Beyond the Funding Gap: Mobilising Domestic Capital Under Institutional Thinness: The Domestic Capital Flywheel (African Journal of Entrepreneurship Innovation and Development Research)

Summary

• Africa attracts less than 1 percent of global venture capital, with more than 80 percent concentrated in just four countries.p.2
• Tanzania recorded more than 100 startup transactions between 2019 and 2026 despite shallow domestic early-stage investment.p.2
• The study's qualitative methodology analyzed a primary dataset of 23 in-depth interview records across ecosystem actors.p.8
• Women represented 40% (n = 8) of the investor training cohort, matching the qualitative sample split of 40% (n = 4) female participants.p.7
• An iterative thematic analysis yielded 96 source evidence extracts across the 23 interview records.p.9
• The overall evidence base combines 23 interview records and 3 secondary documentary reports for a total pool of 26 sources.p.8

Key insights

1. Limited early-stage investment under institutional thinness is driven by mobilization and coordination challenges rather than capital scarcity alone.p.1
2. Domestic capital mobilization is an endogenous outcome of entrepreneurial ecosystem development rather than a pre-existing input.p.3
3. International venture capital in Africa concentrates heavily in primary hubs and later growth stages, leaving early-stage ventures undercapitalised.p.4
4. Matching finance and capital stacking serve primarily as behavioral de-risking mechanisms for first-time domestic angel investors.p.15
5. Syndication allows angel investors to aggregate small ticket sizes while sharing due diligence and deal execution responsibilities.p.16
6. Intermediary organizations act as critical market infrastructure necessary to sustain investor engagement and post-investment lifecycle monitoring.p.17
7. Regulatory frameworks designed for traditional brick-and-mortar businesses introduce institutional friction for early-stage digital platforms.p.18