​How Funding Works in Ethiopia
Research in Cooperation With
Hello
I am Hannes...
... as an MSc student at the University of Amsterdam and the Free University of Amsterdam, I wrote my master’s thesis about how funding works in Ethiopia. I am passionate about fostering entrepreneurship, believing that businesses can be a vehicle for change, solving important challenges we face today!
I am keen to connect. Find my research and resume here.
Research
This thesis finds that context, funding partners, and entrepreneurs influence each other and how funding is achieved within Ethiopia. Overall, this thesis sheds light on different funding practices that entrepreneurs and funding partners use within the Ethiopian context: The thesis finds that local entrepreneurs build strong relationships with investors as early-stage funding is often based on trust, that investors and entrepreneurs are active in building political connections to overcome institutional voids and further that entrepreneurs are incorporating their business abroad, as a practice to attract foreign investors. Overall, it can be noted that there is a funding gap within the Ethiopian ecosystem, and only a few entrepreneurs can grow their businesses sufficiently to be attractive for the few investors operating within Ethiopia.
To move Ethiopia to a middle income country, it is an essential question to understand how businesses gain funding. Although it is known that funding partners and entrepreneurs face common challenges, the best practices of how entrepreneurs and funding partners engage with each other and what kind of strategies they use are less known.
This research sheds light on two sides of the same coin: on the one side, it supports funding partners in understanding how to engage and find the right entrepreneurs, and on the other side, it helps entrepreneurs understand strategies about how to gain investment.