Jayanth Varma wrote recently re: India:
Last month, the McKinsey Global Institute (MGI) published a 95 page report (The emerging equity gap: Growth and stability in the new investor landscape) arguing that over the next decade, there is likely to be a shortage of equity investors globally. This is based on two arguments:
- Demographics and the regulatory aftermath of the financial crisis are reducing the demand for equities from investors in developed markets.
- Global wealth is shifting to emerging market investors who have historically had less appetite for equity investment.
The second prong of this argument is clearly debatable. Had there been a think tank examining such questions in the nineteenth century, it too would have worried about the shifting of wealth from the UK (which was then the dominant source of risk capital for the world) to newer rivals. We do know with hindsight that with increasing wealth, the rising powers of the nineteenth century went on to become major sources of risk capital to the rest of the world. That could well happen again, but it will not happen unless today’s emerging markets create the preconditions for a vibrant equity market.
VC4Africa.biz is one year old in its present form, though the idea has been around with co-founders Ben White and Bill Zimmerman for a lot longer. After experimenting with the ning platform, they decided to build their own platform where they can tailor the functionality of the site to match the needs of both African entrepreneurs and investors. As bandwidth opens up on the continent, especially later in 2012, I’m helping the team with some experimental video projects. We’re actually working from the premise that video isn’t needed at all, unless it can add something to the story. Ben White recently gave a presentation which explained very clearly the thinking behind VC4Africa, why it’s needed, how it’s working with collaborative teams across the continent, and what’s been achieved in such a short time so far. I confess to being very impressed by their ability to work WITH entrepreneurs rather than FOR them. This is turning sharing of expertise into a sustainable business model. Enjoy.
This infographic may also be helpful: