What is the Fundo Activo de Capital de Risco Angolano (FACRA)?

O Fundo Activo de Capital de Risco Angolano is a Angolan Venture Capital Fund created by Presidential Decree 108-12 of June 7, focused on supporting the Micro, Small and Medium Enterprises (MSMEs) in the creation, innovation and expansion of businesses in Angola.

What is a Venture Capital Fund?

A Venture Capital fund is a fund provided by investors to businesses or start-up businesses with growth potential or in start-up phase. Venture capital is especially attractive for new or small businesses, because these businesses, due to their small size have difficulties in raising capital or are not able to secure a bank loan.

Investment in venture capital is usually carried out by taking a minority stake in the share capital of the company and usually lasts between 3 and 7 years, being limited by the settlement date of FACRA.

How does FACRA finance companies?

Funding by FACRA is accomplished through the Venture Capital mechanism, consisting, in general terms, of an amount provided to businesses start-ups or businesses with growth potential in return for taking a minority stake in their share capital.

What kind of businesses can submit an application to FACRA?

If the potential business project has at least 51% of its share capital held by Angolans, is classified as an MSME by INAPEM and falls within the target sectors of FACRA, the company has the opportunity to apply for capital support from FACRA.

Although there are documentation requirements that must be met prior to the approval of any financing, FACRA initiates the analysis process of a business plan as soon as it is submitted. The analysis includes: reviewing the background of promoters and management team, financial information of the company (if it already exists). These steps are necessary to ensure that the economic and financial potential of your enterprise and investment framework falls within the stipulated guidelines of FACRA.

What are the requirements for my MSME to be funded by FACRA?

For companies seeking funding, they must supply the following:
  • A business plan, with a 5-year growth strategy that includes earnings potential.
  • CVs of the promoters of the financing request and managerial team.
  • Presentation of the co-investment capacity of the promoters to invest in the project/company.
  • Qualification as a MSME under the law No.30 of September 13th 2011 and INAPEMs certification (already constituted company).
  • Statement that the company is in full operation

Which are the sectors of the economy where FACRA acts?

FACRA selects investments that have the potential to rapidly make it difficult for competitors to compete, through differentiation, branding, protection of patents, important contracts, know-how or ability to dominate the market.

FACRA is actively pursuing investment opportunities in most productive sectors of the economy that substitute importations and create qualified employment, with a special focus on the following priority clusters:

  • ICT Information and Communications Technology
  • Logistic solutions
  • Food transformation and production
  • Innovation in agriculture.

FACRA selects investments that have the potential to rapidly make it difficult for competitors to compete, through differentiation, branding, protection of patents, important contracts, know-how or ability to dominate the market.

FACRA is actively pursuing investment opportunities in the following priority sectors:

  •  Technology
  •  Agriculture
  • Biotechnology
  • Infrastructure development (school, hospitals, roads, logistics, off-grid energy and utilities)
  • Livestock

Does FACRA support the development of the idea and its Business Plan?

With unrivalled knowledge of the local Angolan market, FACRA’s deep insights enable it to grow Portfolio Companies by leveraging its vast network of trusted local partners. Examples of management support include helping to define strategic goals, financial structuring, international expansion and preparation for exit amongst others.

FACRA is always looking for a degree of differentiation that can form the basis for growth and ultimately increase the value of the company at the exit stage. In many cases, the Fund will invest together with an Angolan entrepreneur and adapt the business case towards a concept that has shown success internationally, thus ‘tropicalizing’ successful foreign products or services in order to ensure success within Angola.

The key factors for the submission of an investment project by its promoter consist of:

  •  Identifying a market opportunity;
  • Creating a business model that allows exploiting;
  • Adding of talent with the right skills for their management;
  • Raising the investment needed for its financing.

Does FACRA supports companies on a national level or only in Luanda?

FACRA supports setting up businesses across Angola. The key criteria to secure FACRA capital is that the potential business must have at least 51% of its share capital held by Angolans and should be certified as an MSME by INAPEM

How are projects selected for funding by FACRA?

The selection process includes: receipt of legal requirements, application for funding (MSMEs), evaluation of the application, decision-making process, funding and manager adjudication.

How do companies contact FACRA?

Businesses can reach FACRA via its email: info@facra-angola.com or through the following phone numbers:

T: (+ 244) 222 380 780 F: (+ 244) 222 321 626 M: (+ 244) 928 818 650

Does FACRA charge interest rates?

The funding which FACRA offers is different to bank financing, and thus no interest is paid. As with all VC’s, FACRA will take a minority stake in the Portfolio Company.

What is the average time between the receipt of applications and award funding?

The time it takes from application to final decision and the awarding of funding varies greatly depending upon a number of factors. These include:
  • The quality of the business plan (market research, SWOT analysis etc.)
  • Earnings potential and financial data
  • The size of the investment required
  • The practical nature of the business (as an example, a large-scale manufacturing business that depends on specific premises, equipment and skills may present the Committee with a greater number of considerations than a small financial consultancy)
  • The number of projects under review at the time of application will also impact the time it takes for the Committee to deal with your application

Can I be part of the FACRA team?

FACRA has a set management team in place. However if you are interested to join FACRA, you can send across your CV for future consideration. Should we deem your profile relevant one of the team members will be in touch.

Does FACRA stipulate a maximum value for funding application?

FACRA aims to invest in approximately 40-50 business projects over a period of 10 years. Each business will be considered on its own merits. Needless to say, a primary consideration will be the viability of the business as a going concern, its potential to succeed and the potential return for the Fund. As such, the investment guidelines do not stipulate a minimum or maximum capital sum.

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