Village Capital and funded by the U.K. Department for International Development, which provided locally contextualized support for seed funds, incubators, and accelerators. “Any market has its own unique attributes and assets and challenges, and so trying to completely copy and paste one model into a different market is extremely challenging,” Burns said on the call. Japheth said investors tend to enter a market, say they have a certain amount of money, then seek out entrepreneurs. “Because typically investors have little leeway to explore other processes or activities beyond investing, they struggle to find those entrepreneurs to put their resources in,” he explained. Pipelines do not just happen, according to Japheth. Instead, they are the result of processes tailored to the contexts of markets. He explained how The Innovation Village has had to take a step back and build a better ecosystem for its entrepreneurs — for example, by helping them understand that “there’s a big difference between a big idea and a great business idea.” Once entrepreneurs are able to raise early stage capital, they need to move along the capital stack to higher levels of investment, and partnerships can help them make that transition, Burns said. While Village Capital may support an organization with a relatively small early investment of $50,000, it also introduces many of the organizations in its portfolio to later-stage investors. These conversations were part of what led Novastar Ventures, a venture capital manager that supports companies in West and East Africa, to invest in several of the companies in its portfolio, Burns said. She called on listeners to support emerging entrepreneur support organizations. “Ecosystem builders are going to be really critical in changing the way the pipeline works so that building a business isn't just left to the people who have privilege and opportunity,” she said. Have follow-up questions? Send them to webinars@devex.com. And stay tuned for further reporting on this topic. Listen to the full call here: