African VC is still a “man’s world”, but it suffers for it

The African venture capital sector is still very much a “man’s world”, but the quality of its investments and ability to make a greater impact suffer as a result.

That is according to Omobola Johnson and Andreata Muforo, who together make up half the management team at Africa-focused VC firm TLcom Capital, which is the first focus of a series of case studies and podcasts produced by Disrupt Africa and financed by the European Union under EDF Thematic Blending and Cotonou Investment Facility.

Female fund managers are very much in the minority worldwide. In the US, only nine per cent of decision makers in the VC space are women. In Africa, no definitive numbers are yet available, but female fund managers are hard to come by – a big mistake for the VC world, as data clearly demonstrates a direct link between gender diversity in teams, and increased profitability. The Diversity dividend: Female fund managers in Africa series looks at firms that recognise this truth, and put diversity front and centre.

TLcom Capital is one of those, but Omobola Johnson, the company’s senior partner and a former Nigerian Minister of Communication Technology, said in general there were not enough females operating in the African venture capital space.

“It’s tough, it’s still very much a man’s world. You have to work twice as hard and be twice as good, to be a successful female partner in the world of VC,” she said. 

“So I think there’s a role for venture capital firms to play, and that is to ensure that women that show promise are given stretch assignments, are given more visibility, that they are mentored – that’s very, very important -, that there are role models that they can look up to, that they have people that they can speak to about their careers.”

Muforo said firms need to work on removing biases – conscious or unconscious – which can lead to gender imbalanced teams. She agreed with Johnson that, for the women that do make it into the VC world, effort needed to be made to make career progression a real and enticing prospect.

“Yes you may come into VC, but then once you’re inside the firm you’re not able to grow, because perhaps there’s a gender bias, or even just because there’s not an environment conducive to some of the responsibilities that women have. There’s a number of things to think about, but really there are not enough female fund managers on the continent,” she said.

TLcom, however, is in the vanguard of change in this regard, with two of its four GPs being women. The company has a very dynamic approach to who takes on what roles in a given situation, with each team member bringing their own strengths and weaknesses, their own unique characteristics and experiences, which as a company they try to leverage. Part of that is also gender-based, and the team is cognisant of when and where it is important for the African females to be more visible, and when the white males should be at the forefront.

“We know when it’s important to have Andreata and I speak, or be at the forefront, and we know when it’s important for it to be Ido (Sum) and Maurizio (Caio), or any combination of the four of us. We’ve played that gender card quite well,” Johnson said.

The “gender card” is important in terms of modeling to the ecosystem a strong balance of genders at the top level of a VC firm, and incites trust from the market that TLcom is genuine in its intentions to support female entrepreneurs and investors, she said. 

“We have a very strong commitment to developing female entrepreneurs and I think the market believes that commitment because they see a VC firm with two female partners who are just as well compensated, just as visible, just as competent as our two male partners. When we talk about our commitment to female entrepreneurs I think the market believes us and trusts us,” said Johnson.

The diversity also works well for the fund and its investors, with more gender-balanced management teams producing better results.

“I think the benefit of having a diverse team – and this can be women, this can be people of different races, people with different experiences – is that you have diversity of thought. If you have four people around the table with different experiences you’re able to make better decisions. And this is something where studies have been done, that show that funds with more balance in terms of gender perform better,” said Muforo.

The first case study in the series Diversity dividend: Female fund managers in Africa is available for free download here.