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#4 | Closing the Gender Funding Gap Across Africa with Pauline Koelbl, CEO at AfriProspect and Partner at ShEquity

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Pauline Koelbl is a leading innovation expert in developing & emerging economies, impact investor, and seasoned impact-driven team leader with over 20 years’ experience in international affairs and venture philanthropy.

Pauline is Founder and CEO of AfriProspect and Founder and Managing Partner at ShEquity, where she is focused on closing the gender funding gap across Africa.

You can connect with Pauline via:

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Episode Transcript

Matt Brown: [00:00:00] Hello, and welcome to Hack the Deal, where we sit down with the world's leading experts in emerging tech to uncover the latest trends, why they're important, and how you can get involved. I am your host, Matt Brown.

My very special guest on this episode of Hack the Deal is my good friend, Pauline Koelbl, who's doing some incredible work empowering youth and women across Africa. Pauline is a leading innovation expert in developing and emerging economies, an impact investor, and seasoned impact driven team leader with over 20 years experience in international affairs and venture philanthropy. Pauline is founder and CEO of AfriProspect, and founder and managing partner at ShEquity, which we'll talk more about a little later.

In this episode, we talk about Pauline's journey, including her escape from the Rwandan civil, her path to the U.S. where she was awarded with a double Fulbright fellow, her work at the UN, and ultimately the work she's doing today to close the gender funding gap across Africa, including actionable advice on how we can all participate,[00:01:00]

Pauline hello, and welcome to the show.

Pauline Koelbl: Thanks so much for having me.

Matt Brown: Yeah, of course. I'm super excited to dig in here because you've got an incredible background an incredible story, and in general are doing some really important work across the region. Why don't we start off by telling the listeners a little bit about your background and ultimately how you grew up and how you got into innovation and entrepreneurship.

Pauline Koelbl: So I was born and raised in Rwanda, one of the most beautiful countries I would say. And so I grew up in a very loving family, caring family, as a kid, I never had to worry about what to eat, you know, or anything else. I had to worry about doing what I'm told to do as any kid who grew up in Africa. You know, if you don't do what you're supposed to do, you know what happens. I don't know if you know that Matt, do you know what that means?[00:02:00]

Matt Brown: I think I had a similar upbringing.

Pauline Koelbl: And it's funny growing up, then. I never thought this is abuse, you know? So you get punished if you don't do what you're supposed to do. So anyway, fast forward, I was in law school, in my first year of law school, when the 1994 event happened. The civil war that led to many people leaving the country and also many other people losing their lives.

So this was something that no one can ever prepare for. And again, you're going from being a happy kid where you just have to worry about going to school, getting your grades, to running for your life. And so I must say I'm one of the few lucky ones, because I made it, alive, and end up finding myself in DRC Congo, and then suddenly became a refugee.

And I got to really understand what that meant when I was there. You [00:03:00] basically become a number. And being a number means your name, your identity, doesn't really matter. No one really cares. You're just one of the millions, and we were millions, because many people have left, Rwanda in search of safety, hoping that things gonna calm down and we can all go back.

And in essence, as a kid, you think you go back to having a normal life. But this never happened. The one thing that also hits you when you are in a refugee camp, where you don't know what's going to happen tomorrow, you have no agenda. Every day looks the same. You just lose a purpose. You have no sense of what you're supposed to be doing.

So I was able to meet up with a few former friends, classmates from Rwanda, and we decided to go and volunteer because they were quite a lot of people dead on streets. Kids [00:04:00] abandoned, lying on the ground. So we said, okay, rather than just sitting there feeling sorry for ourselves, we can actually go and help. Which then will occupy our minds.

So we're not feeling sorry for ourselves. And so that was actually a good move because, one, suddenly you had a purpose, you had something to do. And also you felt that helping out, on one hand, gave you a purpose during that tragic time, I would say, but also it was a way to learn. What else can you do?

