AFRICA DOESN'T HAVE A STARTUP PROBLEM, IT HAS A PROBLEM OF TRUST

Venture capital (VC) firms only back founders they trust.

- By Colin Iles

And why not? When you're putting millions of dollars into a venture, you can do as much analysis as you like—but in the end, one question decides where the money goes: Do you trust the founders?

This isn't to say product market fit, scalability, uniqueness, timing, and exit-ability aren't important. But time and again, when you ask top investors what drew them to their latest unicorn successes, the answer is almost always the same—they didn't just like the product; they loved the founders.

And since most major investment firms are made up of men from similar backgrounds, it shouldn't be surprising that they find it easier to 'trust' people who kind of look like, sound like, and act like them—and who match the profiles of founders from previous rounds of success.

This bias—or pattern matching, if we're being polite—leads to a feedback loop where “Stanford engineer, ex-Googler, White male” become a shortcut for trust.

And it's perhaps this loop that allowed the likes of Mark Zuckerberg (Harvard), Sergey Brin (Stanford), and Jeff Bezos (Princeton) to find the funding they needed to build the Metas, Googles, and Amazons of the world.