Sunday, November 23, 2008

Agri-sector

Not a particularly specific blog posting but something I thought I would throw out into the ether.

I had an interesting interview with Jon Maguire the Chief Investment Officer of a UK fund management company called Cru. Scanning some of the news sites, I see that Maguire and Cru have raised a few hackles in SA and the UK.

Whether people like them or their investment methodology is not of any particular consequence to me. However I did want to touch on one of the comments he made.

One of the sectors they believe provide some great opportunities are the African agricultural sectors. "Farming" will never hold the appeal of high finance or technology, but the reality is there will always be mouths to feed, there is a global shortage of food (i.e. plenty of demand for the product) and with banking on the back foot agriculture is one of the areas where they are seeing some opportunities.

They've invested in places like Malawi, where farming is a relatively low cost investment.

With the global economy facing a massive downturn, food remains a highly defensive industry in which to be in - as they say when things go pear shaped there are always two sectors you can rely on - Food and Beer!

Would be interesting to hear from other entrepreneurs and investors about issues for or against the South African / African agriculture sector as a viable industry to consider.

Buildmax

This isn't really a "Venture Capital" type post, but more in the line of private equity transactions that ordinary SA investors may be interested.

Two of the top SA private equity players - Brait and Peregrine have stakes in JSE listed Buildmax.

The profile of Buildmax according to Sharenet is:

Buildmax has recently been repositioned as one of Africa?s leading empowered opencast mining contractors and the largest in South Africa in the niche of coal mining. The company further provides bulk earthworks and construction materials to the mining and construction industries. Specifically the Equipment - Services business unit is involved in opencast mining projects from greenfields stripping to mine closure and rehabilitation and offers bulk earthworks for civil engineering projects. The Construction Materials business unit houses sand quarry operations, aggregate distributors and cement brick and block manufacturers.

The Brait guys have been extremely bullish on the prospects for Buildmax based on their coal exposure and have recently taken a nice stake in the business. The theory is to follow the "Energy" type businesses as they try to meet SA's constantly growing need.

Buildmax is listed on the JSE and currently trades at around 95c a share. The company trades on an historical price to earnings (PE) ration of 4 times earnings.

If it is good enough for the top private equity guys it might be good enough for the ordinary investment plebs like me!

Wednesday, November 12, 2008

Can you help?

I know that in South Africa, we tend to become somewhat immune to stories of violence committed against young kids.

However I'm making a call to mobilise any resources I can to assist. I received a message from a guy who runs a children's home in JHB. Over the last four years he has seen plenty of bad things and has regularly had to hit people up for cash.

I received the following SMS from him this evening and when he says things are bad - he means things are bad.

"Dear friends, we have a little girl named Kim (aged 6) who was badly raped - the worst we have ever seen. The cost of the reconstructive surgery is R100 000. My company is able to contribute R50000 and we are seeking sponsors for the difference"

I completely appreciate that things are tight at the moment but I have committed to assisting in the fundraising efforts.

If you are able to assist in any way please drop me a mail at marc@rival.co.za or contact me on 082-561-1585 to discuss further.

Kind regards,
Marc Ashton
www.ManufacturingHub.co.za

Wednesday, November 5, 2008

Innovation Fund Invites South Africans to Submit Proposals for Investment in their novel inventions

The Innovation Fund is inviting investment proposals from all South Africans with novel and inventive technological ideas that are commercially viable.
The Innovation Fund, which is an initiative of the Department of Science and Technology mandated to promote technological innovation through investment in development and commercialisation of novel and inventive South African technologies, is inviting investment proposals from all South Africans with novel and inventive technological ideas that are commercially viable.

In announcing this invite the Innovation Fund’s Senior Commercialisation Manager Duncan Raftesath said, “this invite is based on the Innovation Fund’s firm belief in the inventiveness of South Africans, their ability to invent technologies and apply them in solving real life problems. Through this invite we are calling on South African scientists, engineers and inventors to come up with truly novel and inventive technologies that have a commercial case and we will help them finalise their R&D, protect their intellectual property and commercialise their inventions.”

