Business Type: Registered venture capital companies invest in startups and early-stage businesses with high growth potential. They provide capital, expertise, and strategic guidance to portfolio companies in exchange for equity stakes. Venture capital companies play a critical role in fostering innovation, entrepreneurship, and economic growth by funding high-risk, high-reward ventures.
Licensing Requirements: Must be incorporated as a company, provide a detailed business plan and investment strategy, disclose governance structures and investment decision-making processes, have experienced management with proven track records in venture capital or private equity, meet capital requirements determined by the Authority, and demonstrate capacity to provide strategic support to portfolio companies.
Government Fees: Application fees are approximately KES 100,000, with annual renewal fees of around KES 60,000 to KES 80,000.
Timeline: The approval process typically takes 60 days, subject to the assessment of investment strategies, management expertise, and governance structures.
Limitations: Venture capital companies must disclose investment strategies and governance, invest primarily in early-stage businesses with growth potential, comply with reporting and disclosure requirements to the CMA and investors, avoid conflicts of interest, adhere to valuation and exit strategies, and maintain proper governance and risk management frameworks.
Penalties: Violations may result in license revocation, investor claims, fines, public censure, and prosecution for fraud or mismanagement.
Enforcement: The CMA conducts reporting and disclosure reviews, monitors investment activities and portfolio performance, ensures compliance with governance standards, and protects investor interests through regular oversight.