Because at the end, you didn't really know how long you're going to stay there. And lucky enough, a few months later, the first humanitarian organization, they came to work, to help out. They basically hired the first people they found who were volunteering. So I was among the first people were hired to actually help out the refugees and then, you know, be a refugee, helping other refugees.

So my first job was with [00:05:00] UNICEF in DRC Congo. So basically helping, you know, families find their kids, but also kids trying to find the families. And, and fast forward, uh, things didn't seem safe in Goma where we were. And we basically were advised to leave the area or nobody knew what was going to happen. So I tried to smuggle myself out of DRC Congo, and I proudly say smuggle myself, today.

When I look back at that time, it was scary. A few times tried. Wasn't successful. And then kept trying, because that's one thing I learned as well, being in a refugee camp, you don't give up. Keep trying. Try once, you fail, then you learn something. You try again. At some point you make it. So I made it, at some point to actually Kenya.

And then fast forward, I was in Senegal, and later on I was able to immigrate to the U S as [00:06:00] a documented refugee. And then basically had to start from zero. Meaning really zero, because when I arrived in the U S I didn't know anyone, my English was not there. So I was welcomed by families that I didn't know that were very, very kind, took me in, helped me remind myself why I wanted to go to the U S in the end.

And really why I wanted to go to US was I wanted to go back to school. And so when I arrived, I was told, okay, you need to find a job, pay your bills. I said, fine. I can do that. But how do I go back to school? So I got the first job. Did it.

And the families that were helping me basically guided me in terms of how do you go back to register for university, which I did. And sure enough, once I was back to school, I decided to make sure that I do very well. At the end, I graduated with straight [00:07:00] A's and I got a lot of scholarships. And one of them being basically the Fulbright that sent me to Europe, to the UN, and the rest of the history.

When I look back, I was supported by so many people to the point that at the end, when I arrived at a point where I could choose again, what to do with my life, I chose to focus on a purpose driven career. And this has basically led me also to setting up ShEquity.

Matt Brown: What an incredible story. Thank you for sharing that with us.

If I could ask a couple of questions. How old were you when you had to run from Rwanda?

Pauline Koelbl: I was actually a bit grown up, was 22.

Matt Brown: You're 22.

So you were in law school, you said.

Pauline Koelbl: I was in my first year of Law School.

Matt Brown: And then, you also talked about failing to smuggle yourself out of the DRC Congo. What is failing to smuggle yourself out? What does that mean?

Pauline Koelbl: So basically you pay people to [00:08:00] smuggle you somewhere, and then you get caught, and then you're brought back to where you started. And in some cases you get punished. So, and you are watched so you can't leave again. So which means you have to find a different strategy if you want to try again.

Matt Brown: Yeah.

Pauline Koelbl: And so you try different options that, at the end you have an objective, which is to basically get out. To put things in perspective, it wasn't that I wanted to go somewhere because I wanted to go somewhere, right? It was just like, this was the option I had if I wanted to survive to have a future.

And then when I watch today, all the things around refugees, immigrants, in essence, it reminds me of what I went through at that time.

Matt Brown: And so you're 22 when you left Rwanda. How old were you when you, when you made your way to the U S?

Pauline Koelbl: I think I was 27. 27, [00:09:00] 28.

Matt Brown: You spent, you spent five or six years.

You spent six years essentially on the run as a refugee from war working to help make the lives of other refugees as tolerable as possible. You have the opportunity to escape. You go to the US. How did you end up migrating to the U S from Africa? How did that work?

Pauline Koelbl: When I went to Senegal, I actually went with my sister because her husband was working there.

I ended up finding a job and really feeling like this was a good place to be. And also feeling like I could restart my life. But I wasn't making enough money to go back to school. You remember how I had to go to school somehow? And then I was still a refugee, which [00:10:00] means I didn't really have a country that could protect me.

So I had no belonging. The way it worked, every year, the U S government then would decide on which countries that they add on the priority list for immigration, legal immigration, to the country. So I'm talking about legal, right? So they have a system in the countries that will basically process the documentation.