Investments will be made available through the Innovation Fund’s investment programmes which are the Technology Advancement Programme (TAP), Seed Fund and the Patent Support Funds. Projects that need investments to finalise their Research and Development will receive investment through the Technology Advancement Programme which invests in late stage (i.e. where proof of science already exists) research and development of novel and inventive technologies. TAP investments are up to R15 million per project over five (5) years. Projects that have already developed novel and inventive technologies but need investment to take their technologies to the market will receive investment through the Seed Fund, which invests in early commercialisation/ start up activities aimed at taking technological innovations to the market. Total value of Seed Fund investments will be on case by case bases. The last programme that seeks investment proposals is the Patent Support Fund which is comprised of instruments targeted at SMMEs and Techno-entrepreneurs. The Patent Support Fund’s instruments are meant to assist with the costs associated with the protection of intellectual property through the patenting system. Each successful SMME will receive an investment of up to R750 000.

All interested individuals, SMMEs and research institutions must submit their proposals by the end of this financial year, 31 March 2009. Another open call will commence from 1 April 2009. Further information and application forms are available on the Innovation Fund’s website www.innovationfund.ac.za.

Tuesday, October 28, 2008

Hidden opportunities

A mate of mine told me an interesting story last week which I wanted to share with our readers.

He has been consulting to a biggish firm for about 6 months now and so he has gotten quite a good idea of how the politics and the people in the office environment work. Most of them don't know his role in the business and assume he's largely an administrative type which suits his role just fine.

The 'economic crisis' (as it has been dubbed by the media) has meant that the business involved has had to speed up some of its business process review.

This culminated last week in a meeting with all the staff of the affected departments from across the country at head office.

As you can imagine, there was plenty of chatter about job security, retrenchments etc.

For my mate, one of the interesting things was that he was able to sit in on the meeting and watch the reactions as management discussed some of the changes that would be happening, particularly around HOW people would be working. He said that even though there was never any mention of job cuts or retrenchments, many of the employees in the group were concerned that the new job descriptions and KPA's would be beyond them and they just wanted to go back to the old way of working.

Interestingly he said thjat it wasn't age that decided whether somebody was enthusiastic about adopting change. The oldest guy on the team (and presumably the person most reluctant to adapt to a technology based change), was the most enthusiastic supporter of the idea.

My mate was intrigued and he asked the guy (Call him Mr X) why he had been enthusiastic about seeing the bigger picture and going with the changes.

Mr X said "The majority of these people working here depend on their salary as their only means of income, if you take the comfort factor away, there is

no room for them to see the opportunities that this presents. Not one of them picked up that the company is paying for them to receive international training that almost no other South African has received - instead they are worried about a pay cheque."

He went on to say "for me I've been in this industry for 37 years and have slowly but steadily built up some sideline sources of income so I am not wholly dependant on my salary to pay the bills."

The above proves that for many people, money does make the world go round. That single pay cheque that most people rely on is there sole motivation - if they stopped focusing on that for a moment and saw the opportunity to receive R20 000 worth of training that they would probably not have received otherwise.

Interesting way to look at things....

All the blood, sweat and tears that went into the making and developing of 12 ICT businesses in the Western Cape paid off when the Cape IT Initiative (CITI) graduated the companies from their business development programme, VeloCITI on Thursday, 23 October.

The VeloCITI programme which aims to help ICT entrepreneurs re-assessing their business model in order to position them for growth, was one of three CITI projects that was highlighted during the ceremony that took place at Kelvin Grove Club in Newlands. The VIP Graduate programme and the My Business Group programme participants and winners were also honoured.

According to Viola Manuel, CITI’s executive director, the VeloCITI programme and its participants have shown significant growth since the launch in 2006. This year’s cumulative monthly turnover grew to R1.62 million from R275,000 over a period of seven months and the cumulative owner’s salaries grew to R172,000 from R21,000. “This continued curve in growth shows a definite need and hunger for sustainable support and mentoring in the market. With the available infrastructure support from the Bandwidth Barn, we are able to address the looming ICT skills shortage combined with the necessary business skills that is required to run a thriving business”, Manuel said.

The two finalists in the VeloCITI programme, Breadbin Interactive and Nclose, both secured large deals with major corporate clients, but it was Nclose who walked away with the winning title and prize. “The value and input we have received from Cape Venture Partners, PeerPower and CITI has been tremendous. We have seen a marked improvement in the effectiveness of our daily tasks, the way we handle ourselves and our outlook on the future. The lessons we have learnt have assisted in creating strong foundations as well as giving us the tools necessary to sustain the growth we are currently experiencing”, said Stephen Osler form Nclose.

