News / Local
Zimbabwe seeks high-net-worth partners for startups fund
05 Aug 2024 at 07:17hrs | Views
Deputy Finance, Economic Development, and Investment Promotion Minister David Mnangagwa has announced that the Treasury is seeking strategic alliances with high-net-worth individuals to operationalize the National Venture Capital Fund (NVCF), established in 2021 to support startups and small and medium enterprises (SMEs). Despite its establishment, the NVCF has remained dormant due to a lack of government resources.
Venture capital funds typically provide capital to early-stage, high-potential startups in exchange for equity. Addressing entrepreneurs' concerns at the 7th SADC Industrialisation Week in Harare, Mnangagwa highlighted the need for startups to expand their ideas and businesses. He attributed the NVCF's inactivity to the absence of a CEO with private sector experience but noted that this issue is being addressed.
The Reserve Bank of Zimbabwe's 2022 MSME survey estimated the informal sector's annual turnover at US$14.2 billion, with US$8.6 billion in GDP and US$2.5 billion in unbanked cash. Given the government's current inability to fully fund venture capital, Mnangagwa emphasized the importance of forming alliances with venture capitalists and asset managers.
The National Venture Capital Company is exempt from the Public Procurement and Disposal of Public Asset Act, enabling it to operate competitively and partner with entrepreneurship drivers. The government is also committed to supporting MSMEs' participation in capital markets and creating a financial architecture that serves the government, people, and business community.
Mnangagwa acknowledged an information gap regarding opportunities for small businesses and individuals in capital markets, including exchange-traded funds, C-Trade, and real estate investment trusts. He urged the Securities Exchange Commission of Zimbabwe and the Zimbabwe Stock Exchange to educate citizens about these opportunities, highlighting the C-Trade platform that allows young people to participate in the stock exchange via their phones.
McLean Sibanda, managing director of Bigen Global, stressed the need for policies promoting innovation and SME growth. He distinguished between SMEs and startups, emphasizing that startups leverage technology and innovative practices under conditions of extreme uncertainty. Sibanda called for a regulatory environment that supports startups and SMEs, suggesting funding instruments like gap funding, R&D incentives, and supply enterprise development to enhance market access and R&D investment.
Venture capital funds typically provide capital to early-stage, high-potential startups in exchange for equity. Addressing entrepreneurs' concerns at the 7th SADC Industrialisation Week in Harare, Mnangagwa highlighted the need for startups to expand their ideas and businesses. He attributed the NVCF's inactivity to the absence of a CEO with private sector experience but noted that this issue is being addressed.
The Reserve Bank of Zimbabwe's 2022 MSME survey estimated the informal sector's annual turnover at US$14.2 billion, with US$8.6 billion in GDP and US$2.5 billion in unbanked cash. Given the government's current inability to fully fund venture capital, Mnangagwa emphasized the importance of forming alliances with venture capitalists and asset managers.
The National Venture Capital Company is exempt from the Public Procurement and Disposal of Public Asset Act, enabling it to operate competitively and partner with entrepreneurship drivers. The government is also committed to supporting MSMEs' participation in capital markets and creating a financial architecture that serves the government, people, and business community.
Mnangagwa acknowledged an information gap regarding opportunities for small businesses and individuals in capital markets, including exchange-traded funds, C-Trade, and real estate investment trusts. He urged the Securities Exchange Commission of Zimbabwe and the Zimbabwe Stock Exchange to educate citizens about these opportunities, highlighting the C-Trade platform that allows young people to participate in the stock exchange via their phones.
McLean Sibanda, managing director of Bigen Global, stressed the need for policies promoting innovation and SME growth. He distinguished between SMEs and startups, emphasizing that startups leverage technology and innovative practices under conditions of extreme uncertainty. Sibanda called for a regulatory environment that supports startups and SMEs, suggesting funding instruments like gap funding, R&D incentives, and supply enterprise development to enhance market access and R&D investment.
Source - newsday
