This document provides a more detailed background on our programme selection process.
The Foundation is not obliged to release this proprietary information, but we have decided to do so as a testament to our transparency standards. The Foundation further reserves the rights to vary our selection process as we deem fit.
Background to the Tony Elumelu Foundation
- • The Tony Elumelu Foundation is the leading philanthropy empowering a new generation of African entrepreneurs, driving poverty eradication, catalysing job creation across all 54 African countries, and increasing women economic empowerment.
- • Since the launch of the TEF Entrepreneurship Programme in 2015, the Foundation has provided access to business management training to 2.5million young Africans on its digital hub, TEFConectar, and disbursed over USD$100 million in direct funding to 21,000 African women and men, who have collectively created up to 1.5million direct and indirect jobs and generated USD$4.2 billion in revenue,
- • The Foundation’s mission is rooted in Africapitalism, which positions the private sector, and most importantly entrepreneurs, as the catalyst for the social and economic development of the African continent.
Benefits from the TEF Entrepreneurship Programme extend beyond the seed capital, successful applicants receive support from the Foundation through:
- • Access to the TEF enterprise development toolkit
- • Business relevant training
- • Mentoring and coaching
- • Professional networking
- • Business Plan Development
- • A developmental programme that enhances entrepreneurial capacity to successfully nurture ideas to fruition
Our Approach to Selection
Hundreds of thousands of applications from young aspiring African entrepreneurs are received annually to TEF programmes. From the outset to guard against conflicts of interest, in all programmes, TEF has outsourced shortlisting to professional service firms.
The Foundation engages reputable and credible third-party consulting firms for the independent end-end review of all applications and selection of successful entrepreneurs.
This TEF institutionalised selection process is in line with global best practice and ensures that the evaluation and shortlisting is transparent, credible and rigorous, with the topmost quality assurance.
Since 2023, the Foundation has appointed Ernst & Young (EY) to anchor the selection process for TEF Entrepreneurship Programme. Successful applicants receive business management training, and personalised business plan support from EY ahead of receiving the TEF non-returnable seed capital of USD$5,000.
Previous consulting firms engaged for the selection process since the inception of the TEF Entrepreneurship Programme include Accenture and Deloitte.
The TEF Entrepreneurship Programme proprietary selection process is summarised:
Criterion: Feasibility
• Unique, original, innovative • Jobs, wealth creation potential • Sustainable, commercially viableWeight
20%
What this means to us
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• Has this entrepreneur defined the features and benefits of his/her product/service?
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• Is this business solving a problem in a new way that could lead to improved efficiencies, benefits to customers, etc.?
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• Is this business tapping into a new market that no one else has been able to reach or solving a problem no one else has addressed?
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• Is this business practical – will people be willing to pay for this product or service?
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• Does this business have the capacity to create jobs for up to 10 people?
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• Has this entrepreneur aligned their business to at least one Sustainable Development Goal?
Criterion: Market Opportunity
• Clear and apparent from the evaluator’s perspective • Applicant understands market, customers, competitive & regulatory landscapeWeight
25%
What this means to us
-
• Has this entrepreneur defined the target market or market segments for his/her product/service?
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• Is the market for this product/service sizeable enough to justify investment in this business?
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• Has this entrepreneur set price?
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• Has this entrepreneur sufficiently described how his/her business will generate income, and earn profits?
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• Has this entrepreneur provided a workable marketing or advertising strategy for his/her product/service?
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• Has this entrepreneur positioned his/her product/service favorably against competitors?
Criterion: Financial Understanding
• Basic financial understanding of revenue streams, cost drivers, and financing needsWeight
10%
What this means to us
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• Is the financial forecast for this business realistic/based on reasonable assumptions?
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• Does the logic for making money (revenue) in this business add up?
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• Based on the type of business identified, does the current expense reflect all the possible operating costs associated with running this business?
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• Does the break-even revenue/volume reflect the time value of the invested cash/cash to be invested, given the price of the product involved?
Criterion: Scalability
• Potential to replicate across community, regional, national and continentalWeight
30%
What this means to us
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• Can this business model/idea be replicated outside this entrepreneur’s immediate community/current market?
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• Will this business be able to surmount cultural barriers to enable it to expand to other geographies within Africa?
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• Will this business be able to surmount legal/regulatory barriers to enable it to expand to other geographies within Africa?
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• Will this business have adequate access to raw materials (if applicable) or critical skills if it decides to expand beyond its current market?
