Why Government Should Put More Effort In Angel Investment In Nigeria.
In the last article, we discussed the role angel investors play in driving innovation and economic growth across borders; one being that they serve as the main source of local investments for early-stage businesses. If this is the case, then the government needs to be more involved. They need to pay more attention to the contributory effect of angel investors to nation-building. More importantly, they need to support angel investors so they can create more value and capital to the nation.
The number of angel investors in Nigeria is on the rise and we believe that Government support in the following two ways will amplify some of their advantages:
- Promoting Angel Investor Education: Masterclasses, Seminars and workshops are effective ways of educating the general public about angel investing. Education of this sort will boost confidence in investors and encourage more investment activities. They can help prospective angel investors learn about the intricacies of angel investing and provide current investors with a better understanding of equity investments, which can, in turn, help them make more informed investment decisions. The government can partner with accredited angel investors like Rising Tide Africa to offer this education either for free or at a subsidized rate.
- Promoting Entrepreneur Education: We believe that one of the best ways to promote angel investing is to improve the quality of existing early-stage businesses. Without entrepreneurs, there would be no start-ups to invest in. More so, investors tend to be attracted towards high potential businesses, hence the need to empower businesses to be so. One way the government can go about this to do this is to increase entrepreneurs access to information and education which can provide them with resources and skills needed to successfully run a business; such as developing effective business strategies, understanding their markets and financial models, amongst others. The government can either set up regular training programs or partner with accredited angel investors to run such programs on their behalf.
The government can also provide financial incentives (in form of government grants) and non-financial incentives such as tax exemptions on expenditure relating to innovative activities or R&D. They can facilitate the establishment of formal angel networks across each state in the country where current and potential investors can be accredited. They can also have a proper structure in place (for example, data collection and analysis on angel investing activities) to monitor and evaluate the impact of angel investing in the economy. We believe that the increased availability of data about angel investing will attract more growth and opportunities in the angel investing space.