Behind the Criteria #4: Attractiveness to Investors & The Yale Africa Startup Review

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“Cash is king, but it has got to be more than just a rat race to raise the most funds…you know…” We heard this phrase repeatedly in our conversations with Africa-based startup founders and executives as we discussed coverage of the local startup ecosystem. At the Yale Africa Startup Review, this reinforced what we’ve also seen in the data on the financing landscape. There’s nothing wrong with raising tons of money, in fact we should do celebrate it ; at YASR we hope that by featuring the breadth of innovation in the African system, we can help change the narrative and attract more funding. However, we must also be mindful of the reality on the ground: its a tough playing field for local founders without the “ivy-type badges” and “serial entrepreneur street cred.”

At YASR, we don’t just focus on amount of financing raised; we look at the ratio of revenue generated relative to total financing raised as a proxy for value created. This lens provides a more holistic way to compare startups that chose to (or have to) grow organically with their revenue to those that can raise millions of dollars in venture financing. At YASR, we believe we can celebrate both. We think this approach to telling the story is more representative of the financing environment and dynamism of the African startup ecosystem. We are excited to see more VC money flowing into the continent, but we agree, it’s got to be more than more than just a race to raise funds. We reflect that in our review process for #yasr30.

The Yale Africa Startup Review (YASR) is an annual student & alumni-led publication at the Yale School of Management, featuring startups shaping the future of innovation and entrepreneurship in Africa.

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