The VIP Graduate programme focuses on closing the existing gap between final year ICT students and entering the workspace as a marketable individual. A maximum number of 12 candidates participated in this year’s programme that consisted of ten modules. The two IT graduate winners were Wayne Neethling and Ncumisa Ndungane. “Still being in college, I know nothing really about the working environment. This programme trained me in basic corporate necessities – like where to start, how to act in a working environment and how to behave in an interview. Winning this programme means that I am on the right track and that motivates me to keep on going”, Ndungane said.

A further 12 companies participated and completed the the My Business Group programme. This six month programme creates an add-on opportunity for VeloCITI graduates or anyone who is already in the IT business sector to come together and to grow their strategic thinking process, supply ideas to their businesses and to share experience and information in a group. This creates a sense of belonging amongst entrepreneurs and makes them feel less isolated.

“We are really pleased with the growth and competence of this year’s graduates. With the continued private sector and provincial government support, CITI and the Bandwidth Barn will definitely continue to invest in the development of the local ICT sector as the demand for specialised and skilled individuals are expected to increase even further over the next few years”, Manuel said.


About the Cape IT Initiative:
The Cape IT Initiative (CITI) is a networking and cluster development agency that brings together people, ideas and capital to grow the Western Cape, South Africa’s ICT sector. CITI’s goal is to promote Cape Town as a global IT hub and gateway into Africa, thus facilitating the creation of jobs and prosperity through IT. In union with its subsidiary, The Bandwidth Barn, an IT incubator and business accelerator in the Western Cape, opportunities are created for great successes.

Contact details:
Tamzin Martin
Project Manager
Tel: 021 409 7000

Wednesday, October 15, 2008

Coast2Coast

I had a meeting with the guys from Coast2Coast this evening. They are an up and coming private equity firm which is actively seeking investments in South African Fast Moving Consumable Goods (FMCG) sector.

The company is looking for established businesses - preferably with a 10 to 15 year operating history and strong brands to take majority equity stakes in the business.

For further information please contact Cris Dillon or Gary Shayne on 021 701 2232 or visit www.coast2coast.co.za

Tuesday, September 30, 2008

R1 BILLION FUND LAUNCHED TO INVEST IN ‘CLEANTECH’ COMPANIES AND PROJECTS IN SOUTHERN AFRICA

Inspired Evolution Investment Management is delighted to announce the launch of South Africa’s first ever clean technology (‘cleantech’) investment fund: The Evolution One Fund is a 10 year private equity fund targeted to grow to ZAR 1 billion by mid-July 2009. The fund has conducted its first close in July 2008 at ZAR 400 million raised from four core international investors: IFC (a member of the World Bank Group), Castleway Properties (advised by Consensus Business Group), the Swiss Investment fund for Emerging Markets (Sifem) and the Finnish Fund for Industrial Cooperation (Finnfund). The fund is currently being marketed to investors in southern and South Africa and plans to make its first investments in 2008.

Cleantech spans many industries: clean energy generation; water purification; waste management; and efficient production technology. Evolution One’s investment philosophy is based on the concept of additionality whereby accelerated development and use of cleantech products, services and processes not only provide superior performance at lower costs but also reduce environmental and climate change impacts, thereby promoting mutually reinforcing benefits for society.

Global investment activity in the sector is already significant, estimated to be US$ 148.4 billion in 2007 (source: New Energy Finance) and is forecast to exceed US$ 226 billion by 2016 from private equity and venture capital alone. High growth opportunities are emerging in the agribusiness, cleaner production, pollution control, waste management and transportation sectors, as well as the core areas of energy and water. However, to date, no fund has focused on the role of cleantech in Africa where environmental and social issues make it a vitally important driver of the economic development of the region.

The Evolution One Fund will make around 10 to 15 investments over a period of three to five years across the whole SADC region. The fund will focus on cleaner energy and the environment – aiming to generate an enhanced annual internal rate of return by focusing on the following eight sectors and sub-sectors:

  • Cleaner energy generation and energy efficiency
  • Cleaner production technologies and processes
  • Air quality and emissions control
  • Water quality and management
  • Waste management
  • Agribusiness and forestry
  • Natural products, organics and natural health
  • Sustainable buildings and environmental real estate

In all cases, particular attention will be paid to small, medium and micro-enterprises; broad-based black economic empowerment; and transformation benefits of underlying investment projects.

