African startups need foreign ties to get funded

A new study finds that most venture capital for African startups comes from foreign investors. This means founders with international education or work experience are far more likely to get funded than local entrepreneurs.

Many assume that as venture capital grows in Africa, it will naturally fund local innovation and create local wealth. It turns out, foreign money mostly funds founders who already have foreign connections, creating a specific kind of startup ecosystem. This means local entrepreneurs without international experience struggle to get off the ground, even if their ideas are strong.