On August 25, 2016, we held our sixth Hera Fund Wingpact
Conversation. Our guest this month was Christine
Emilie Lim, in a discussion about “Investing in Emerging Economies.”
Silvia
Mah, along with Christine, led this information-packed session. Christine Lim is a Founding
Partner of Wingpact, and wrote a section
in Impact
With Wings about this topic. Silvia
Mah is the founder and CEO of Hera Labs
and Hera Angels, and has a personal
interest in supporting women entrepreneurs globally. Silvia is from Venezuela,
Christine is from the Philippines, and other Wingpact partners are from Hong
Kong, India, and Argentina, so this is a very globally focused group of women.
Christine started by talking about how angel investing is nascent
in emerging economies. One opportunity that is taking off is diaspora
investing, where people living around the globe invest in companies in
their home country.
Diaspora investing is a great way to invest with positive
social impact. Many of the entrepreneurs on the ground in developing countries
are solving community issues in areas like education, food, sustainability, and
health care. Silvia pointed out that it is great to support people on the
ground who are creating their own solutions, rather than implement solutions
from afar, which does not always work. On the other hand, Christine brought up
some examples of US-originated solutions which have been adapted by
entrepreneurs in other countries, such as on-demand car apps adapted to
on-demand motor bikes. Another dynamic is that many foreign-educated ex-patriots
are returning to their home countries to address their community’s challenges
through entrepreneurship.
These social-impact solutions can have a high rate of return
in addition to strengthening communities. For example, the peer-to-peer
payments market in Africa can really scale widely. On-demand doctors and
medical services is another big need that market-based solutions are
addressing.
The government role in entrepreneurship varies widely in the
set of countries that Christine and Silvia know about. Aside from growing
government resources, global partners are also stepping in to fund and support
activities for these emerging innovation ecosystems.
Many countries have angel groups, and there is a great need
for education about startup practices and how equity investing works. There are
more and more opportunities for us to mentor across borders, through
conferences and other programs. Geeks on a Plane from 500 Startups brings
global investors to international startup scenes to explore cross-border
opportunities.
Angel investors need to work to find deal flow in the areas
they are passionate about. Toniic is a
great resource for finding good social impact deal flow in emerging
markets. If you are investing from a
distance, it’s considered best practice to find local partners to help you
conduct due diligence. Many entrepreneurs and local partners come from a
traditional business background and are not used to thinking about high
growth. Investors from more developed
ecosystems can help encourage entrepreneurs and local partners to think bigger.
We have a special interest in the many women around the
globe starting businesses to support their families and meet needs in their
communities - we want to encourage these women to think about larger scale. We
can also help by bringing these emerging businesses exposure to international
markets. When entrepreneurs start to understand their international scaling
opportunity, this makes them more attractive to savvy global investors.
Silvia and Christine discussed how there is a need for more
resources to connect angel investors with entrepreneurs globally. There are
social impact funds and some training and mentoring opportunities for business
owners in developing economies. Pitch competitions in the US are starting to
feature international businesses. We are seeing more and more investor trips,
for example Ingressive’s
Tour of Tech through which Wingpact’s Suzanne Andrews learned about the
exploding entrepreneurship scene in Nigeria. However, these resources are just
the tip of the iceberg in what could be done to connect investors and
entrepreneurs globally.
Some resources:
Watch for upcoming new fund announcements from Rising Tide, which is looking at providing
a variety of learn-by-doing opportunities for global investing.
Barefoot
In Business is raising global awareness and funding for Ugandan women
entrepreneurs. Watch for Wingpact participation in the November 18 release in
New York during Global Entrepreneurship Week.
The #WEMENA thread on Twitter is a resource for women
entrepreneurs in the MENA region and Silvia follows this as an interested
global investor.
A final question Christine emphasized is how to insure that
the investor mix in emerging innovation ecosystems is diverse in terms of
gender from the very beginning. Nascent
angel communities tend to be predominantly male. We want to avoid the problem
we have in Silicon Valley, where the ecosystem is quite mature, and now we need
to retrofit our structures to include women. How to build a gender-equal system
from the ground up is a big open question at this time.
Silvia closed by reminding us that as women, we invest in
what we are passionate about, and we want to lift up the women doing great work
all around the world.
You can view the entire 1-hour conversation on Hera Lab’s YouTube
channel.
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Wingpact has written
the first book about angel investing for women, Impact
With Wings: Stories to Inspire and Mobilize Women Investors and Entrepreneurs. Follow Wingpact on our website or on Twitter at @Wingpact.
Hera Fund is the
creator of the Hera Venture Summit,
which this year on September 17 was an inspiring gathering of women angel
investors from all over the country and around the world.
This post simultaneously published on Suzanne Andrews' blog, Bring Your Own Table.