You get an interview, you answer the questions. And then an organization in Tucson, Arizona had chosen me is a person that they were willing to support. And it was interesting later on when I arrived and then we became friends with my case worker, they told me at that time that this organization was interested in starting to accept African refugees, but they were not ready to just take many cases.

So they wanted to have one case and try it and see if it works out. Then they can decide whether [00:11:00] they're going to bring some more. I'd say, you know, so it was in essence, like a, a case study.

Matt Brown: Wow.

Pauline Koelbl: An ambassador for other refugees. But we didn't know it then. Right. But it seems because I spoke some English, not really enough, but also I think I was smart enough.

So I landed very, very quickly. And it was easy, I guess, for them, because I was young, driven, ambitious, really doing everything they wanted me to do because I had my eyes on one goal, which was towards school. I would do whatever they wanted, as long as I can go to school. So then they were super happy with having me.

And then they decided to bring on many other refugees, but I was among the first African refugees that arrived in Tucson, Arizona.

Matt Brown: No pressure.

Pauline Koelbl: No pressure. But the thing is, was again, you put things in perspective. I was coming from far away. I had hit the rock bottom before. [00:12:00] So whatever was pressure for me, that was a picnic.

There was no, I didn't even feel any pressure because I had an apartment, I had everything I needed.

Matt Brown: Yeah, well, what an incredible rollercoaster. From everything's fine and great in law school one minute, to a refugee of war on the run, more or less for, for six years. End up as the trial case for refugees in Tucson, Arizona. You then end up at the, I believe, the university of Arizona, correct.

Pauline Koelbl: That's where I went to school, yes.

Matt Brown: So the university of Arizona, and then afterwards, you ended up in the UK. Tell us how you made the jump from the U S to the UK.

Pauline Koelbl: So basically when I finished my undergrad, I had really done very well. So I had the grades to [00:13:00] basically allow me to get a scholarship many places. And so my professors advised me to apply for a Fulbright scholarship.

I was like, there's no way I can get this one because I just became a US citizen then. So you had to be a US citizen to, to apply. And then the one thing about Fulbright scholarship, you're supposed to go to a country, become almost like an ambassador of your country to these other countries.

So now I'm just a new American, as they call us. I was supposed to pretend I can actually go and represent the US in the UK, which for me was quite intimidating. And then the second I looked at who has applied, who didn't get in. And so, because this is the one country where one language you need to know to be admitted is English.

Because in other countries you have to know the other languages. So [00:14:00] pretty much many Americans who didn't want to learn other languages were applying to, to go to UK. So it was highly competitive, but again, my mentors at university convinced me that I stand a chance. They actually really supported me through the application process. And sure enough, I got it.

And that's how I came to UK. So I was admitted to IDS, which is a number one, actually, a school for international development in the world, almost every year. It's a private institute. I was not going to afford it again, remembering where I came from, but it was fully paid.

By the way. I'm proud to say I got my degrees all the way without having any loans throughout all school.

Yeah. So basically again, a lot of people ready to support my dream, which was to go the way, study, and be able to use my studies to [00:15:00] contribute to society.

Matt Brown: Very cool. I just quickly looked up Fulbright award winners.

There's been 88 Fulbright winners who have won the Pulitzer prize. 60 have won the Nobel prize. 38 have served as heads of state or government. 10 have been elected to the U S Congress. One secretary general of the United nations.

It's quite a distinguished list that you're a part of. So I congratulate you on the good fortune, but also the work that went into that, because that is a, it's quite a feat.

So you make your way to the UK. I believe you went to work for UNESCO. You ultimately ended up, at the African Innovation Foundation. How did you make the pivot from nonprofit to entrepreneurship? Or more importantly, why did you see entrepreneurship as a way to, to build community and build ecosystems as opposed to aid and/or non-profit [00:16:00] service?

Pauline Koelbl: So beyond all the things you just mentioned, I think what this kind of scholarship pushed you to do is reflect on why do you want to get this scholarship? What are you going to do with it? And you write it in a way that you actually also have to be convinced yourself to convince others. So I remember when I was at DABRA in Geneva, really enjoying my job at UN. And as you said, I, I had also worked for, for UNESCO.