Dr Zuko Kubukeli, Executive Director of Inspired Evolution Investment Management said, Cleantech provides cross-sector opportunities to make more sustainable investments without foregoing the traditional returns of private equity. Having raised ZAR 400 million from our core international investors, we are now targeting a second round of international and local investors. We are single-mindedly focusing on building strategic partnerships and on sourcing proprietary and appropriate technologies for application within the SADC region across a variety of investment projects.”

Mr Vincent Tchenguiz, Chairman of Consensus Business Group who are the advisor to one of the cornerstone investors and a founding partner in Inspired Evolution Investment Management said: “Consensus Business Group has had a strategic focus on the global environmental sector for a number of years. We have developed innovative business models to deliver strong financial returns and to add strategic value to our investee companies. We look forward to working with Evolution One Fund – we are confident that our long-term, wide ranging experience in the sector will serve to benefit the Fund.”

Ms Haydee Celaya, IFC Director for Private Equity and Investment Funds, said, “IFC’s investment in Evolution One Fund is in line with the World Bank’s overall strategy to support projects investing in technologies to combat climate change. This investment demonstrates IFC’s commitment to be a pioneer and a leader in the clean energy and climate change sectors in southern Africa.”

Further information is available on www.inspiredevolution.co.za.

Wednesday, September 17, 2008

Chemistry and innovation

For those with a little interest in commercial science / biotechnology investments, you might be interesting in this workshop here.

Monday, September 15, 2008

Food and Pharma sector investments

For investors looking at the South African Food or Pharmaceutical industries as places to make investments they may be interested in the following:

SA listed pharmaceuticals assessed

SA listed Food & Chemical companies assessed

Sunday, September 14, 2008

Plug your Venture Capital requirements

The thinking behind the SA VC Strategist blog is to try and establish something of a South African Venture Capital community for venture capitalists / investors to meet with potential business plans.

Personally I think it is one of the reasons that the internet is such a powerful tool. People looking for funds can throw a business idea out there and venture capitalists or investors can assess the options available to them.

With a bit of luck some deal flow can be generated if a decent venture capital community can be established. My personal opinion is that start-up / venture capital goes WAY beyond just askng for a hand out. I think the management skills needed to get the business off the ground are even more important than the money, which is why I think we'd like to focus on with this blog.

But for the mean time - COMMUNITY BUILDING IS THE NAME OF THE GAME...

So for that reason, I'm inviting South Africans who believe they have a good business idea but need some Venture / Start up capital to have a plug for business in the comment section of this blog and maybe tell our readers a bit about your idea, the kind of capital you are trying to look at and what skills you have / need and what kind of money you are looking for.

We don't want your whole business plan!

I read somewhere that if you can't sell your business in 200 words or less then your business plan isn't all that important. Maybe that should be the challenge!

Post your business ideas below and lets see what we can build up as we go along...

Tech startups / VC - commercial viability

Article supplied by ManufacturingHub.co.za.

Every now and then, one of the technology bloggers or publications will run

with something along the lines of:

"South Africa's most promising technology start-ups"
"South Africa's best Web 2.0 offerings"
"South Africa's best web start-ups"

and then they will go on to mention the usual suspects such as Afrigator,

Amatomu, Muti, Zoopy, Blueworld, iBlog, Mxit etc etc.

But what I worry about is what makes these tech start-ups the "most promising" or the "best" from a commercial perspective.

NOTE I SAID COMMERCIAL PERSPECTIVE.

Many of these are really great web tools and I use all of them regularly, but for something to be "most promising" or "the best", you need to have a commercial aspect to it as well don't you agree?

I can come up with many brilliant concepts but if I can't make a return off it, then is it all that promising?

I've spoken to a couple of different people involved in these and other start-ups and I've been to a couple of venture capital / MBA / 'ideas' forums almost all of them agree that while the concepts are useful - the owners have no idea how to monetise what they've got.

Amazon.com
I have been wracking my brains trying to remember where I read an article about online reseller Amazon.com.

The author's concluded that Amazon was USEFUL to him as a consumer because he got goods nice and cheap but as an INVESTMENT, he would never touch the company, because it would battle to be profitable.

My feeling is that tech in South Africa has grown up. Legislation is easing, there is plenty of venture capital money from both media, communications and private investors to be thrown around - in general the industry is growing up.

But part of this growing up process is going to be a demand to differentiate between cool concepts and viable business models. This I think is where venture capitalists have a big role to play making 'hands on' type investments.

