Upskilling Entrepreneurs To Become Investor-Ready

With over $5bn investment from US investors, 2021 was a record year for investment in African technology start-ups and this bodes well for the economic recovery of the continent. Who are the major players doing innovative things in South Africa? 

South Africa’s start-up ecosystem needs consistent, reliable, and relevant investment information in order to continue the continent’s momentum in attracting venture capital funding seen last year. 

Marc Ashton, founder, and CEO at niche SME consulting firm, Decusatio, says although 2021 proved to be a record year for investment in Africa’s start-up ecosystem, there remains an opportunity for stakeholders to educate themselves on the space. 

“Our Meet the Management series kicking off on the 8^th of February is an opportunity for entrepreneurs and SMEs to not only get a clear picture of what venture capital is available out there from who, they also get to understand what the funders are looking for, getting themselves investor ready,” says Ashton 

Holding engagements with some of the leading Venture Capital firms in South Africa and globally, such as Kalon Venture Capital, Alt Capital Partners and Endeavour Capital Partners, the series will be hosted by Ntokozo Khumalo, a continental business and financial content creator, with over 10 years’ experience in the newsroom, covering news in the SME space. 

“I’m excited to be part of getting entrepreneurs the inside scoop on how to prepare their businesses for investment, an essential ingredient for what we do – supporting entrepreneurs access finance and markets – one of the tools I hope for entrepreneurs looking to scale their businesses to learn is aligning their strategy with investor requirements,” explains Khumalo

Topics to be covered with different venture capital firms include unpacking the venture capital valuation process that speaks to the difficulty for venture capitalists to valuate entities where the price is not defined by the market. 

Entrepreneurs will understand the considerations that play a role in the process including the characteristics of the industry the entity operates in, the businesses’ characteristics such as development stage and competitiveness. 

“Other factors that will be unpacked is how the entrepreneur and their network is also an important consideration when it comes to the business being valued for venture capital.  The series will also assist entrepreneurs better understand the non-financial venture capital contributions their business may also need, an important part of sustainable growth,” elaborates Khumalo. 

Various studies over the years’ have proved how SMEs contribute significantly to the National GDP and to private employment, but struggle to gain access to the funding needed to support the business grow sustainably. 

Venture capital provides the necessary funding, but entrepreneurs and SMEs often lack the business value curve used by investors and other funders to gauge the risk-reward balance of investing in a project or business.  “It can be argued that in South Africa specifically, a small number of high-impact businesses have been responsible for a majority of new jobs created but we cannot continue to put pressure on a select few when we could be part of creating an enabling environment for growth,” Ashton closes.