“Where liquidity is scarce, you cannot wait for it to arrive. You have to create it.”
Liquidity is becoming the credibility test for African venture capital. Launch Africa Ventures recently returned approximately US$2.5 million to limited partners in Seed Fund I after 11 cash exits, equal to a distributed-to-paid-in-capital (DPI) ratio of about 7%. The distribution is meaningful for how the cash was generated: through a mix of secondary sales, strategic transactions, and management buybacks across several markets and sectors, without relying on a portfolio IPO.
Natnael Asmerom sits close to both sides of that equation. After seven years at Goldman Sachs, where he worked on portfolio construction and risk management for high-net-worth individuals and family offices, he joined Launch Africa Ventures to lead investor relations. Based in Dubai, he is also the firm’s first dedicated representative in the Middle East, connecting African founders with capital, commercial partners, and potential buyers across the Gulf.
In this conversation, Startup Researcher explored what the 7% DPI milestone reveals about liquidity in African venture capital, why second- and third-quartile assets can still attract buyers, when selling a top performer may make sense, and how Launch Africa manages a portfolio of more than 180 companies while maintaining meaningful founder support. We also discussed why the firm views the Gulf-Africa corridor as a long-term strategic relationship, even amid short-term uncertainty.
From portfolio construction to African venture
You left a role you enjoyed at Goldman Sachs. Why move from private wealth portfolio management into African venture capital?
I wanted the trajectory of my career to become more impact-oriented. There are few places in finance where you are investing directly in someone else’s ambition and helping them realize it. That is what drew me to venture capital. I valued my time at Goldman Sachs - the people, the training, the discipline - so this was not a decision made against something. It was a decision made toward something.
Africa was both a personal and an investment decision. I am of Eritrean heritage, so the connection is direct. But the allocation case stands on its own. Africa remains structurally underrepresented in global venture portfolios relative to its demographics, urbanization, and the scale of unmet demand across financial services, logistics, healthcare and other essential sectors. Innovation here tends to come from necessity rather than privilege. For an allocator, the case should not rest on impact alone. It is a question of diversification, and of the risk-adjusted returns available in markets that global portfolios systematically overlook.
Which skills from Goldman Sachs transferred most directly into your role at Launch Africa?
My previous role required me to understand an investment product from both the top down and the bottom up, and then explain precisely where it belonged in a client’s broader portfolio. I spent a great deal of time constructing and optimizing portfolios for sophisticated high-net-worth individuals and family offices. That experience is directly transferable, because a large share of our investor base thinks in exactly that language: risk, performance, liquidity, portfolio fit, and time horizon.
When I speak with a prospective investor, I can frame African venture as one component of a holistic portfolio rather than as an isolated or purely impact-driven allocation. The asset class requires conviction. It should also withstand the same portfolio-construction discipline as any other product on the shelf.
Engineering liquidity in an illiquid market
Seed Fund I distributed approximately US$2.5 million, or about 7% of paid-in capital, following 11 cash exits. Does a 7% DPI prove that African venture capital has become liquid?
No. African venture capital remains illiquid, and a single distribution does not change that. What is more instructive is the process behind the number. The cash exits came through secondary sales, strategic and trade transactions, and management buybacks. They covered different sectors and markets, and none depended on a portfolio IPO. It is also worth placing the figure in context rather than grading it on a regional curve. Carta’s Q4 2025 dataset covers 2,904 US venture funds. For the 2020 vintage - our vintage - median DPI is 0.01x and the 75th percentile is 0.09x. We are at approximately 0.07x. A frontier-market seed fund sitting just outside the top quartile of US funds of identical vintage is not the outcome most allocators expect when they look at Africa.
None of that means the liquidity problem has been solved. It suggests that institutional secondaries and other non-IPO routes are more available than they were five years ago, and that liquidity can be actively created when a manager has the relationships, the internal process, and the willingness to work transactions that take months to complete.