There is a lot of talk about "social networks" having the potential to make money because they attract niche markets to their sites and try to develop return traffic which must 'surely' have some way to be monetised.

A lot of these social networks / social tools are bleeding money and using the excuse that once they reach a "critical mass" they will be able to start making money - but the question has to be asked - will they EVER make money.
Will somebody start to pay for something if they have been used to getting it for free?

USEFULNESS vs. COMMERCIAL VALUE

We have some really good tech concepts and businesses in this country - but if we can't differentiate between something that is useful and something that is commercially viable how can the country build solid investment in its venture capital market?

OR... (And I don't have the answer so I am throwing this question out there)

Do you take the view that something like Muti or Afrigator for instance is an ENABLER and by owning the ENABLER you give your chance to break into the commercial market as well?

Wednesday, September 10, 2008

Absa Capital buys 10% of Dark Fibre Africa

Saw this notice from ABSA Capital / I-Net and thought it might be of interest to local venture capital industry participants

Johannesburg, Sep 10 (I-Net Bridge) - Absa Capital, the investment banking division of Absa Bank Ltd, has bought 10% of Dark Fibre Africa (DFA), a local telecoms infrastructure provider, it announced on Wednesday.

Based in Centurion, DFA, installs carrier neutral broadband ducting infrastructure, and sells and maintains discrete fibre pairs, or cables, to individual telecommunications operators.

The acquisition follows last month's high court decision involving the Independent Communications Authority of South Africa (Icasa) and telecoms firm Altech (ALT) that Altech has the right to self provide its own network under its Value Added Network Service licence.

The move is expected to open floodgates of VANS licensees seeking to build their own networks, but Absa Capital's Infrastructure Equity Investment official Sollie Nortjé said many of the 300 or so VANS licensees did not have the financial muscle to roll out large networks.

He said it would make strategic and "financial sense" for VANS licensees to use DFA's network, because it would reduce the cost of building duplicate networks without affecting their competitive positions. Unlike Telkom, MTN, Vodacom and Cell C, DFA does not compete with operators - it only builds network capacity designed to be shared by operators, said Nortjé.

Nortjé's comments comes as Absa Capital announces a 10% acquisition in
DFA and, along with Absa Corporate and Business Bank, finalises agreements to provide a mezzanine facility of 250 million rand and a senior debt
facility of up 700 million rand as a first round of funding to DFA.

DFA is spending 2 billion rand in the next 12 months on to deploy broadband infrastructure across South African cities, which could be leased by multiple operators.

Other major shareholders in DFA are VenFin and Community Investment Ventures.

Sunday, August 31, 2008

Private Equity World Africa 2008

The leading African private equity and venture capital event in South Africa according to the organisers.

Private Equity World Africa 2008 is a senior level conference giving you strategies and tactics for investing in private equity.

For delegates

* Close examination of private equity in the African continent – North Africa and SADC focus
* Debt capital markets – where are the best opportunities?
* Successful LP’s and GP’s relationship – looking at the good, the bad and the ugly
* Making private equity investments flexible for institutional investors
* Exit strategies in emerging markets – investigating their strengths and weaknesses
* Investing in mid-cap market – clarifying the value proposition
* New role of venture capital in South Africa


An outstanding marketing solution
Private Equity World Africa 2008 is an unrivalled and cost effective marketing solution that offers many advantages to a select group of sponsors, and then brings you face-to-face with
your customers and prospects.

For further information click here.

Tuesday, August 19, 2008

Maxum Incubator

The Maxum Incubator, together with University of Pretoria and IdeaBank are organising the first pre-incubation offering for young online entrepreneurs.

Read full details on Ismail's post here.

Saturday, August 16, 2008

NEW PRIVATE EQUITY FUND LAUNCHED TO INVEST IN AGRIBUSINESS IN AFRICA

A new R700-million private equity fund has been launched with the aim of investing in the buoyant agribusiness sector across sub-Saharan Africa. The Agri-Vie Fund, formed by Sanlam Private Equity and the investment group Strategy Partners, will focus on entrepreneurs involved in the agribusiness value chain, rather than directly in the farming industry. It offers an opportunity for potential investors to tap into this growing African market and gives strategic assistance to the owners of agri businesses.

