Africa is a continent full of entrepreneurs, many with some great ideas that hold business potential. For example, Africa’s ICT space has seen a number of university students and startups develop innovative products and services. However, with the challenge of finding funding and entrepreneurs often lacking the business skills to turn their idea into reality, accelerator programmes can offer a lot to a startup.
Gerard Yitamkey, CEO and co-founder of Ahonya, a Ghanaian e-commerce platform, told How we made it in Africa that his company benefitted greatly from its time at the accelerator programme of the Kenya-based Savannah Fund. Ahonya was one of the three startups to be selected last year by the seed capital Savannah Fund for its accelerator programme. The fund specialises in investments (between US$25,000 and $500,000) in early stage, high growth web and mobile technology startups in sub-Saharan Africa.
Ahonya, which is only a year old, has recently graduated from the accelerator programme at Savannah Fund and received US$25,000 worth of investment for 15% common equity in the company.
Here are three benefits Yitamkey said accelerator programmes can offer startups in Africa.
1. Network of mentors
“I think the most important thing the accelerator offers is the people,” said Yitamkey. “You know, the people they can find to come and talk to you; the people in their network who can share with the entrepreneurs.”
“And I don’t think that there was a way for us to have met him without going through the accelerator,” added Yitamkey. “He came [to Kenya], we sat at the same table with him, and we sort of presented our challenges and he actually said he faced the same kind of challenges when he was also starting out, and told us ways in which he was able to mitigate some of them.”
2. Access to investors
Yitamkey explained that the Savannah Fund did not only allow Ahonya access to their network of investors, but association with the fund also helps startups gain some credibility among investors when looking for further financing.
“Right now we are looking for funding and Savannah Fund is very helpful with that because what happens is before someone will commit a large amount of money into your company, they want to see that this company will be successful. They want to see if other investors find you interesting and Savannah Fund is like our core investor. It’s like the seal of credibility that you have.”
“So it’s like if you have a certificate from an Ivy League university that you can show off to employees in terms of looking for a job,” continued Yitamkey. “So it’s more like if you find yourself in an accelerator and you graduate, you are able to leverage on the accelerator’s network of investors which you can talk to and also raise funds.”
3. Business support
“Last year we received a lot of support, especially in the area of digital marketing,” Yitamkey noted. “They were able to bring a digital marketing person from Silicon Valley who was really experienced and she was able to take us through email marketing, social media and all these other digital marketing stuff. And it was really interesting and it was all for free. And if we were on our own and we needed someone like that, we would have paid a lot of money to get that kind of service.”
Yitamkey said that the fund also provided assistance with all the business and legal paperwork needed to run Ahonya in Ghana. He added that he had not studied business or accounting at university, and so this type of support was a huge benefit to the startup.
“And they brought a lawyer who could help with copyright issues, trademark, and every other legal thing. And if you are on your own as a startup, it’s really hard.”