You said that in a market like Africa, a fund sometimes has to create the liquidity itself. What does that mean in practice?
It means you cannot simply wait for the ideal acquirer, or for an IPO window that may not open. An exit process can take anywhere from 6 to 18 months. It requires an internal process, continuous engagement with potential buyers, realistic pricing, and constant coordination among the fund, the company, its founders, and other shareholders. Across a portfolio of our size, that has to operate as a machine rather than as a series of one-off reactions. We resource it accordingly: a dedicated portfolio manager for exits, a support team, and a formal Exit Committee that determines which positions to realize, on what timeline, and through which channel.
It also means building transfer pathways that do not depend entirely on the company’s next priced fundraising round. We developed a proprietary instrument, the Launch Africa SAFE Purchase Agreement, to transfer SAFE positions between funds - in whole or in part - without forcing conversion into preferred equity. It now sits behind roughly half of our cash exits. At the same time, we are founder-first. A buyer is not only a source of liquidity for us. We also ask whether that buyer can be a useful partner for the company as it enters its next stage, whether through commercial relationships, regional expansion, or later-stage capital.
Launch Africa ranks its portfolio by quartiles. Why would a buyer knowingly acquire a company from the second or third quartiles?
A quartile ranking describes fit within our portfolio at a particular point in the fund’s life. It is not a verdict on the company. We use proprietary metrics and benchmarks informed by the large volume of deal and operating data we see across the continent. That helps us compare companies within subsectors and assess their performance consistently, but a buyer will have its own thesis, time horizon, geographic priorities, and ability to add value.
A company outside our top quartile can be a core asset to a strategic buyer, another fund, a corporate, or its own management team. It may simply belong in their portfolio more than in ours at this stage of our fund. Every counterparty underwrites independently and reaches its own view. Our work is to identify the party whose conviction, strategic fit, and price support a transaction that also makes sense for the founders and the fund.
Have you ever sold a top-performing company because the price or timing was compelling?
Yes. We assess case scenarios for a company’s future, then weigh that potential against the price available today and the remaining life of the fund. There are also situations where an oversubscribed round creates an opportunity for an early investor to take a partial exit, sometimes at the founder’s request.
A top performer is not automatically an asset that must be held indefinitely. If the multiple on offer adequately compensates the fund for the upside it is foregoing, or if a partial sale returns capital while preserving meaningful exposure, selling is the disciplined decision. The right answer depends on price, timing, fund maturity, and what best serves the company’s next stage.
How do you pursue DPI without sacrificing too much future upside?
The trade-off is real. A manager can force exits, but selling at the wrong price buys short-term DPI at the expense of long-term value. At the other extreme, strong paper marks do nothing for investors if they are never converted into cash.
The discipline is to assess the credible upside, the additional holding period required, the quality of the buyer, and whether a partial exit can balance liquidity against continued exposure. The objective is not to maximize the number of exits, or any single metric at a single point in time. It is to optimize realized returns over the life of the fund, avoiding both permanent illiquidity and value-destructive sales.
Turning a broad LP base into smart capital
Launch Africa now has more than 400 investors across more than 45 countries. Is that a strategic strength or a workaround for limited institutional capital?
Our investor community is one of our strongest propositions, and I'd push back on the idea that breadth and institutional quality are a trade-off. A 400-plus investor base across 45 countries is not a workaround for scale - it is a distribution network, an origination channel, and an exit network that most institutional vehicles simply cannot assemble. Our base is predominantly sophisticated high-net-worth individuals and family offices, many of them operators and entrepreneurs in their own right, alongside institutions, corporates, and other professional investors - and we are actively deepening the institutional side.
Institutions bring scale, longer horizons, and extensive corporate networks. Individual investors with deep personal and professional connections bring advocacy, access, and speed. I would be cautious about treating investor category as a proxy for investor value. What matters is alignment, engagement, and what an investor contributes beyond the commitment itself: a customer introduction, an acquirer relationship, credibility in a market we are entering. We want both, and we are building both.
