Problems And Prospects Of African Startups Development. Exclusive interview with Sandras Phiri, CEO

Startup Circles is Africa’s No.1 startup school and online accelerator helping entrepreneurs from over 30 countries build commercially viable businesses quickly and cost effectively.

Sandras Phiri, CEO, BSc Computer Science, MBA (UCT) Entrepreneur and startup coach. Worked with 25 organisations, lectured at over 17 universities and been to 22 countries. Worked in banking, IT, Education.

In our interview, we talked about the problems and prospects for the development of startups in Africa.

What benefits does offer startups?

– Straight to the point education and mentorship by founders and investors and putting the startups in front of investors looking to invest. All our programmes are taught by practitioners. We had startups receive investment on the spot at our Demo Day.

What startups are currently the most interesting for investors?

– Startups that are showing a lot of traction and generating cash or close to generating cash. Startups that will take years to start generating revenue are not very interesting at the moment.

What are the problems with attracting investment in startups?

– The biggest problem is many startups are not ready to receive investment. They fail to meet the basic criteria that investors look for in startups. This is not entirely the fault of the startups. This information was not readily available. Hence we provide programmes to prepare startups for investment at Startup Circles

Are there economic and legal barriers to the development of startups in South Africa?

– Compared to other African countries, South Africa has a lot of support for startup development. However, there is need for clarity on requirements as most people have been made to believe that would get free money for just having an idea. The legal barriers are mainly around hiring and firing people. It is very difficult to terminate employment for people when they are not performing or when business requirements change. Small business need to have more relaxed rules as they cannot afford to keep people that are not performing. To avoid these issues startup employers tend to hire people on freelancing websites or hire part time workers.

How much investment in startups this year?

– Enygma Ventures, Empress Fund and have invested R30 million ($1.7million) in 5 startups this year.

In which African countries are the most active development of startups?

– We’re seeing a lot of activity in South Africa, Nigeria, Zambia, Uganda and Tanzania.

What are the prospects for the development of startups in Africa?

– There is a lot of activity and capital for startups. The challenge is the startups to be investor ready.