Enormous opportunities abound in Africa, and investors are poised to act. As a recent McKinsey report states, by 2025 Africa will see US $5.6 trillion in consumer and business spending, and manufacturing growth across the continent will double. There are currently 400 companies across Africa valued at US $1 billion or over.

These headlines are exciting, however they often ignore the complex reality on the ground.

The impact investment world is enthralled with the Silicon Valley model of growth for Africa. Every month a new venture fund is established looking for enterprises with exponential growth and also social impact. In any market these ‘unicorns’ are few and far between and that’s especially true in Africa due to constraints in scaling and exiting. While this model has enabled some investors to benefit enormously it can be argued that its ‘winner takes all’ approach has led to monopolies and widened inequalities.

At TBN our experience tells us that rather than spending time ‘unicorn hunting,’ investors should push founders to raise ‘oxen’ - profitable, sustainable, and locally-adapted businesses. These businesses aren’t often suitable for venture capital but will require instruments and financing structures tailored to African ventures. Investors will need to be creative - activists who can build the ecosystem and attract more capital and resources. Raising ‘oxen’ isn’t always glamorous but these businesses can deliver steady returns and will create the broad-based, sustainable economic growth that Africa needs to lift it out of poverty.

Our recent conference in Austin, Texas brought together investors interested in transforming lives in emerging and frontier markets. The clear consensus from our discussions was that, although the capital is plentiful, it will require real wisdom to deploy it in a way that benefits both Africa and protects the investor.