Beyond gut feelings: Rethinking how capital finds entrepreneurs

Asteria Pirola

We talk a great deal about the funding gap facing African entrepreneurs, and rightly so. But less attention goes to a quieter problem sitting underneath it: even when capital exists, it often doesn’t find the entrepreneurs best placed to use it well and those who could use it well often don’t find the right investors. This is not always a story of a human bias in the capital allocation sphere of things. It is more often a story of mismatch. An example, an investor who thrives on fast, high-risk bets funding an entrepreneur who builds cautiously and methodically. Let us extend this example, to highlight another dynamic: a patient, relationship-driven investor who might perhaps never cross paths with an entrepreneur who needs exactly that kind of financial backer. Both sides lose, and so does the economy around them.