As an investor, it’s important to keep an eye on the future of entrepreneurship. And when it comes to youth entrepreneurship, the future is looking bright. Young entrepreneurs are bringing fresh ideas and innovative approaches to the table, and investing in their ventures can yield great rewards.

How can investors make sure they’re investing in very young entrepreneurs wisely?

Anzisha’s Head Coach, Nkrumah Mauncho says that the decision to invest in a very young entrepreneur (VYE) could be informed by certain characteristics.

“Investors should carefully evaluate team dynamics, particularly how team members collaborate, approach challenges, and demonstrate resilience. A well-coordinated young team can offer significant advantages due to their enthusiasm and adaptability in problem-solving.

It is essential for potential investors to ensure that young entrepreneurs receive sufficient mentorship. Guidance from experienced mentors or a knowledgeable advisory board can assist these entrepreneurs in identifying effective business models, targeting appropriate customers, and managing their operations successfully.

Market validation is another vital consideration for investors. They should confirm that the business concept is grounded in genuine market demand with opportunities for growth, as this minimizes the risk of failure and indicates that the entrepreneurs have conducted thorough market research. Additionally, investors must scrutinize the projected financial indicators of the emerging firm, recognizing that while financial forecasting can be challenging for new businesses, it is crucial to evaluate the feasibility and reliability of these projections,” concludes Mauncho.

What opportunities are there in Africa that help connect investors and young entrepreneurs?

Russel Julius, an experienced entrepreneur and former Venture Partner in the Private Equity sector, emphasizes the lack of significant programs on the continent that facilitate connections between investors and entrepreneurs.

He points out that the existing landscape does not adequately support the networking needs of these two critical groups and advocates for the development of initiatives that would bridge the gap between investors and entrepreneurs in the African market.

“African Development Bank Group has launched what they call Youth Entrepreneurs Investment Banks (YEIBs) in three markets with more to come. In the meantime, networks such as ABAN Angels do a lot for levelling the playing field – young entrepreneurs can access early funds from Angel investors. We’re hopeful that in the future, the Young Entrepreneurs Fund (YEF) will help fill this gap in the ecosystem,” says Julius.

Other options include:

• Accelerators and Incubators: Organizations like Seedstars, MEST, and Ventures Platform offer programs to support young entrepreneurs and connect them with investors.
• Crowdfunding Platforms: Platforms like Ariba, Uprise Africa, and Mvest allow individuals to invest in African startups.
• Venture Capital Firms: Firms focused on Africa, such as TLcom Capital, Kepple Africa Ventures, and 4DX Ventures, are actively investing in early-stage startups.

Deal rooms are also becoming increasingly popular in the startup world. These virtual data rooms allow investors to securely access and review startup data.

Here are some benefits for investors looking to participate in deal rooms for youth entrepreneurship:

• In-depth information: Deal rooms provide investors with access to detailed information about a startup, including financials, team bios, and product descriptions. This helps investors make informed decisions about whether or not to invest.
• Time-saving: Instead of spending hours on due diligence, investors can quickly and easily review all the relevant information in a deal room. This saves time and allows for more efficient investment decisions.
• Increased competition: By participating in dealrooms, investors can compete with others to invest in the most promising startups. This can lead to higher returns on investment and greater success overall.

When it comes to youth entrepreneurship, Africa is a particularly exciting region to watch. According to the World Bank, entrepreneurship in sub-Saharan Africa is on the rise, with an estimated 400 million entrepreneurs expected by 2030. This presents a huge opportunity for investors looking to get in on the ground floor of the next big thing.

One report by VC4A and Omidyar Network found that African startups have raised over $1 billion in funding since 2010. This shows that there’s already a lot of interest in African startups, and utilizing dealrooms can help investors stay ahead of the curve.

But don’t just take our word for it. According to a report by PwC, “Deal rooms provide a more efficient and effective way of managing the due diligence process, which can lead to significant time savings.” And a report by McKinsey & Company found that “Deal rooms can increase the likelihood of successful deals by enabling investors to make more informed decisions.”

Investing in youth entrepreneurship can be a win-win situation for both investors and startups. By supporting young entrepreneurs, investors can help drive innovation and economic growth. And by utilizing deal rooms, investors can make smart, informed decisions that lead to greater success.