When Traditional VC Falls Short: Insights from "Rethinking Venture Capital for the African Market"

A recently released white paper, Rethinking Venture Capital for the African Market, makes an argument that resonates deeply with our work at Artesian: the Silicon Valley playbook for venture capital simply doesn’t translate to operationally intensive, real-economy sectors.

What’s striking is how closely the paper’s conclusions align with the structural problems we’ve been designing around for years. The mismatch between traditional VC and sectors like agrifood, health, mining, defence, and climate isn’t a regional quirk - it’s a fundamental design flaw in how the industry has approached these sectors globally.

We built our Integrated Venture Capital-as-a-Service (VCaaS) model precisely because we saw these dynamics emerging repeatedly. The white paper articulates the theory; we’ve been building the practice.

The Silicon Valley model wasn’t built for this

At the heart of the paper is a critique we strongly share: traditional VC was created for software businesses with low marginal costs, rapid iteration cycles, and winner-take-all market dynamics. Transpose that model into agriculture, healthcare, critical infrastructure, or climate technology, and it breaks. These sectors operate with longer build cycles, physical-digital complexity, regulated pathways, and value chains that require coordination across multiple actors.

This isn’t about emerging markets being “harder.” It’s about acknowledging that real-economy sectors operate on different physics. They demand patient capital, deeper engagement, and strategic integration - far beyond what a short-cycle, equity-only model was ever designed to provide.

Patient capital isn’t just a timeline challenge - it’s a relationship challenge

The paper calls for 13–15 year funds, evergreen vehicles, and holding-company structures. We agree, but the real insight is subtler: patient capital only works when investors are truly aligned with long-term value creation rather than marking up portfolios to raise the next fund.

This is why VCaaS is structured around long-horizon alignment with corporates and government partners who are not chasing short-term returns. They are building capability, shaping ecosystems, and driving industry transformation. Capital timelines must match business timelines, but incentives must match sector realities.

Beyond equity: capital structures that reflect operational reality

One of the white paper’s sharpest observations is that many real-economy ventures don’t primarily need equity. They need working capital, asset financing, revenue-linked instruments, blended facilities, and structures that track operational behaviour - not just valuation.

VCaaS embodies this thinking in practice. It’s not an equity-only model; it integrates strategic pilots, corporate adoption, government co-funding, and later-stage corporate capital. Forcing equity into every situation produces distortion. Fit-for-purpose capital isn’t optional - it’s essential.

Ecosystems, not portfolios

The most profound shift the paper argues for is moving from portfolio thinking to ecosystem thinking. In many sectors, talent pipelines are thin, infrastructure is incomplete, and adoption requires coordinated industry-wide activity. Investment alone cannot solve this; the surrounding architecture must be built.

This is where our approach diverges most sharply from traditional VC. VCaaS integrates industry groups, corporates, founders, universities, producers, regulators, and government agencies into a single operating system for sector transformation. We don’t invest in companies and hope an ecosystem emerges - we build the ecosystem and invest within it.

Corporates as strategic partners, not cheque writers

The paper highlights the critical role corporates play in validation, distribution, adoption, and exit pathways. This is exactly the structural logic of VCaaS. Artesian provides investment governance and portfolio execution; corporates provide commercial pathways, strategic insight, and eventual acquisition routes.

The governance tensions the paper notes are real - we’ve spent years designing structures that maintain investment discipline while enabling deep strategic alignment.

Exit engineering as an active discipline

The white paper rightly argues that exits must be engineered, not awaited. Strategic buyers must be curated, commercial fit must be shaped early, and continuation or secondary structures must be planned.

We take this further: exit engineering should begin at investment. In VCaaS, being embedded within the strategic ecosystem means commercial pathways are visible early - not speculative.

Sector-specific models, not universal templates

The white paper concludes that no single VC structure can serve all complex sectors. Each requires its own configuration.

This mirrors our model expansion strategy: prove VCaaS in agrifood, then adapt and replicate into health, mining, climate, and beyond.

The integrated model travels; each sector-specific buildout evolves.

Where this leads

The white paper arrives - independently - at the same conceptual foundations we’ve been building on:

• Traditional VC does not work in operationally intensive, strategically important sectors.

• Capital must be patient, strategic, and aligned with sector timelines.

• Corporates and institutions must be integrated as active ecosystem participants, not passive LPs.

• Investment must pair with ecosystem architecture, capability development, and commercial adoption.

• Hybrid capital structures and active exit engineering are essential.

For us, the paper is both validation and invitation. The rethink it describes isn’t theoretical — it’s already underway. The question for corporates, governments, and institutions is whether to wait for the industry to catch up, or to engage now with models built for the sectors that matter most.