TANZANIAN new entrepreneurs have been advised to use the 10-million-US-dollar (15bn/-) Savannah Fund to start up and expand their businesses.
One of the Fund's founders, Mr Mbwana Alliy, said it is an attempt to create a Silicon Valley style accelerator for East Africa. The new seed capital fund, he said, is committed to finding and investing in high-potential East African 'pre-revenue' start-ups.
The fund, launched recently, has an idea where classes of five early stage, high-growth Web and mobile start-ups will get $25,000 (about 40m/-) for 15 per cent equity.
"They will then have three to six months to prove themselves. Successes will have a chance of follow-on funding in the region of $100,000 to $200,000," he said.
The fund was founded by Mr Erik Hersman, Mr Paul Bragiel and Mr Mbwana Alliy from Tanzania, formerly a product manager for Microsoft, and funded by several limited partners from Kenya and Silicon Valley, including folks from Zynga and Draper, Fisher, Jurvetson.
Savannah Fund will initially focus on a few countries including Tanzania, Kenya, Uganda, Rwanda and Burundi, East Africa, though it may eventually consider opportunities in other African regions in the not-too-distant future.
The fund's partners aim to bridge the gap in early stage and venture capital investment that currently exists in Africa by providing start-up entrepreneurs both with monetary capital and access to a vibrant mentor network comprising African and Silicon Valley entrepreneurs,he said.
It would find and invest in early stage, high growth web and mobile start-ups addressing the Sub-Saharan Africa market. The new fund will typically make investments in the region of $25,000 to $500,000.Mr Mbwana says the thing that makes Savannah special is that it's "a fund for entrepreneurs by entrepreneurs."
The fund has caught the attention of a number of US-based investors including Yelp co-founder Russ Simmons, Tim Draper, Dave McClure and Roger Dickey and Dali Kilani of Zynga.
"I can say that companies interested should be focused on building regional and continent wide ICT business (web or mobile space) at least across East Africa and for those early stage start-ups who want to be in the accelerator, be prepared to move to Nairobi - first cohort of start-ups is in September, applications are now open," he said.