By the way, as a Fulbright fellow. And I went back and looked at my files and I was reading about what I had written, and I realized I had achieved the one thing, which was really to build a good network, and also to understand how international systems work. What are the opportunities or the challenges? But I didn't feel like I can share with anyone, my personal story of how I was contributing to making a world a better place.

I was a [00:17:00] part of a bigger system. Which assumably would allow me to do a lot, but what you realize once you are in, you are too small sometimes to feel like you're making an impact. I always remember again how I got there. That's my thing. And whenever I start thinking or questioning, I go back and I realize where I was ahead, many opportunity, many options.

I could stay there and wait until I feel like I'm able to contribute, or look for other opportunities and explore where I can have a direct impact. So that's basically how I ended up leaving. And then I was recruited to join African Innovation Foundation, where, the focus for catalyzing innovation across Africa.

And so, to be honest with you at that time, I didn't really know much about innovation or entrepreneurship, but I was curious to see if there's another way that you can actually [00:18:00] really contribute in a meaningful way. And again, because I had options, I could try it. If it doesn't work, I could leave and try something else.

So I tried it and sure enough, this has been for me, the most learning experience. As an African who grew up in Africa, I have never taken time to reflect on innovation and entrepreneurship in the context of Africa. I have never been taught about this. Like for me, at least at that time, innovation entrepreneurship was almost associated with quote-unquote developed countries, but not developing countries, emerging markets.

So at the job I had to learn about, how the Asian countries have made it, and I kept realizing how no country has ever developed without investing in innovation, entrepreneurship, and home grown innovation and entrepreneurship. And I was equipped with the tools and the money to basically go and find the [00:19:00] best innovators, and then give them a platform.

One to get funded, but also to tell their story so they can inspire other young Africans. But also the global audience to realize that Africa has the capacity to innovate, to solve challenges on the continent, but also the capacity to help solve the global challenges. So it has been quite exciting to learn on the job and then become a champion and the catalyst for innovation and have a chance really, to work with innovation enablers, and other catalyst across the continent.

Because my job involves basically working with all countries. From Bamako to Cape town, talking innovation, finding the best innovators, and also connecting them with the right partners and the right investors so they can grow and scale their businesses.

Matt Brown: Very cool. And we'll touch on some of the [00:20:00] things that you're doing now to help scale innovation across the continent.

But before we do, I've heard you often say entrepreneurship and innovation, not aid. Can you tell us a little bit more about what you mean by that?

Pauline Koelbl: Yeah, I think a lot has been said on this and also books have been written. The point again, as I just said a few minutes ago, no country has ever developed without investing in homegrown innovation entrepreneurship.

So when you look at the Billions and being spent in Africa and other emerging markets in terms of aid or in the name of development. So one has to point and ask, what do you have to show for this much money? So it seems like at least about 50 Billion minimum is spent each year in African terms of aid and in the name of international development.

And also the different research show how this amount is actually written [00:21:00] down as aid going to African countries or other countries. The higher percentage of the money stays back in the countries that are, quote unquote, providing the aid.

Matt Brown: It often comes with strings attached and they're optimizing for the wrong variables. And I can see how that would cause a conflict.

You've spent an awful lot of your time and efforts over the past decade plus focusing on empowering, particularly the youth and women across the continent. Right now, Africa is having a moment where I think the entrepreneurship spirit has been unleashed to the capital markets whereby I think 4 Billion has been raised by new entrepreneurs this year, but we still see less than 1% of that going to women founders.

What are some of the structural challenges that you see particularly around youth and women across the Continent ?

Pauline Koelbl: I [00:22:00] think one is existing bias when it comes to women, there's quite different, systematic biases Whether it's around who gets funded, who gets access to capital based on the fact that most of the women don't have access to collateral.

