- Ian Lessem
“Venture capital has been the most esoteric, the most exclusive investment activity in the world.”
Updated: Jan 27, 2021
Just south of San Francisco lie Menlo Park, Palo Alto, Mountain View and Stanford, to name a few of these famous, yet surprisingly small towns. This is where the garages, dorm rooms and poorly lit, drab offices are located that have witnessed the birth of businesses like Apple, Hewlett-Packard, Google and ebay. There are many reasons and many articles written about why these great tech companies come from this very small corner of the world. However, very few of these articles adequately address the virtuous circle of Venture Capital (VC) fundraising and investing that is an essential cog in the process. Successful start-ups in San Francisco leave founders with pools of money that could fund a small country. These newly wealthy founders invest into and support start-ups on their doorstep, and so the process goes on. The immediate riposte may be that there are other VC centres in the world – and yes, there are inBoston, LA, London, Tel Aviv, Paris, Berlin and many capital cities in Africa. However, with a broad selection of start-ups waiting to be invested into, access to these opportunities has largely been a closed system resulting in many outside investors looking in awe at the returns these start-ups generate, as opposed to being in on the action themselves. The heading of this mail is a quote from famous Israeli entrepreneur, VC investor and founder of OurCrowd, John Medved. John has taken his passion and made Israeli VC available to as many local and international investors as possible. Much like this, HAVAÍC was founded on the principal of making investing in African innovation accessible. And this is how we do it. Firstly, on the funding side, we do not discriminate against entrepreneurs and founders who don’t come through a referral or our network. This is another part of the virtuous circle that exists in Silicon Valley and other parts of the world. Africa in particular has had a long history of patronage, referrals and closed ecosystems. As a VC, our role is to expand the opportunities and give access to more – not less. Secondly, positioning ourselves in a transparent and open way, HAVAÍC makes available these investment opportunities to individuals, corporates, family offices and institutional investors on exactly the same terms. No special treatment. To date we have secured over 150 curious, interested and sophisticated investors such as yourselves, as limited partners (investors). And thirdly, staffed with a team of investment professionals, with a combined experience of over 100 years operating and investing in South Africa, Africa and the rest of the world, our investors are armed with the knowledge and skills of seasoned investment managers who use their traditional investment experience and apply this as appropriate in the world of VC and emerging Africa. Whilst we are engaging in a level of self-promotion, we’re happy to acknowledge there are in fact many other ways for investors to access VC type-opportunities. Each have their merits, and each have their drawbacks.
Requires a large personal balance sheet to fully diversify and provide meaningful financing to founders.
Requires time and resources to analyse, evaluate and execute.
Need a network or public profile to attract start-ups.
No legal support or other minds around the table. Investment into niche areas requires expertise.
Freedom to choose investments.
TRADITIONAL FUND STRUCTURES
Large minimum investment requirements often preclude individuals.
No freedom of choice (fund manager decides).
Rely on manager to do appropriate due diligence.
Managers may be forced into certain sectors or areas of focus based on LP’s pressure.
Artificial timelines to exit opportunities and close funds.
Low minimum ticket sizes.
Freedom to choose investments.
Less time required to analyse and evaluate investments, and often limited information.
Invest into any sector.
Opportunities to invest are vast, and crowdfunding platform’s goals may not aligned with yours.
The above three categories are very important in supporting the VC ecosystem for different stages and types of investments. Those who have taken part in our journey from the start and had some great results to date, will notice that HAVAÍC does not fit neatly into any one of the above boxes. With our unique low barrier to entry approach where our deal-by-deal investors choose which investments to participate in, we have successfully taken the best of the above traditional approaches and created our own unique and accessible offering. Unlike angel investing, we do have significant resources within our team which includes CA’s, CFA’s, lawyers, bankers, analysts and subject matter experts; and you don’t need deep pockets to make investments. Unlike traditional fund structures, HAVAÍC doesn’t make allocation decisions based on artificial timelines or pressures to invest or exit. Along with the founders, we look for the best time to exit to maximise returns. Finally, unlike crowdfunding, we carefully select the opportunities that are presented and bear the consequences of our decisions. Our strong belief is that we should only make returns when you make outsized returns. The HAVAÍC model offers you professional management, deal analysis, due diligence and support and a sector agnostic spread of investments, with the same terms as institutional investors and managers that you know have vetted and participated in each and every deal. Like John Medved and OurCrowd, HAVAÍC identified that investors are interested in participating in high growth opportunities, however have been left to watch the world of VC from the fringes as a result of the elite nature of this high growth investor world. As we grow and have more success, we will continue to make these opportunities available to individuals, corporates, family offices and institutional investors on exactly the same terms and backed by a professional, experienced management team. With this in mind, there is no reason to sit on the side lines looking into the world of VC. Join the HAVAÍC network, the smart way to invest in high return African start-ups.