JOHANNESBURG – A long-term strategy is part of the solution in attempting to solve South Africa’s lack of entrepreneurial activity. However, in the short-term, investing in accelerator or incubation programmes might be worth looking at.
Seed Engine, an accelerator programme that focuses on developing early stage entrepreneurs identified eight start-ups with potential and put them through their paces. The programme provided mentoring, coaching and support to start-up entrepreneurs to develop their ideas. With just R100 000 the start-ups had to mould themselves into ventures that someone would want to invest in.
In 13 weeks the start-ups had developed into fully-fledged business looking for funders to take them to the next level—the start-ups got the opportunity to present their ideas to potential investors on Friday.
The excitement was almost tangible as potential angel and venture capital investors piled into a packed auditorium. The start-ups seven minutes to present.
Mark Elias, Seed Engine CEO, said that the accelerator programme which was launched a year ago, provided the platform for entrepreneurs to turn their ideas into investable opportunities. Elias emphasised that South Africa needed start-up entrepreneurs and that these individuals should bot be side lined. The 2012 GEM report highlighted the low level of early stage entrepreneurship in the country, both locally and in comparison to the continent.
Zehoo, a cloud based universal inbox for document storage requested R1.5 million for further development and marketing. Dailyhomes, an online and mobile property platform allows individuals looking for low cost or student accommodation to meet potential sellers or find a place to rent for under R6 000. The company requested R1 million for software development and marketing.
Intellicred had developed an online verification seal that protects online brands and their logos. Shana Kay, Intellicred CEO, pointed out the product offering did not only have potential to grow in South Africa but also internationally.
A lot of leg work had already gone into MiName, an online recommendation platform that allows users to make money by purchasing or reviewing different product offerings. It has already secured deals with Standard Bank and Liberty Life.
Seed Engine’s Brad Shorkend emphasised that entrepreneurship was not going to “happen from thin air” unless initiatives such as Seed Engine helped individuals secure financial support.
Jason Goldberg, Edge Growth director, said currently it is difficult for individuals to invest in their own small businesses because they often do not have enough money to do so. However, this is changing and accelerators help to reduce the risk associated with investing in a start-up, he said.
Seed Engine will be opening up the intake for the second accelerator programme in August.