The fund recently had its first close at R330-million, with initial investments from the insurance industry and development finance institutions such as the Development Bank of Southern Africa (DBSA), Industrial Development Corporation (IDC) through the Risk Capital Facility - a fund established by the European Community and the government of South Africa and managed by the IDC - and the US-based Kellogg Foundation. The fund is open to other investors until May 2009.

Pieter Kriel, chief executive of Sanlam Private Equity, said that agribusiness is the mainstay of the economy in most sub-Saharan countries. “On average the gross domestic products in sub-Saharan Africa have grown between six and seven percent in the past three years and the number of democracies has more than doubled since 1999. The resultant effect is that these countries offer exceptional opportunities for investors.”

The fund will look at businesses which offer value-added components along the agri-business value chain. “We will not invest in farms, but rather in the processing and marketing of farming outputs such as food, certain beverages and fibre products. By following the route of expanding the industry, it will ultimately create new growth opportunities for existing and emerging farmers. In addition, Agri-Vie's mandate includes investment into ecotourism in the context of integrated rural development,” said Kriel.

Emile du Toit, the divisional executive for private equity at DBSA said, “Agribusiness is an important contributor to economic growth in the region and is poised for significant expansion. Given the significant lack of equity risk capital to finance agribusiness transactions, the DBSA’s participation in this fund allows it to play a catalytic role in developing financial infrastructure to provide access to much needed long-term risk capital in this critical sector.”

Du Toit added that sustainable investment in agriculture can make a significant contribution to socio-economic development, in keeping with DBSA’s development mandate. “I believe that several countries on the continent have comparative advantages in agriculture, which provide a logical base for economic growth.”

Agri-Vie investors have appointed an active management structure, led by Herman Marais of Strategy Partners, which comprises members from Sanlam Private Equity and a women-led agricultural investment group, Makotulo Agricultural Company, among others.

Marais said that Agri-Vie is a true business partner for agribusiness entrepreneurs. “The fund contributes risk capital and management know-how to fully unlock the potential of businesses.”

He said, “Over and above the opportunities associated with the prevailing global food and commodities cycle, there is growing demand globally for various African exports such as organically grown vegetables, fruit and flowers, processed natural fibre for industrial applications as well as natural supplements and health products. However, there are numerous existing agri-enterprises across the African continent which are not performing to their potential - mainly as a result of lack of access to capital, limited market knowledge and infrastructure limitations.

“Agri-Vie aims to be a catalyst to unlock this potential to the advantage of the enterprises concerned, their host communities and the fund’s investors. Agri-Vie believes that sustainable development is best brought about by the disciplines of investment rather than aid grants.”

Kriel said that the fund had a strong empowerment focus. “Our involvement was partly spurred by the Financial Sector Charter which designates agri as an area of ‘targeted investment’. Both Sanlam Private Equity and Strategy Partners truly believe in the business and investment potential of agribusiness in South Africa and on the continent and are delighted to be playing a role in realising it. The South African portion of the fund was started with the express purpose of empowering agri-businesses and playing a key catalyst role for BEE in the agribusiness sector.”

Agribusiness women such as Ntombi Msimang and Jean Davidson are among the directors of the Makotulo Consortium. Kate Moloto, a shareholder in Agri-Vie’s investment management structure, says “Women are far behind with regard to participation as owners and managers in agribusiness. Through Agri-Vie, we intend to make a meaningful contribution to empowering women in this sector.”

Marais said the fund had found a niche in Africa and was already experiencing healthy transaction flow. “We have had significant interest from international investors and have formed a parallel structure to the South African portion of the fund – a separate entity domiciled in Mauritius which is focused on investment in sub-Saharan countries outside of South Africa. We are already evaluating more than 20 possible investments in South Africa and the Mauritius structure of the fund is looking at a similar number in countries such as Botswana, Tanzania, Uganda and Kenya.”

Friday, August 8, 2008

Venture Capital and SME Tax Incentives

The sections which are relevant to the small business sector / venture capital are outlined below - section 12J (Venture Capital Companies) and the Sixth Schedule (Presumptive Turnover Tax).

Venture Capital Companies: pages 46 - 51 of the Bill (and 54 - 58 of the Explanatory Memorandum);

Presumptive Turnover Tax: pages 102 - 113 of the Bill (and 43 - 53 of the Explanatory Memorandum).

The SAVCA VC Development Sub-Committee will be meeting with National Treasury to discuss these proposed incentives.

