Silence of the Lambs

The Role of African VCs in Building Champions

One of the happiest days of my life was when I realized that Venture Capitalists (VCs) also have to raise funds. The idea that Limited Partners (LPs) grill VCs—perhaps even more intensely than VCs grill startups—keeps me warm at night. I fantasize about certain VCs (not all, before my face becomes target practice on a dartboard) squirming as they explain their returns after excluding the Paystack exit that spread the love like confetti at a wedding.

The second happiest day of my life was reading the recent Semafor article, where African VCs seemed to channel their inner skinhead (stay with me here). Ok, they didn’t actually tell Western VCs to "go back home," but if you squint between the lines, you’d think they were saying, “Western VCs, we’re happy you’re here, but stop shitting where we eat.”

The article also raised an important question for me: why weren’t these African VCs screaming from the pulpit during the frothy years? Surely, it was in their best interest to call out the chaos. Here are a few hypotheses to explain their silence but I think its time for our local VCs to take strong positions, drive their stakes in the sands and tell us consistently what they believe in. They need to take more active involvment in shaping the ecosytem to deliver investible companies.

Setting the scene

During the years of plenty, valuations were rising like helium balloons, engineers were job-hopping faster than one changes underwear, and angel investors were salivating over the prospect of a 5x return on their nephew’s barely-baked app idea.

So why weren’t local VCs thrilled by the influx of foreign attention? Kola Aina summed it up perfectly:

“They disrupted, mispriced, and overheated the market somewhat.”

That “somewhat” is doing heavy lifting. It’s like when an Englishman says, “He’s a bit of an idiot.” You know that person isn’t just a small buffoon.

Meanwhile, Tidjane Deme forgot to take his subtlety tablets when sharing his views of the flight of U.S. investors saying, “We don’t miss them.” He might as well have said, “I don’t miss the period when I had boils on my arm.”

But let’s be real. Local VCs wouldn’t have gotten far with founders if their pitch went something like:

“Don’t take money from these guys, even though they’re masters of the universe and can get you into YC. Take my lower valuation instead. Trust me, I’m local, and I know what’s best for you. Oh, and don’t forget—they’ll never love you as much as I do.”

Yeah, that wasn’t going to happen. What I had hoped, though, was that they’d be screaming Pacino-style at VC/LP conferences:

"I've been around, you know? There was a time I could see. But I have seen some bad things in the last 2 years. Startups, younger than these, with confused founders, their cap tables messed up ."

Why the Silence?

The worst thing about the silence is that if you look at these African VCs, they are led by some solid people. On the ground, operational experience and been to the same schools of the masters of the universe. Here’s why I think African VCs didn’t push back during the gold rush:

1. The Mirage of Big Money

When a Western VC offers a $20 million term sheet for a startup you think is worth $3 million, it’s easy to feel like you’ve missed something. Maybe they’re spotting a trend from Latin America or India that hasn’t landed here yet. I used to give them the benefit of the doubt until I began to see all their faves, falling one by one.

2. Don’t Poop Where You Pitch

Criticizing Western VCs can backfire. If Amina, a local VC, says, “They’re overpaying for deals,” she risks looking like she has eaten sour grapes. It’s like me saying my competitors’ loan books are only growing because they’re making lousy loans. Sometimes I believe it, but I don’t say it out loud. I grin, grind my teeth, and fantasize about the long game.

3. Don’t Alienate the Money

If local VCs criticize their Western counterparts, LPs might think, “Western VC made me 10x in Brazil and 20x in India. If you don’t see their value, maybe you’re the problem.” No one wants to bite the hand that funds them—or imply the LPs backing the big guys are fools.

My advice

The part of the article suggesting that African VCs need to take more risks made me wince. We have seen what risky investing is: funding investing in any engineer with a shiny pitch deck labeled Stripe for X, backed by friends-and-family funding, with a 6% chance of getting into YC. That’s not risk—it’s gambling. And we’ve all had our fill. What I do think is that they need to play a more active role in shaping the future.

Here are my three suggestions for African VCs to

1. Take less risk. Many startups are built on solutions looking for problems. I advocate for investing where the problems already exist: healthcare, education, logistics, maybe climate (don’t slap me). These are massive opportunities, all underfunded and ripe for disruption. Stop investing in remittance companies (and yes, maybe digital banks too 😭) and focus your dollars.

2. Prioritize Longevity. Satoshi’s comment about building “national champions” is spot on. Longevity is the real marker of success. Back founders who’ve weathered storms and come out stronger. Look for companies that have survived at least one economic cycle—those with staying power. And no, this isn’t just a veiled shoutout to my darling Carbon. If you think I’m pitching Carbon—just because we’ve been through four economic cycles, boast one of the longest-running fintech teams in the region, and operate an amazing platform—you clearly don’t know me. My newsletter is a space for unbiased intellectual wanderings and I will not sacrifice my integrity for the chance of getting an investor at a valuation of…..Sorry, getting a bit too excited.

3. Push for M&A. VCs need to step in as honest referees and push for mergers when it makes sense. Too many players are fighting over the same pie, convinced their “brand is better.” It’s time for African VCs to educate founders on collaboration and scale—or we’ll be stuck in small-scale operations forever.

A call to action

Lastly we want to hear what the local VCs think. Do they not have opinions, or are they ashamed of them 😀🤔? Big shout out to the likes of Stephen Deng and DFSLab, who periodically share thoughtful pieces that help founders strategize. If you have cash, what better way to increase your chances of fund success than by shaping the discourse?

It’s time for African VCs to stand tall, like the Iroko tree (yes, I’m channeling Wakanda energy here), and take strong positions. Some already do—but if they don’t share their thoughts, it’s like a tree falling in the forest: if nobody heard it, did it really happen?

Mic drop.