But also there's a link with the fact that you don't have a lot, actually, you don't have many women capital allocators who are in the position also to make decisions. Because at the end, when you look at the landscape of investment in Africa, the majority of investors don't necessarily look like the people they're trying to invest in.

And this leads to what people have labeled as affinity bias. It goes with the language, the questions that female founders are being asked versus the questions that are asked to men. And [00:23:00] unless we change the picture where you have also more women who are actually in a position to make investment decision, which means then they're not going to be applying the same bias that we're tending to see that's leading to this really alarming statistic, not much would change.

And the other issues around the existing ecosystems that are not really in a position to provide the kind of support that needed to actually address those structural challenges. Not knowing that if you are operating in a different African ecosystem and you are a woman running a research businesses, the kind of challenges you face might make it harder for you to seem like you are investor ready. Which means at some point you might not even get an interview to pitch to investors.

[00:24:00] So one, you might not be able to get in the door to share your story. The second, once we get into the door, you're pitching to people who might have some biases, whether they're conscious or unconscious, that lead them to prefer to invest in the male counterpart instead of you, because of the assumptions they have.

We are working on this. That's why an initiative such as ShEquity exists because we realize, one, we can sit down and worry, and be kind of disappointed by those statistics. Or you can put systems in place that are addressing some of those risks and also those structural challenges.

And second, you put into place teams that will be screening the investment deals without having those biases, whether they're conscious or unconscious.

Matt Brown: What's startling to me is the research is very, [00:25:00] very clear on this topic. Investing in women, founders in technology yields a 35% better return on investment than investing in men.

You would think that institutional investors would incorporate this public data as part of their mandate when they're deploying capital? Why aren't we seeing that data translate into results?

Pauline Koelbl: It's all about perceived risk because, one, Africa, for many who haven't spent enough time on the African continent it seems to be a risky continent to do business with. Which again, this is really tied to perceived risk because, investors like you or other people who actually spend time on the continent one they're yet to realize that you're talking about 54 countries or 55 depending on what you use. Right. So to think that the whole continent is [00:26:00] risky? How is it possible? Right. So that's number one.

The second is, if your target is not Africa and you don't have a team on the ground, perhaps you have other options you can invest in Europe, and in the US. You ask yourself, why should I go to a continent that I don't know much about that also the media and everyone seems to tell me that it's too risky, right?

But the good news is those investors who are coming on the continent and taking the time, wanting to work with the local teams. And then manage to distinguish the perceived the risk and real risk, and divise a strategy to actually have a risk mitigation. They realizing this is the best place to be because Africa is not just the next frontier, it is different. It is happening right now.

Again, you mentioned four Billion raised this time. So the investors who are coming in and making those investment decisions and [00:27:00] seeing the up side, they're in essence, paving the way where other people come in, because at the end of the day, you need leaders in the markets and then other people follow.

Matt Brown: I couldn't agree more. And to that point, the reason I got interested in Africa was because it reminded me a lot of Latin America, which is a region that I know well. And what happened in 2016 as you had big institutional investors start making bets in the region and that unleashed a flood of capital to the region that is resulting in what we're seeing today, which it's essentially a unicorn factory right now in LATAM.

I suspect we're going to see the same in Africa. We're just starting to get past the first wave, where some founders are starting to have some mega success and then recycle some of that capital and some of that knowledge back into the startup ecosystem. But we're still not, we're still not seeing it go to the right people in the [00:28:00] ecosystem. We're still not seeing it reach women founders in particular.

It seems to me like there's a huge arbitrage opportunity here. If we know that women are better stewards of capital, we know they generate higher ROI. What can we do as investors to arbitrage this?

Pauline Koelbl: So as investors, we need to be putting our money where our mouth are, because I think there's quite a lot of talk about the gender funding gap that we all discuss in different forums. So we need to pause and ask, I would say for how long can we discuss this issue as if we can solve it.

And second, we need to be working together and also investing in existing structures that have set up a system to actually address this. And at the end of the day, we all want to generate profit for our investors, but also have an impact.