Full details can be found on the SAVCA website

Business Partners to Welcome New Managing Director

JOhann Rupert, chairman of Business Partners Limited – leading financier of small and medium enterprises in South Africa – announced at the company’s annual general meeting yesterday that Nazeem Martin has been selected to become Managing Director on 1 January 2009.

Mr Martin, currently deputy managing director will succeed Jo’ Schwenke, who will retire as MD on 31 December 2008.

“I am pleased to announce the selection of Nazeem Martin as succeeding Managing Director,” says Johann Rupert, “Nazeem is a talented and experienced leader, who has already made a significant impact on the small and medium business environment in South Africa. Business Partners is an extraordinary company, and I am certain that Nazeem will lead this company to new levels of success, despite the current difficult economic environment.”

At present, Martin heads up the company’s iKapa Business Unit, based in Cape Town. “It is an honour to be entrusted with the responsibility of leading a company that had such a positive impact on the SME environment,” he says, “and it is a privilege to succeed Jo’ Schwenke, under whose leadership and vision, Business Partners grew into a company respected and acknowledged internationally for its unique solutions to the challenges SMEs face.” Martin concludes by saying “our stability and success as a nation depends in large part on a vibrant, enabled and productive entrepreneurial sector,” says Martin, “and it is our intention at Business Partners to be one of the continent’s most significant forces for innovative entrepreneurial development.”

During the twelve years of Jo’ Schwenke’s tenure, the company’s investment portfolio has grown organically from R564 million at the end of the 1997 financial year to R1 672,1 million. It was also during this time that, under Schwenke’s vision and leadership, a unique investment model, which makes use of equity, royalty and loan financing, was developed. The Business Partners investment model for SMEs is internationally recognised as one of the most effective for use in developing economies.

“It is with a sense of satisfaction that I approach the end of my term,” Schwenke says, “and I believe the company will continue to build on its success under Nazeem’s able leadership. Nazeem’s solid educational background, previous business experience and excellent track record make him the perfect person for the job.”


www.businesspartners.co.za

Saturday, July 26, 2008

Artificial Intelligence

This is not strictly a Venture Capital related post but I think it is something that ties into the VC sector.

Artifiical Intelligence is one of the areas where Venture Capitalists might be investing in the next few years.

This blog post asked the question of whether a computer brain could ever have an "imagination" or be "creative".

Its a tough debate - maybe throw in your 10 cents worth?

Thursday, July 24, 2008

InVenFin

Former JSE listed IT investor, VenFin has launched a new fund called "InVenFin". The idea is to serve as a sort of incubator for innovative new ideas in the:

Engineering
Information Technology
Digital Media
Communications
Design
and Bio-technology fields.

www.invenfin.co.za

The fund has a starting point of R50 million to spend on new start-ups and combines money with the heavy hitting power of the VenFin management. If you have a really innovative and unique technology, then these are probably the guys who are going to take your South African bred technology to the world.

SAVCA Venture Capital Sub-Committee has released it Venture Capital development discussion paper

This discussion paper attempts to establish a business case for growing the VC industry in South Africa, by outlining the critical role of the VC industry in the economy and highlighting the returns potential, albeit at significant risk, to investors.

The SAVCA Venture Capital Sub-Committee has released it Venture Capital development discussion paper. This discussion paper attempts to establish a business case for growing the VC industry in South Africa, by outlining the critical role of the VC industry in the economy and highlighting the returns potential, albeit at significant risk, to investors. It lists some of the challenges faced by a pre-emergent VC industry in South Africa. The document’s purpose is to elicit debate and define a response in respect of steps that can and must be taken to nurture this asset class, in order for creative destruction to lead to a sustainably vibrant, growing economy.

SAVCA will host two workshops (Johannesburg and Cape Town) to discuss the document’s content, recommendations and questions (which we feel require debate).

A copy of the VC development discussion paper can be obtained from the SAVCA Office

Author : SAVCA Office
www.savca.co.za

SA Venture Capital Strategist

Over the last week I have attended different announcements for different venture capital, entrepreneur funding and incubator type offerings.

South Africa has an abundance of money to fund these start-ups but very few resources for tracking where and how the different funds are investing.

This is a pity because many of them fully publish the details, the mainstream media often overlooks these investments because they don't carry sufficient weight or "proof of concept".

The aim of this blog will be to try and track what the major funds are doing, where they are investing their money and the kind of concepts they are looking at.

If you have further news or information on this sector please feel free to drop me an e-mail at newsdesk@rival.co.za