In the interplay between conceptualization and institutional capital, judgment is key. By the time one enters the venture capital stage, critical asymmetrical advantages (types of knowledge) are often already held by those who got involved earlier.
However, merely getting in early is not enough, as there are many misleading signals in early investments in Africa: strong narratives lacking revenue, technical teams without business discipline, large markets with no credible entry paths, and founders who confuse activity with progress. The real challenge lies not in finding investment opportunities, but in filtering valuable information in an environment where signals have yet to take shape.
This is where the POEM framework comes into play.
The POEM framework, designed by Tomi Davies, is a four-part filter aimed at eliminating ambiguity and revealing structural weaknesses, allowing for in-depth assessments before capital is deployed.
Each component poses questions that founders are often reluctant to answer.
Why Africa Needs Different Filters
Many investors fail in Africa not due to a lack of intelligence, but because they apply frameworks from mature markets to Africa without considering the specific context. In an environment where signals are still forming, they seek clear signals.
What appears chaotic is often just a manifestation of early market formation. Informality can sometimes be a way for markets to operate before systems are fully developed, and it is not always a flaw.
Those businesses that seem structurally sound often lack the critical element needed to survive in tough environments: rigorous execution.
The Infrastructure Argument
Without this layer, the investment pipeline will break before reaching venture capital scale.
“Investors will continue to hesitate until these systems mature, and founders will be unable to realize their potential,” Tomi Davies explains.
The angel investment infrastructure is a key factor hindering places that seem to have demographic dividends from achieving economic output.
Taking Nigeria as a case study, the young population lacks the systems needed to translate vitality into enterprise value. The challenge is not in finding talent, but in establishing mechanisms that allow talent to scale.
Areas Where the Market is Still Mispriced
After years of filtering deals through POEM and building angel investment infrastructure in Africa, Tomi Davies clearly sees which aspects remain undervalued. Rigorous execution tops the list; founders who can generate early revenue in tough environments are still not given enough attention by the market.
Local knowledge and the networks of diaspora that connect capital with context also face undervaluation issues.
The market's failure to correct this issue stems from weak feedback loops, dispersed capital, and a lack of standardized signals. Models take time to manifest, and confidence needs to be built, which means those who are striving...