RENEW Strategies

The Investment Challenge FAQs

THE INVESTMENT CHALLENGE FAQS

An innovative program designed to grow companies, build nations and leave a legacy.

What is The ABG Program?
It is an investment program designed and implemented by RENEW. The ABG program is undertaken with financial support from the Government of Canada provided through Global Affairs Canada. The project aims at sustainable job creation through a dynamic and growing small and medium business sector in Ethiopia.

What is The Investment Challenge?
This is the name of a major part of the ABG program – It starts with 500 companies that are taken through a series of training and vetting steps, and results with 50 being selected by investors and RENEW into The Exchange. Hopefully, a good number of those that get into the Exchange will have also received an investment from the Impact Angel Network.

What is The Angel Investment Exchange (The Exchange)?
The Exchange is our San Francisco-style office space in Galani Cafe Warehouse, located in Addis Ababa, Ethiopia. This is where The Pitch sessions will be held with the IAN, and where 50 companies that make it through The Investment Challenge will receive intensive business growth coaching (mini-executive MBA).

Is ABG or The Exchange an Accelerator?
No. Although a goal of ABG and The Exchange is to accelerate local business growth and create sustainable jobs for Ethiopia, the bulk of the support companies will receive will occur after they have received an investment. Most accelerators and incubators train companies leading up to an investment. ABG will also provide this but in partnership and through City Partners.

What is an Angel Investor?
A wealthy person that invests directly in companies, versus a fund that invests in companies. They are a type of private equity investor. They likely have extensive experience running successful startup companies or are executives in large corporations. They also have strong networks in the business community. Why are they called angels? Because they generally invest in companies at early and risky stages of their growth.

What is The Impact Angel Network (The IAN)?
This is the largest North American network of angel investors dedicated to investing in companies in Africa. The IAN was founded and is managed by RENEW. The IAN has become one of the most active investors in Ethiopia. They have made 8 investments in 7 companies. The companies they have invested in support more than 1,100 jobs and generate millions of U.S. Dollars in export revenue. The average investment the IAN makes is currently $500,000 per company.

What is Private Equity?
A broad type of financing for companies and a major driver of private sector growth in developed and emerging economies. There are many types of private equity investors – angel investors, VC funds, PE funds, mezzanine funds, leverage buy-out funds. Private equity investors exchange money for shares in private companies. They make money from dividends and from selling the shares at a future date for a higher price than they bought them.

Who is RENEW?
A private equity investment firm that manages the Impact Angel Network, runs the ABG Program and the Investment Challenge, and works out of The Exchange.

What Makes RENEW’s Investment Model Unique?
As an investment manager, RENEW represents investors versus companies. Most development programs and local firms work with companies and help them find investors. RENEW’s model works the other way around – we represent investors and help them find, invest in and grow companies. This helps unlock more capital for local companies and builds trust between concerned investors and fast growing companies. The local companies and their employees are the main beneficiaries of RENEW’s model.

What Type of Companies Qualify for The Investment Challenge?
Ideally, an existing company that has sales greater than 7,000,000 ETB per year. However, new ventures will be considered if the management team is very strong and experienced. We look at all sectors. The companies likely to make it into The Exchange will have: 1) Owners and management teams that are very trustworthy, coachable and open to outside shareholders; 2) A clear and focused business growth plan they can clearly articulate; 3) An attractive business with good margins; and 4) Equity being offered to investors at a realistic valuation (a good price).

How Do Companies Get Involved?
Two ways: Companies can 1) Contact RENEW directly, or 2) Contact City Partners located in Addis, Hawassa, Dire Dawa, Mekele and Adama. City Partners will increase the likelihood that a company will advance through the stages of The Investment Challenge because they have been trained by RENEW to help companies increase their success of attracting an equity investor.

How Can Other Stakeholders Get Involved?
Organizations can sign up to be City Partners. City Partners can be NGOs, business associations (like chambers), banks, and private firms. City Partners get training from RENEW and help find and coach companies as they go through The Investment Challenge. Other can ask to get training on equity investing from RENEW.