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• Will this business be able to multiply its revenue (increase production, service lines, etc.) while keeping expenses as low as possible?
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• Are there opportunities for this business to use automation (technology) to improve margins and reduce operational costs?
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• Has this entrepreneur demonstrated a desire to scale his/her capability?
Criterion: Leadership & Entrepreneurial Skills
• Passion and commitment • Previous accomplishments with respect to mobilizing people and resources • Experience and technical expertiseWeight
15%
What this means to us
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• Has this entrepreneur demonstrated the ability to influence, lead or motivate people in any capacity?
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• Has this entrepreneur demonstrated ability to manage resources (time, money, materials)?
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• Is this entrepreneur’s desired impact in line with the TEF’s goal of increasing jobs, building businesses and creating wealth across Africa?
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• Do the outlined business challenges show a true understanding of the industry this entrepreneur is operating in?
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• Has this entrepreneur honestly identified his/her skill gaps as areas to learn about?
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• Are the current and next milestones demonstrative of a desire for accelerated but realistic progress of his/her business?
All entrepreneur applications are scored and ranked in line with TEF’s proprietary guidelines:
Score Band: 90-100
Ranking
Very High
Scoring standard
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• Business or idea is a game changing one, very innovative, and meets the 3 criteria below:
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• Sound and well-articulated revenue model
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• Sound and well-articulated marketing model (target market, competition, product differentiation)
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• Clearly demonstrated leadership skills and experience of applicant
Score Band: 80-89
Ranking
High
Scoring standard
-
• Business or idea is a game changing one, very innovative, and meets the 3 criteria below:
Score Band: 70-79
Ranking
Medium High
Scoring standard
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• Business is a regular entrepreneurship (teaching, tutoring, farming, sales, fashion design, etc.) that has a well-articulated revenue model and marketing model, and in which the leadership/entrepreneurship skills of applicants are clearly demonstrated (meets all 3 criteria) OR
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• Business is a game-changing one that has not articulated a sound revenue model, sound marketing model or demonstrated the applicant’s leadership & entrepreneurship abilities (missing 2 of the 3 criteria)
Score Band: 60-69
Ranking
MEDIUM LOW BAND 1
Scoring standard
-
• Business is a regular entrepreneurship (similar to 70-79% bracket), but has either not articulated a sound revenue model or marketing model, or demonstrated the applicant's leadership & entrepreneurship abilities (missing 1 of the 3 criteria)
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• Business is a game-changing one that has not articulated a sound revenue model, a sound marketing model or demonstrated the applicant’s leadership & entrepreneurship abilities (missing all of the 3 criteria)
Score Band: 50-59
Ranking
MEDIUM LOW BAND 2
Scoring standard
-
• Business is a regular entrepreneurship, but application had severe information gaps or displayed poor familiarity of applicant with industry
Score Band: 31-49
Ranking
LOW
Scoring standard
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• Generic business with insufficient information to justify the need for investment or applicant's familiarity with the industry.
Score Band: 0-30
Ranking
VERY LOW
Scoring standard
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• Applicant was incoherent – it was difficult to understand what the business idea was about
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• Applicant left key information fields blank
Each application is screened across three level reviews for thoroughness. The results are further validated by EY Quality Assurance experts ahead of the final selection of candidates. At each stage, a high level application summary report documenting the scope, criteria, methodology and results is produced.
In 2019, the Foundation modified its implementation model to further democratise luck and give thousands of additional entrepreneurs access to its training programme. The change moved the final selection of entrepreneurs to post-training and after the successful submission of the below standard due diligence documents:
- 1. An original government-approved ID card
- 2. Business Registration Document/ Certificate
- 3. A notarized document
- 4. Bank reference letter
- 5. Tax certificate
- 6. Partner’s Consent form
- 7. Fund use and milestone tool<br><br>
Focus on 2023
Given spikes in cost of business registration and notarisation of documents for entrepreneurs, in 2023, we realized this approach did raise considerable barriers and bureaucracy, and the Foundation reverted to its original model of selection immediately following the close of the application phase.
This reversal ensured that only selected successful entrepreneurs eligible for the non-returnable seed capital of USD$5,000 had to register their businesses, notarise documents, or open business bank accounts.
We are working currently to use AI to improve further our application and training process.
Application and participation in the Tony Elumelu Entrepreneurship Programme (the “Programme”) is governed by the Terms and Conditions of the Programme, which can be found here LINK.
For additional information on our TEF selection process, please email enquiries@tonyelumelufoundation.org.
