FIFI PETERS: Talking about jobs, and particularly jobs for young people, we have an interesting story in terms of a fund that may make it a little easier for young businesses to get going. The Anzisha Prize has launched a youth entrepreneur fund that is aimed at investing in entrepreneurs in Africa between the ages of 17 and 22. Here to explain how the fund will work is Josh Adler, the executive director of the Anzisha Prize. Josh, welcome.
JOSH ADLER: Hi Fifi, thank you. That’s the Anzisha Prize.
FIFI PETERS:. It’s an important initiative that you have launched regarding this entrepreneur fund. How big is it?
JOSH ADLER: It’s a half-million dollar fund, which is fund one, and we’re hoping to grow that over time.
FIFI PETERS: All right. I don’t suppose off the top of your head you can translate that for us in rand?
JOSH ADLER: It would be just north of R7.5 million.
FIFI PETERS: All right. It’s not small change that we’re talking about here. Just give us the specs in terms of the criteria – and who can get your money.
JOSH ADLER: Maybe I can take a step back first, which is to say that the Anzisha Prize is a partnership between African Leadership Academy, which is a pioneering secondary-education institution in Africa, and a number of other partners looking at leadership development. We’ve really started to want to reframe entrepreneurship as a career. How do young people move from secondary school in particular, but also (from) a tertiary education directly into entrepreneurship without getting a job first?
There are three big parts of that work. The first is influencing young people, teenagers, to make that choice and a huge amount of work with parents and teachers (goes) to support that choice, and then finally people who need to grease the wheels of that choice – policymakers and investors. The fund that we’re talking about is part of that third bucket of work and we’re confident that if a movement around entrepreneurship as a career is created, there are about a million jobs that could be created by the entrepreneurship and education sector of a time by accelerating these transitions to very young entrepreneurship. That’s the background.
But the criteria for the fund – it’s really simple. You have to be a graduate of one of our programmes at this stage. We’re not trying to create a fund for everybody. We’re trying to pioneer how these funds could work. The idea came from, well, I don’t know if you’ve ever tried to negotiate evaluation and equity valuation as a teenager, but it’s a really, really difficult thing to do.
FIFI PETERS: Never.
JOSH ADLER: Equity is a really difficult concept to understand if you and young people are passionate about your ideas. But if you try to talk to a teenager about debt and cashflow, it’s a much easier conversation as a teacher. So that was the one grounding element.
The second was education institutions. We have a bit of a problem in our sector, both in education and in the entrepreneurship sector, where we want to own the whole value chain. So whereas currently teachers and universities and schools are thinking about creating funds and building investment kits, we know nothing about that and took a different approach.
We said we’re just going to match the investment industry. So it’s a guaranteed match fund, which means we provide a letter of guarantee to very young entrepreneurs that they can go and shop around to other investors.
What that does is it incentivises and de-risks investments into this age group and deals with the trust deficit, because it’s almost like if you graduate with a degree or a diploma from a reputable institution you’re more likely to get a job. The thesis we’re testing is if you leave a programme with a letter of guarantee, which is essentially a cheque in hand, what did that do for your entrepreneurship prospects? We’re quite excited about what we’re seeing so far.
FIFI PETERS: A point a well made. But, as you say, the young people that do qualify for this are those who have been part of your programme. So if we have a young person listening right now who fits the criteria in terms of age and wants to be able to access this form of capital and the guarantee that you speak of, how how can they do so?
JOSH ADLER: Well, the Anzisha Prize and the academy are open to all, and they’re essentially full scholarships and fellowship opportunities. So we currently choose 26 fellows a year from across the continent. There are always South African fellows in that mix, and we’re actually about to announce this year’s fellows. They get some financial support and access to apply for the fund.
But broader than that, I think what we need to do is lobby other institutions to create guaranteed match funds. We’re a little fund. The idea here is that our work inspires a thousand copycat funds, rather than we become a billion-rand or billion-dollar investment vehicle, because we need to capitalise that sort of systemic change.
FIFI PETERS: I think every effort that is made in the space of supporting entrepreneurship and enabling entrepreneurs to get going with business and create jobs and make a meaningful contribution to the economy is a welcome one.
We’ll have to leave it there for now. Josh, thanks so much for your time. Josh Adler, the executive director of the Anzisha Prize.