RENEW Strategies

Private Equity: New Options for Finance in Ethiopia

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Lulit Negash
| March 19, 2014

Last week, RENEW's Matt Davis presented an equity investment workshop in Addis Ababa in partnership with USAID's AGP-AMDe. Workshop participants included commercial bankers, local entrepreneurs and government officials of Ethiopia.

The key topics raised included: what private equity (PE) is and why is it important to Ethiopia; how PE investors evaluate opportunities; how the PE process works and how to attract PE investors. The purpose of the training was to increase understanding among participants on what, how and why PE works for Ethiopia, how each group can benefit from PE and how to attract equity and “pitch” one's business to investors. A key learning point was how PE differs from debt, which was a main question among participants. Watching a live demonstration of pitching and the conversation between investors and business owners helped clarify their understanding. Overall, the training was a success in creating a general understanding about the PE world, and many of the trainees left with new knowledge on how PE could be a part of their individual stories and how PE will help grow the capital markets of Ethiopia.

Individual comments from the day included:
“PE investment is a brand new industry in Ethiopia. PE firms will help grow the untapped small enterprises and economy of the country."

“Know your numbers. PE is like getting married. The training enhanced my understanding about the PE market, the process involved in PE, the requirements of investors and how to best pitch to investors."

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