Seed Academy has developed The Essential Guide to Funding in South Africa available as a free e-book download. The guide was developed in response to a survey of almost 1000 South African startup entrepreneurs earlier this year.
Explains Donna Rachelson, chief catalyst at Seed Academy, “It is clear from Seed Academy’s first startup survey, and after training hundreds of entrepreneurs, that raising funds is the most common concern. The survey showed that 70% of respondents say they require funding to grow their businesses. 83% of start ups are self funded and only 3% fund their businesses from the vehicles formally established to support them. There clearly was a serious gap – tremendous demand for funding, substantial funding available but the entrepreneurs had a knowledge gap. This practical guide aims to show entrepreneurs just how much support is actually available and how to go about applying for it.”
The Essential Guide to Funding in South Africa revealed there are funding options for all types of entrepreneurs including women, those involved in green projects, mining, manufacturing, technology even businesses in distress are catered for.
Rachelson continues, “To celebrate the launch of resource, Seed Academy has set up funding speed dating.” This will take place on Thursday, 17 September at the Leaderex conference at the Sandton Convention Centre – South Africa’s largest gathering of executives and entrepreneurs. “The idea is to connect entrepreneurs and private and government sector funders. Each entrepreneur will be able to pitch their business to a range of potential funders. As a result, entrepreneurs will better understand the funding requirements of DFIs, banks, angel investors and venture capitalists. Funders will be able to grow their deal pipeline and be exposed to innovative businesses.” Entrepreneurs and funders can sign up via Seed Academy’s website.
The Essential Guide to Funding in South Africa covers some of the more current forms of fundraising such as crowdfunding, but the more traditional angel investors, public and private equity as well as venture capital funding and bank loans are covered too.
The full array of funding available via the development finance institutions is explained in some detail including loans and grants. This section includes the DTI, National Empowerment Fund, The Development Bank of South Africa, Small Enterprise Finance Agency, Enablis Acceleration Fund, Khula Credit Indemnity Scheme, Industrial Development Corporation, Small Enterprise Development Agency, The Technology Innovation Agency and the Jobs Fund.
The guide also contains some tips in pitching for funds and recommends being extremely conservative in financial projections, understanding the competitive environment and having a clear understanding of business differentiators.
Advice offered suggests that whether or not an entrepreneur is successful in getting the funding they set out for, an important lesson is that ‘some will, some won’t, who care, whose next?!’ There will always be opportunities to pitch for funding via different avenues and entrepreneurs are encouraged to be resilient and persistent.
The guide revealed that many startups in South Africa fail for a variety of reasons, from a lack of industry knowledge to the absence of a mentor but in the ecosystem of starting a business, the most significant indicator of success of a startup is sufficient funding.
“South Africa is striving to create sustainable businesses and job creation and focus needs to centre on building an integrated entrepreneurial ecosystem,” said Seed Academy
