Funding Options

iMbewu Fund with subdivisions of entrepreneurship finance, procurement finance and franchise finance. This particular fund is aimed at supporting black entrepreneurs who want to start a new business or expand an existing one. It takes the form of offering debt, quasi-equity and equity finance products ranging from R250 000 to a maximum R10 million.

Contact Person: Thabang – thabang@imbewucapital.co.za

It is clear that MANY opportunities exist for the South African entrepreneur to secure funding for their business. Based on industry type, stage of growth and contribution to certain socio-economic factors various institutions and individuals can be approached. Some tips for entrepreneurs pitching for funding to any institution or individual:
• be extremely conservative in the financial projections presented and be prepared to explain where the figures are derived from;
• show an in-depth understanding of the competitive environment;
• be crystal clear on what makes the business unique;
• be just as clear on the expected return on the investment for the prospective funder as well as the expected repayment period; and
• on a purely practical level, never exceed 15 slides in the pitch presentation.
• have a proof of concept or most viable product and an existing customer base where possible.

The guidelines allow investors to see that the business idea has been thought through, that the business environment has been considered and that the entrepreneur is willing to sacrifice to make the idea work. This will serve to allay some of the fears of investors, remove some of their frustrations and enable the entrepreneur to create a strong first impression that could open
the doors for meaningful funding discussions. 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 cares, whose next…” - meaning that there will always be opportunities to pitch for funding via different avenues in the future – be resilient, be persistent, be an entrepreneur!  Michael Jordaan, Former CEO of FNB and now venture capitalist shares the lessons he has learnt being involved in funding: “In nearly every startup business we had to wait for some form of government approval ranging from VAT Registration (most common), Credit Provider status for student loans, Financial Services Board, SARB Exchange Control for IP transfer. I underestimated the time we had to wait and how this negatively impacts cash flow. The entrepreneur applying for funding should anticipate this and have as much of the red tape covered before enquiring about funding.”

 

Crowdfunding sites in South Africa:
• IndieGoGo.com: For musicians and film-makers
• Thundafund.com: South Africans looking to fund their projects can start here.
• Crowdinvest.co.za: An accredited South African funding platform trying to bring established investors together to fund local projects.
• FundFind.co.za: Local platform claiming to give “average South Africans a reason to dream again.”
• Startme.co.za: Taking local projects in categories like agriculture, creative and entrepreneurial amongst others.