Ethiopian Startups Don’t Lack Capital—They Lack a VC Ecosystem

From what I’ve seen on the ground, there's a common myth circulating in Ethiopia’s entrepreneurial circles: “Ethiopian startups struggle because there’s no capital money.”

Let me make one thing clear: that’s not true.

The capital is here. It exists—sitting in banks, in private hands, and in global funds looking at Africa with growing interest. The problem, however, isn’t the absence of capital—it’s the absence of a real venture capital ecosystem that can connect those funds to the startups that need them.

Capital without connection is useless. A single check doesn’t make an ecosystem. A few scattered investments don’t drive innovation. A functioning venture capital ecosystem is about much more than just money. It requires mentorship, risk-tolerant investment, deal flow, early-stage faith, legal protections, co-founders, exits, LPs (limited partners), scouts, and local credibility. It’s a web of support that helps ideas go from concept to scalable, sustainable businesses.

In Ethiopia, that movement is still missing.
We don’t yet have the infrastructure to connect local capital to local founders. There are no solid networks of investors who trust homegrown innovation or are deeply embedded in the day-to-day hustle of our entrepreneurs. And because of that, startups often find themselves stuck in silos—pitching to the void, or looking abroad for funding, while the capital they need sits right down the road, unavailable or uninterested.

This is the fundamental gap in Ethiopia's startup ecosystem: a fragmented landscape where capital is plentiful, but the ecosystem required to unlock it simply doesn't exist.

When I tried to break into this space—humble and direct—I wasn’t asking for a favor. I wasn’t begging for handouts or special treatment. I was offering value. I said: “Let me into this room. Let me help make this circle more inclusive, more visionary, and more connected to the real needs on the ground.”

The reaction I received was eye-opening.
Some blocked me. Some laughed. Others pretended I never spoke. It didn’t hurt my feelings—it only confirmed my suspicion: they don’t see this ecosystem as something to build. They see it as something to guard.

There’s a reluctance to open up, to allow fresh perspectives to shape the future of Ethiopia’s venture capital space. And this is the very reason why the ecosystem remains stagnant.

Ethiopia’s future doesn’t depend on imported accelerators or donor-driven projects. It depends on building a locally-rooted, founder-first venture ecosystem—where smart capital meets brave ideas early and often. This isn’t a foreign concept; it’s one we can create right here, with the resources we already have. And it will be built by those of us who’ve been shut out because we know exactly what’s missing.

We’re done waiting. We’re designing our own VC playbook. We’re creating community funds, peer-led platforms, and a culture that embraces early-stage risk. We’re matching local solutions with local belief—and building a structure that believes in the potential of our own entrepreneurs.

Ethiopian startups do not lack capital. They lack the ecosystem to unlock it.

The question isn’t “Where’s the money?” The question is: “Where’s the structure? Where’s the trust? Where’s the collective will to fund our own future?”

We’re building that now. And we’re doing it differently.

In conclusion, the capital is here, but the structures and systems to make it flow effectively into local startups are not. It’s time to reframe the conversation. We don’t need to go abroad for answers—we have everything we need right here to build a thriving venture capital ecosystem. Now, it’s time to act.