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By Andia Chakava, Managing Partner, Afrishela
The African Development Bank estimates a US$42 billion financing gap for African women across business value chains, including US$15.6 billion in agriculture alone.1
Closing a gap this size means looking at different types of capital – including the power of collective action through angel investing. An angel investor, by definition, is an individual who provides their own resources as early-stage funding for a business.
Angel investing in Africa often begins informally – family, friends, and “fans” pooling resources in what Kenyans call harambee. Yet these early contributions, when structured with clear terms and accountability, lay the foundation for sustainable growth.
The importance of structure
One lesson from my own journey: always keep records. In supporting my father’s enterprise, I realised later that undocumented contributions blurred ownership and accountability. Even light agreements – convertible loans, equity terms, or repayment schedules – create trust and discipline between founders and angels.
Active vs. passive angels
Investors can choose active or passive roles. Active angels provide advisory hours, market access, or board participation. Passive angels, through funds or networks, gain exposure to SMEs, which generate 80% of Africa’s jobs, without the time burden of direct engagement. Both approaches are valid, but clarity on expectations and reporting is essential.
Valuing grit and resilience
Beyond financials, we look for grit: founders who pivot after floods destroy inventory, who persevere despite unfair contract losses, who show up even amid personal challenges. Supporting such resilience is as critical as providing capital.
Examples from the field
- Advisory equity: a founder offered shares in exchange for advisory support, showing that entrepreneurs value expertise as much as money.
- Network introductions: helping a Ugandan business expand into Kenya by connecting them to regulators and networks prevented school dropouts among girls.
- Smallholder support: founders aggregating smallholder farmers needed introductions to impact investors; angel support helped them transition from personal capital to institutional funding.
- Passive success: one passive angel investment recently listed on the stock market — proof that even hands-off approaches can yield strong outcomes.
Practical advice for angels
- Define terms early: even informal contributions should have clear agreements.
- Choose your role: active or passive, but be clear on expectations.
- Support resilience: look for founders with grit and adaptability.
- Leverage networks: pool resources, share skills, and democratise access.
- Balance risk and patience: angel capital is patient, but not a grant. Outcomes vary, and investors must be prepared for both wins and setbacks.
African companies backed by angels have a follow-on funding rate of 40%, rising to 65% for companies in the portfolios of angel groups. Through the Catalytic Africa matching fund, US$1.5 million of catalytic capital alongside US$1.6 million from 207 local angels supported 22 start-ups that went on to raise US$7.2 million in follow-on capital — more than twice the original investment.2
Through Women Creating Wealth and Afrishela, we have forged a partnership with Rising Tide Africa, where we are deliberately growing a pool of women angels, so that this first layer of capital sits with people who understand women entrepreneurs.
Angel investing is not only financial. It is relational, strategic, and impactful. By offering capital, credibility, and community, angels help entrepreneurs move from seed to scale — building businesses that create opportunities for women and youth and strengthen Africa’s economic resilience.
References
- African Development Bank. “Why AFAWA?” Affirmative Finance Action for Women in Africa. https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/afawa-affirmative-finance-action-for-women-in-africa/why-afawa
- African Business Angel Network (ABAN), UNDP and Briter Intelligence (2026). Angel Investment Survey Report 2025. https://abanangels.org/wp-content/uploads/2026/04/Final-ABAN-2025-Angel-Survey-Report-.pdf
