Generally speaking, given that the VC atmosphere in Africa is vastly different from the US, businesses that fail to account for the difference in operational, infrastructural and environmental contexts, as well as the uniqueness, of each African country, are less likely to experience significant success. The fact that a health-tech start-up experiences immense success in Kenya does not guarantee that the success will be replicated in Nigeria, for instance.
As a part of our series about “Social Impact Investors”, I had the pleasure of interviewing Almaz Negash.
Almaz Negash is an Eritrean born social entrepreneur who believes in the ability of individuals to gain economic self-sufficiency through social enterprise development and employment. She has spent the last two decades seeking to improve the quality of life in her local communities through local and global partnerships. Almaz founded the African Diaspora Network (ADN) in 2010 to inform and engage Africans in the Diaspora, facilitate direct collaboration with social entrepreneurs, innovators and business leaders to invest in, and improve the lives of everyone on the continent.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
As an African who has lived in America, with Americans, for years, I believe that love transcends color, ethnicity, creed, religion, income and other societal barriers. It is that belief that enabled me to dare to bring Africans and friends of Africa together. The generosity and kindness of our global community feeds me with hope and optimism.
That optimism and faith is also what led me to start the African Diaspora Network (ADN). In 2010, I noticed that the social entrepreneurship conversation was consistently about Africa, yet the voices, ideas, and financial backing of Africans were absent; both on the continent and in the Diaspora. As a member of the African Diaspora, I felt strongly that there was a need for an organization that would both honor the individual achievements of Africans in the Diaspora and on the continent, and provide a platform for these visionaries to put their minds together, collaborate, and spearhead the transformation that the African continent truly needs. I reached out to my wonderful friends and colleagues to see if my idea to create the African Diaspora Network made sense. The feedback was a resounding YES, and the rest is history.
What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing in particular? Can you share the story with us?
Social entrepreneurship has been a common denominator in my career journey. Having spent so many years working in Silicon Valley, I started to realize the importance of having similar opportunities for African startups and innovators. I believe that as Africans, we need to be at the forefront of creating Africa-focused solutions and the only way to do that is by creating a platform that enables us to successfully innovate and create for the betterment of the continent.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
The journey to where I am today has never been a straight line. My career has ebbed and flowed across sectors; from investment to trade to higher education, and most recently, the nonprofit and social innovation sectors. Each of these experiences has offered learnings in ways that I never anticipated, but all with a common thread: Social Entrepreneurship. For the past 27 years, I have been a leader, businesswoman, and social entrepreneur, with each career paving the way for the next.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
When I came to the United States as a foreign student, I was alone, I had no family here. All I had was my determination and hope. While these are good traits to have, they are not enough. I needed mentors that I could trust. As luck would have it, I was welcomed by one of the most beautiful American couples; Dr. James Emerson and Dr. Margaret Emerson of San Francisco. They became my family, my mentors, and my confidants. I have been given so much and I do the best I can to give back by mentoring and supporting young women so they too can achieve their dreams.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
The challenge of being a woman of color with an accent is that you are held to a different standard. You are expected to perform about three times better than others just to prove you can do the same job. This was quite challenging for me during the first phase of my professional journey. Nevertheless, I never lost faith in myself. Every time I failed or got stuck in a job, I would get back up and keep moving forward. I did this so many times while dealing with discrimination in majority white-led institutions. My advice to others who want to follow their passion is to never lose sight of faith in yourself, your vision, and those who believe in you. I know for a fact that it eventually works out for the best. Keep trying, keep moving forward and keep hope alive.
Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
There has been an uproar recently about diversity within the VC space and Tech. For example, when Alexis Ohanian stepped away from the board of Reddit to make space for a person of color, it made headlines. This is indicative of how much work we still have to do to create an inclusive atmosphere in Silicon Valley. For us to experience meaningful change, the following factors need to change;
- Leadership — As Alexis has signaled it starts with leadership. Having leaders that mirror society’s diversity will be a good first step. From there, ensuring that those leaders actually have adequate decision making power to advance equitable hiring within their organizations. Also, making their investment processes more accessible to minorities will be a significant step in making VC more equitable.
- Education and Social Capital — Organizations like Included VC are doing a great job at offering free VC education to upcoming investors from marginalized communities, and that is also another solution to ensuring that those from diverse backgrounds have the social capital to make it in the space. It is also quite puzzling how we continue to see fewer women in the venture capital sector in the ecosystem. There has been some improvement, but still not noticeable enough to make a dent. Therefore, diversity and inclusion in the sector will only happen when there is an intentional involvement of women, and active advocacy and support systems. Here is what I mean by that:
- Advocacy through Awareness and Engagement — There needs to be campaigns aimed at providing continuous awareness (regionally, nationally, globally), that includes women in VC leadership and partnership.