How does co-investment fit into that model?
Fund I raised approximately US$36 million and invested in 133 companies, which meant our initial tickets were deliberately spread across a broad portfolio. Fund capital alone could not support every attractive follow-on round. Our investor community filled that gap, investing approximately US$18.5 million directly across just over 50 portfolio companies.
Those opportunities allow investors to express their own conviction after following a company’s progress through our reporting. We negotiate the transaction and open participation to eligible investors without charging management fees or carried interest on the direct co-investment. The purpose is to bring more smart capital into the companies, not to expand the fee base. It also makes investor communication actionable: an investor moves from following a company to funding its next stage.
Making a large portfolio high touch
Launch Africa currently manages over 180 companies across its two funds. Can support at that scale genuinely be high touch?
It can only work with a coverage model. Members of the portfolio-management team and the wider firm each take responsibility for a focused group of companies, typically around 10 to 12. That person becomes the founder’s principal point of contact, maintains frequent touchpoints, and supports fundraising, business development, partnerships, and other requests. Where a situation requires the general partners or another specialist, we have an escalation process.
No individual can singlehandedly hold the in-depth knowledge of more than 180 companies across sixteen sectors. Distributed coverage allows each relationship owner to understand the economics and operating realities of a smaller group, while the broader team contributes its networks and expertise. We also encourage founder-to-founder support through a community forum, so that value does not flow only from the fund to the portfolio. High touch at scale has to be an operating model, not a marketing claim.
Building a structural Gulf-Africa corridor
Why does Launch Africa describe the Gulf-Africa corridor as structural rather than opportunistic?
Because the relationship runs on real commercial rails. Trade between the Gulf and Africa is largely intermediated through Dubai. Payments, remittances, and newer settlement infrastructure are built on those flows, while logistics and mobility sit on the physical side of the same corridor. Those sectors are also among the deepest parts of our portfolio.
A dedicated presence in Dubai serves three purposes. It keeps us close to current and prospective investors, allows us to support portfolio companies entering the region, and keeps us connected to local investment and partnership opportunities. The opportunity is not limited to raising capital from the Gulf. It includes distribution, corporate partnerships, market entry, and, over time, potential strategic buyers for African technology companies.
Has recent regional uncertainty weakened that investment case?
It has lengthened decision-making timelines rather than changed conviction. Investors with significant regional exposure become more deliberate about new deployment when uncertainty rises. That is a timing constraint. It does not alter the structural logic of the corridor.
The region is relationship-driven, and consistency matters most when conditions are difficult. We continue to meet investors in person, support founders operating in the region, and work with local ecosystem partners. Connecting the Gulf not only with North Africa but also with sub-Saharan Africa is a multi-year undertaking. You cannot appear only when fundraising conditions are favorable.
What should Gulf investors and corporates contribute beyond capital?
The most valuable partners open commercial doors, help a company enter a new market, connect it with local banks, insurers, telcos, or supply-chain partners, and may participate in future liquidity. Capital is one layer of the relationship. Market access and strategic relevance are what turn it into smart capital.
For founders, the corridor becomes valuable when it helps them sell, partner, expand, and eventually attract the right next investor or buyer. For the fund, those same relationships strengthen both portfolio support and exit optionality. That is why a permanent regional presence matters more than occasional fundraising trips.
The metrics that should decide the verdict
If we speak again in two years, which metrics should determine whether Launch Africa’s model worked?
Two. Whether we raised the right capital, and whether we returned cash. On the first, the question is not only where the fund ultimately closed, but whether we brought in an investor base aligned with the strategy and additive to the portfolio. On exits, the test is not how many exits we recorded or how high the paper marks became. It is the DPI: how much cash did we return to investors relative to the capital they paid in?
Those are the two questions most venture managers should be judged against. It is relatively easy to talk about opportunity, impact, and portfolio potential. The harder test is whether you can raise aligned capital, deploy it responsibly, and then return it. That is where the accountability belongs.