Tech hubs and accelerators are a good way for investors to build relationships in the target market and to get acquainted with the local entrepreneurial community. This can mitigate some of the risk inherent to angel/venture investing. Social investors should consider becoming the kind of corporate partner the author suggests are necessary for accelerators to become sustainable.
In a post about Africa’s growing tech hub community, researcher Dan Evans (whose work we’ve covered previously), writes:
“Based on the maturity and business viability of many of the small tech firms that we have met with over our data collection visits, and the modification of many incubators’ business models, we completely understand the thought-process behind this “pivot” in strategy. For example hubs that we have previously visited like iceaddis and iLab in Liberia, andHiveColab in Uganda have all scaled back their original lofty aspirations. These hubs originally planned for a multi-tier membership model, charging rent for office space, and acquiring equity of the companies that were the most mature. Based on these assumptions, they thought they could be self-sustaining in a short period of time. All have scaled back their expectations and operate more as collaboration spaces for the local tech community and offer technical training…
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