The Complete Framework for Diaspora Investment in African SMEs

After years of trial, error, and iteration, here's the exact framework I use for evaluating and investing in African SMEs.

The 5-Filter Framework

Every potential investment goes through these five filters:

Filter 1: Market Timing

Is the market ready for this solution?

Are there signs of organic demand?

What's the regulatory environment?

Filter 2: Team Quality

Does the founder have relevant experience?

Have they built anything before?

Can they execute without hand-holding?

Filter 3: Unit Economics

Is each transaction profitable?

What's the customer acquisition cost?

What's the lifetime value?

Filter 4: Scalability

Can this work across multiple markets?

Are there network effects?

What are the expansion costs?

Filter 5: Impact Potential

How many jobs will this create?

What's the GDP contribution potential?

Does this align with African development goals?

The Investment Process

1. **Source** - Pipeline from Bvester network

2. **Screen** - Apply 5-filter framework

3. **Diligence** - Deep dive on finalists

4. **Negotiate** - Structure terms

5. **Support** - Active post-investment help

Common Mistakes to Avoid

Investing based on emotion alone

Ignoring currency risk

Underestimating operational challenges

Over-diversifying too early

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