[00:29:00] And one thing that is clear, investing in woman led businesses give you both. More than any other area you can invest. And also today, when everyone is concerned about climate change or other issues, there's quite a lot of research showing how, if you invest in a woman, knowing that you're going to have a financial return, but you're also going to have a social and environmental return.

So one concrete example of how we support investors who want to achieve the triple bottom line is we have setup structure where we have a technical assistance facility called SHEBA, shEquity Business Accelerator, which basically allows us to identify promising businesses that might not be ready for investment, and work with them for about 16 weeks, in essence, around derisking and restructuring and getting them [00:30:00] investment ready before we can actually consider them for investment. So we are very intentionally focusing on the women.

One of the challenges that you hear many investors citing is that they can't find a deal. You know, they say, okay, fine. I'm interested in investing in women in Africa, but where are they?

One other statistic that gets repeated over and over is that there's 40% of SMEs in Africa that are run by women, but then investors say they can't find them. And one of the reasons those business, you can't find them is because many investors are looking for perfect deals. If you coming from Silicon Valley, your view of a perfect deal is the same deal you have seen in Silicon Valley, even though the environment, the ecosystem is not the same.

So working with a structure like SHEBA, where we know that there's many business, they exist there, [00:31:00] but those business might not be appealing to investors who are ready to write checks, and working towards getting them ready. That's number one. So broadening the pipeline.

And the second is being able to build that pipeline where, one, it can write early stage tickets to actually get more people moving towards a higher ticket. The early stage investment segment is also where I've seen many investors are going in. Why? Because the risks are higher, but the reward is also higher. But only those investors who are in the market, who understand the culture and all the things are in the ecosystem, can take the risk to go there because they would have a risk mitigation strategy to basically make sure that when they write checks, they're also providing the technical assistance facility or other options to [00:32:00] get the money invested, to go directly, to building a business, instead of addressing other things that many local founders struggle with, that if we ignore them, then it's no good for the business either.

Matt Brown: Yeah. It seems to me like at a minimum, there's a number of ways that you can mitigate risk. Position sizing is one of them, right? So let's say investing in women led companies is more risky, which the research would contradict that, but let's say that it is more risky. Then a couple of prudent strategies you could deploy is, number one, become an advisor to the company.

Pauline Koelbl: Yeah.

Matt Brown: And put in some sweat equity and help build that sustainable knowledge base to make them successful. The second would simply be position sizing. By controlling the amount of capital that are going into those bets, you can still capture some of the increased upside while managing your [00:33:00] downside risk. And so these are known strategies within the startup ecosystem that people deploy.

The interesting point that you made around people are looking for Silicon Valley like deals or deals that they've looked for before. I was guilty of that too, when I came to the region. You go with what you know, in the playbook, until you understand the contextual framework by which businesses are operating on the continent.

Once you understand that, you understand that while the game is generally the same, the rules are slightly different. And by looking for deals that look like Silicon Valley deals or even Latin American deals on the continent, you're actually increasing your selection bias because what you're going to end up doing is backing a lot of non-African founders on the, on the continent, right?

Who are exploiting those similarities to access pools of capital that are a lot easier to raise. And [00:34:00] not to say anything bad about them. I think there's plenty of non-African founders doing fantastic work across the continent, but there's not enough capital going to African founders, particularly African women founders.

So for those of us who would like to do more, and would like to get more involved in backing women-led founders, or allocating a percentage of our portfolio. How would you advise us to get smarter about the topic and actually start putting our money where our mouths are?

Pauline Koelbl: So there are different options to consider. One is, if you have the time and you can spend it in understanding the market, go on the ground and get a feel of what is real risk versus perceived risk, because at a distance you getting information that has been filtered for different reasons.

Of course, today you go from Nigeria to, Chigali, to Nairobi, to Johannesburg, to Cairo. [00:35:00] So you will just quickly realize that you cannot be talking about Africa as one market.

Matt Brown: Yep.

Pauline Koelbl: You will confirm that you need to have a strategy for each market. And also look at the opportunity in each market. Which means it becomes easier for you also to devise a mitigation strategy.