- Board Appointment — large VC companies need to be deliberate about appointing female board members. In fact, it needs to be a requirement that women make up between 30–50% of their board. Currently, women make up less than 13%.
- Mentoring — women led VC companies need to mentor women entrepreneurs and startups.
You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?
I am not a VC, but I happen to be very immersed in the system given the work I do. In 2012, during my tenure as Sr. Managing Director of Step Up Silicon Valley, I worked on a Social Impact Financing project (a.k.a. Pay for Success) that raised $6 million in funding to reduce chronic homelessness and $24 million to reduce chronic mental health in Silicon Valley. The private investors provide the initial investment and then receive a return on their investment based on the savings in public funds created by the success of nonprofits in addressing the social need more effectively and efficiently. The idea, which originated earlier in England, was first introduced by Step Up Silicon Valley to the County of Santa Clara as a way to test and finance market-based solutions to poverty.
In general, which business sectors excite you most and which sectors do you look to invest in?
In keeping with the core purpose of the African Diaspora Network, businesses that focus on solving real life problems currently plaguing the African continent are most exciting. Any company that can proffer realistic, contextual solutions to problems in healthcare, education, technology, and financial inclusion; will garner a lot of interest from our network of investors.
Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?
Due to the nature of ADN, we’ve been fortunate to connect investors with some amazing startups, many of which have gone on to do amazing things across the continent.
The biggest lesson for me is that equal access to funding opportunities for women and minority-owned business is extremely important. I would hate to think of the many innovations that Africa- and the world, has missed out on due to the lack of access to funding opportunities.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
Generally speaking, given that the VC atmosphere in Africa is vastly different from the US, businesses that fail to account for the difference in operational, infrastructural and environmental contexts, as well as the uniqueness, of each African country, are less likely to experience significant success. The fact that a health-tech start-up experiences immense success in Kenya does not guarantee that the success will be replicated in Nigeria, for instance.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
There are many factors that determine whether or not a business venture becomes successful and this is something a lot of investors understand going in. Sometimes, investors find that they pass on investing in certain startups, probably due to a gut feeling about the founder or a missing element within their business plan. Then the venture ends up getting valued at 5x more than their initial valuation and the investor begins to second-guess themselves. My advice would be to learn to strike a balance between your gut feeling about the founder and the strength of the business model. Of course, this is something that improves with time and experience.
Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why? Please share a story or example for each.
Based on the work I have seen in my career and as part of the African Diaspora Network Investor community ecosystem, the most notable criteria from investors include:
- Background within the industry
- Market size / large opportunity for impact (in the case of social enterprise)
- Effective business model
- Differentiation from available market offerings
- Relatability to investors (Which is why a majority of investors — being white male investors — invest in white male entrepreneurs. This is a big opportunity for VCs of color to level the playing field by investing in entrepreneurs from marginalized backgrounds)
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
For over 27 years, I have worked whole-heartedly and diligently to make a positive impact in my community through leadership in business, academia, and nonprofit sectors. These cross-sector experiences have shaped my professional lens and ability to be particularly adept at building and strengthening communities through fostering partnerships and collaborations. More importantly, I believe in bringing people together to share ideas, knowledge, and resources to better the lives of humanity. It is that ethos/belief that enabled me to found the African Diaspora Network-to facilitate direct collaboration with social entrepreneurs, innovators, and business leaders, and to invest and improve the lives of everyone on the African continent and the communities we live in.
If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?
I will continue to encourage our aspiring African entrepreneurs to use their ingenuity to come up with innovative ways to strengthen the educational infrastructure of the continent. To those with means, I will encourage them to use their financial, intellectual, and social capital to better the lives of the many.
We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this. 🙂
I would love to have breakfast with Mrs. Michelle Obama, the former First Lady, to get her insight on the future of women’s leadership, the Black Lives Matter movement, and motherhood. In these challenging times we live in, it will be a blessing to speak to someone who is cool, collected, and brilliant.
How can our readers further follow your work online?
You can learn more about ADN, and support the work we do through our website www.africandiasporanetwork.org or connect with us on social media LinkedIn, Twitter, YouTube and Instagram. Feel free to also connect with me personally on LinkedIn or on Twitter.
Thank you so much for this. This was very inspirational, and we wish you only continued success!
About the Interviewer: Jilea Hemmings is a staunch believer in the power of entrepreneurship. A successful career revamping Fortune 500 companies was not enough for her entrepreneurial spirit, so Jilea began focusing her passion in startups. She has successfully built 6 startups to date. Her passion for entrepreneurship continues to flourish with the development of Stretchy Hair Care, focusing on relieving the pain associated with detangling and styling natural black hair. For far too long, people with tender heads have suffered in pain. Until now.