Is Venture Capital a Ponzi Scheme? feat. Grant Phillips of PhilTech Consulting
Joining me and guest co-host Rushil Vallabh of Secha Capital on this African Tech Roundup podcast is Grant Phillips. Grant is the Founder and CEO of PhilTech Consulting and has partnered with both Convergence Partners and Stockdale Street (the Oppenheimer Family’s South African private equity outfit) to “build out technology ecosystems across Africa”. He was previously the CEO and Chairman of the Nairobi-based credit reference bureau and debt management outsource organisation CRB Africa as well as CEO of TransUnion’s Pan-Africa business.
Listen in to hear Rushil, Grant and I unpack the provocative assertion that venture capital is a Ponzi scheme, recently made by the American-Sri Lankan Founder and CEO of Social Capital Chamath Palihapitiya. Click here if you’d like to skip straight to that discussion.
Chamath — a bona fide billionaire — was an early senior executive at Facebook. Following that, Chamath founded Social Capital which in its first 8 years, he claims, made double what Berkshire Hathaway made in its first 8 years of business. But now, apparently, he’s done with the limited partnership VC model and with running a successful hedge fund. Hence, he’s decided to reorganise Social Capital into a holding company that will pick investments on the basis of both solid business fundamentals and “value to humanity” — and offer investees all the finance and growth support they need to thrive.
Given media reports regarding Rocket Internet’s puzzling plans to exit their investment in the struggling online shopping platform Jumia via a stock exchange listing in the US, Africa’s early-stage investment ecosystem might do well to soberly reflect on Chamath’s controversial aversion to the VC model largely popularised by Silicon Valley.
First published in AfricanTechRoundup.com.