Because if you thinking, okay. When I invest in Africa, don't know where to go. Wow. Where do I begin? Too much risk. You never going to begin. So that's if you are ambitious enough and you have the time, and you want to go and test it yourself. And then once on the ground, you meet different founders, get to know them because at the end, when you invest also, you have to build trust with the companies you're investing in.

So being on the ground and getting to know them helps you. If you can't do that, then I would suggest you work with the likes of ShEquity or other funds. They're on the ground, they have local team. They [00:36:00] understand the cultures. Basically that can help you address some of the questions you might have, invest your money, but also that are willing or possible to give you opportunity if you want to get involved as a mentor, as an advisor to the team.

So that could be a good transition where you go through existing structure to basically invest. The advantage of this, it means if you have more capital, you can actually invest in more companies because it means you don't have to worry around, finding them yourselves. And again, at the end, trust is important and understanding the ecosystem, the culture is important. So going with an existing structure, will give you probably a lot of options.

And then the other option is joining syndicates. I think that's what you're doing Matt. You do it very, very well. So when you join syndicates, you're basically, one, sharing, putting capital together, assessing the risk together, but also on the [00:37:00] top of that, especially if your intention is to invest in every stage startup, you work together to support the company that you invest in.

When you invest at early stage, the cash alone is not enough. I can never over-emphasize this. Cash alone is not enough. You need to put cash on the table, but you need to be ready to also roll up your sleeve and support the founder on different aspects of the business, including strategy, including the organization governance.

Because again, most of them might be the first time they're founding a company, they understand the business, they understand the market. But they might need someone to advise on other aspects of the business that you have the capability to do. And then the other angle is really to open your network, you know?

So I go to meet you, Matt, because I was speaking to a friend, Tomi Davies, right? So you and I, we have a network that connects us [00:38:00] to other networks. Most of the founders that you investing in, they might not have the same network as yours. Whether you go through the existing structure, you join a syndicate or you get on the ground and identify who to work with, those will allow you to actually make the right investment decisions.

Matt Brown: I agree with all of that. I've given this a lot of thought because I'm also thinking in the context of my own personal portfolio. How do I fund more female entrepreneurs? And it's a hard question. The syndicate model doesn't really work well because what I've learned in building a syndicate, and we have one with Prodigio Capital, is that most of the LPs within a syndicate are looking for lookalike deals, right? They're looking for the Silicon Valley like deals. Give me the tier one VC that is co-investing, give me the unicorn founder that is co-investing. And it permeates the selection bias that you're talking [00:39:00] about.

I genuinely believe the right way to go about this is dedicated funds, that are then accessible to people like me and our LPs at Prodigio Capital who want to allocate a percentage of their net worth to not only the asset class of startup tech, but in particular, the arbitrage opportunity of investing in women led founders for outsized returns. And the challenge with that of course, is funds typically have a high minimum. They're typically larger check sizes.

So. One of the things that we've been playing with at Prodigio is how do we set up an SPV? Fee-free. No fees, no carry, that would allow people to contribute at a check size that is comfortable, that makes sense for their risk appetite, to a vehicle that could then allocate directly to ShEquity or other funds with a specified mandate.

And it would be a special purpose vehicle solely focused on funding women entrepreneurs, and capitalizing on that opportunity. [00:40:00] We're still playing around with it. I would love to get the feedback from the people in the audience. I'm more than happy to carry the administration cost of doing this.

I think it's a worthwhile mission. I will contribute my own capital to it as I look to round out my own portfolio. But as you're listening to this, please reach out if you would like to get involved on that level.

If people want to learn more about ShEquity and the work you're doing, particularly around innovation and entrepreneurship across the continent, what's the best way for them to do that.

Pauline Koelbl: The best way to learn about ShEquity is to reach out to me at my email address. I'm assuming you can put it somewhere in notes Matt.

Matt Brown: It will be in the show notes. Yes.

