Matt and Laura Davis run Renew Strategies, a small D.C. financial firm that invests in startup companies in Africa. (Ricky Carioti/The Washington Post)

Thriving businesses — and the profits, jobs, dividends and philanthropy that accompany them — build productive societies.

Matthew Davis is trying to do just that in Africa.

The physicist-turned-entrepreneur runs a small, Washington-based investment firm that is channeling money into African businesses, hoping to scale companies, instill the profit motive and create jobs — all while making money for his investors.

“This is Capitalism 101,” he said. “If you do it well, you can lift yourself out of poverty.”

The 35-year-old Washingtonian founded and is chief executive of Renew Strategies, which manages a network of angel investors who want to make money while doing good.

Davis claims he has created 500 jobs through his investment vehicle.

Its portfolio includes three Ethio­pian firms:

●dVentus, which develops energy-efficient technology for use in Ethiopian utilities and beyond.

●Metad, a crop-to-cup coffee company that helps boost coffee exports and increases farmers’ profits.

●Mama Fresh Injera, the largest commercial maker and exporter of fresh-baked injera, the flatbread that is an Ethio­pian staple. Renew is helping the firm triple its daily production.s

Renew isn’t big. It has only 10 employees, five in Washington and the rest in Addis Ababa, Ethi­o­pia. Davis and his wife, Laura, have raised $2 million from about 35 families, most of whom live on the U.S. East Coast.

The average angel commits about $50,000 to each company. Renew tends to invest $300,000 to $500,000 in a company, so it needs multiple angels to invest.

“Every month, I introduce our angels to companies we are looking at,” Davis said. “They come on trips. It’s like ‘Shark Tank,’ but in Africa. They go around meeting companies we have vetted and screened. They say, ‘I like that one. I don’t like that one.’ ”

Among the angels are Andrew Umhau, a physician and lifelong Washingtonian, and David Grizzle, a former executive at the Federal Aviation Administration and Continental Airlines.

For all Davis’s faith in capitalism, the angels aren’t the only source of money. Renew has a partnership with the U.S. government that works like this: Davis gets funds from a federal agency — he will not say exactly which one — to cover operating expenses. In return, the U.S. government is able to promote African economic development by outsourcing it through the private sector.

“We bring both pieces together and help put the investments into properly vetted companies, and then work with those companies to help them grow.”

Davis is hunting in what he calls the “missing middle” of African economics. Those are investments that are too big for micro-finance but too small for the big guys such as the Carlyle Group and KKR & Co.

“There is nobody [from the U.S.] investing in these companies.”

Renew earned revenue of $690,000 last year, which came wholly from payments from the U.S. government. The company’s other revenue stream kicks in (hopefully) when it sells its investments.

At that time, Renew will repay its angels’ initial investment, give them 75 percent of the profit above that amount and then pay itself 25 percent of the profit.

That could take years, however.

In the meantime, Davis spends most of his time in Africa, searching for investments and helping manage the companies in which Renew has a stake. He keeps investors abreast through periodic conference calls.

When he is in the District, he arranges road shows to recruit new investors and keep the current investors up to date.

Davis grew up in New Hampshire and graduated from the University of Utah with a bachelor of science degree in physics.

But he wasn’t sold on spending his life in a lab. One of his professors told Davis he had a natural understanding of business, so when he graduated, he went straight into a master’s program combining physics and business, paying his way by waiting tables.

Davis always wanted to make money. In 2004, he headed to the East Coast with his master’s in hand, hoping to make his fortune. After interviewing at Booz Allen, MicroStrategy and other companies, he was hired at Touchstone, a consulting firm near Dupont Circle.

He worked at Touchstone from 2004 through 2010.

Renew sprang from a “light bulb moment” near a Ugandan sugar cane field while Davis was on a vacation in 2006.

“I was driving by a sugar cane field, and I looked up and saw a huge, stucco, red roof group of houses. I asked the driver to pull over. ‘What is this?’ He said it was a sugar cane plantation run by Indian businessmen.”

Curious, Davis met with Ugandan and Indian businessmen who were operating in Africa, picking their brains for ideas and information.

“I said it looked like the Chinese, Indians and other countries are doing a lot of business here. But it sure ain’t us Americans.”

When he returned to Washington, he began focusing on what it would take to invest in Africa, starting with his colleagues at Touchstone, then expanding his network beyond that.

He started off meetings with investors on both sides of the Atlantic by telling people he did not want to give money away. He was determined to use business instead of charity to create a driving African economy because he thought that it would be more efficient and that measuring results would be easier.

“That was a compelling enough idea to get me meetings with busi­ness­peo­ple and with philanthropists who were giving to African charities.”

Davis kept at it for years. He incorporated Renew as a private company in 2007. He plundered his meager 401(k) to cover expenses, travel and research costs while trying to form his ambitions and ideas into a coherent business plan.

“We had to figure out how to get $500,000 into a good, vetted company 3,000 miles from Washington and then manage it properly.”

Davis took a sabbatical from Touchstone and went to Africa on his own dime to work the ground and look for businesses.

He met with entrepreneurs in Uganda, Nigeria, Rwanda, Tanzania and Kenya. He visited a vanilla bean company. A biscuit company. A brick factory.

The big break came in 2010 with a call from a bigwig at the Defense Department.

Davis, only 30 at the time, took the Metro to the Pentagon to hear an undersecretary ask him whether his plan to build businesses would work in Afghanistan.

Because the security issues were so profound in Afghanistan, the pitch went nowhere. But Davis found a partner anyway.

“It was the missing piece,” he said, adding that the company has a three-year deal with the government to cover expenses while Davis and his team, including his wife, search for investments.

In July 2013, three years after launching Renew, and after several years without a salary, Davis closed the first investment in dVentus.

Nearly a decade after his light-bulb moment, Davis is no capitalist tycoon. He pays himself $50,000 a year.

You might say he is a patient capitalist.

“I am not rich now, but I feel good about what I do.”