Pauline Koelbl: It's p.koelbl@shequity.com. And also our website, www.shequity.com. We are also on LinkedIn and at, @ShEquityAfrica on Twitter [00:41:00] and Facebook. And I would love to talk to you.

And I think what, Matt, what you planning to do sounds amazing. I think a very well structured and targeted syndicate works better than the typical ones where you let people decide, or reinforce existing bias. And so for us, the reason I set up ShEquity really was exactly that.

Initially I had the same choice to join a syndicate but I realized, depending on who you're able to influence to come on board, it's not scalable. And I realized if we wanted to close the existing gender funding gap, which right now in Africa is 42 billion US Dollars, it was important to have a fund that's fully dedicated, really investing in early stage companies.

And we believe that the combination of our strategy that involves Sheba, which basically is a TA facility and [00:42:00] the ShEquity fund, allows us to minimize the risk before we can actually write checks and build, a trusted pipeline that every investor wants to have, because at the end of the day, I know Matt, you were saying, it's hard to find female founders.

I don't think it's hard to find them. It's hard to find that they're investment ready, fitting our perception of what's investment ready as we know it. But our intention is actually to build an ecosystem where we get more women founders into the pipeline, get them fit for investment, and then invest in them. Then that's not a problem. When we launched our first cohort of Sheba this year, we got 2000 applications from 40 countries in a month.

Matt Brown: Wow.

Pauline Koelbl: Of course not all of them were qualified, but again, that shows you how many women founders who are out there getting [00:43:00] ready to be funded. So if you have an ecosystem that is working towards say onboarding those 2000 into some kind of support. And again, I understand this is not the business of all investors. Investors want to find a perfect deal and invest in them, but I'm also sharing this because at the end of the day, there's a need to build an ecosystem that actually address existing, structural challenges in the biases that female founders face. And I think there's an opportunity for blended finance, where public and private investors work together to build an ecosystem where we de-risk or minimize the risk pool of potential deals that we can all invest in.

And so if we all wait to find the perfect deals, I'm afraid we're going to have to wait for long. Then we're going to continue to complain about not finding [00:44:00] deals. But like everywhere in the world, there's always the tools and the way to move from A to Z. So we can apply that. And that's exactly what we're doing at ShEquity.

Matt Brown: To me, it's clear. The data is clear that there's a fantastic arbitrage opportunity here to recognize outsized returns. The easiest way to to capture that is to ensure that you don't let selection bias creep into your capital allocation. The easiest way to do that is to outsource your selection to people who are experts in this field, and perhaps don't have that selection bias.

So it is clear to me that every investor in early stage tech should have a percentage of their portfolio allocated to female founders. And they're going to increase their returns by doing so.

Is there any parting thoughts that you would like to leave with our listeners? [00:45:00]

Pauline Koelbl: I just wanted to highlight the fact that we all will benefit by closing the existing gender funding gap.

And in terms of those who are still worried about the risks, we are ready to work with you. Reach out to us so we can actually be able to support you in building a portfolio that you want to have, where you can achieve your financial return and also higher impact. And as we all know, Africa is the place to be. 1.3 billion people. The youthful continent. All opportunities are in Africa.

The sooner as an investor, you look into opportunities in Africa, the better for you. So anyone wanting to make money, have an impact, africa is a place to invest. And investing in women is even the best way to actually achieve the impact and profit at the same time.

Matt Brown: [00:46:00] Fantastic. Fantastic. Well, Pauline, thank you again.

Her fund is ShEquity, shequity.com. I encourage everyone that is listening and found this interesting and insightful to go check it out. And until next time.

This episode of Hack the Deal is brought to you by Prodigio Capital. Prodigio runs a syndicate, allowing you to invest in the best founders across Latin America and Africa. For as little as a thousand dollars, you can get started building your own diversified portfolio of tech startups in the most attractive regions in the world.

There is no upfront fees or commitments, and you get the flexibility to choose which deals you'd like to participate in, retaining total control over your portfolio.

To learn more, check out our website at prodigiocapital.com. That's prodigiocapital.com.