tag:blogger.com,1999:blog-35224344503617524322024-03-13T03:31:15.168-07:00SA Venture CapitalSA Venture Capital, venture capital, SA Business Investors, Business Finance for South African BusinessesBen Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comBlogger72125tag:blogger.com,1999:blog-3522434450361752432.post-11204052326347017272012-08-02T15:01:00.000-07:002012-08-02T15:01:03.532-07:00Is crowdfundig a threat to VC firms?With so much talk of <a href="http://www.startme.co.za/">crowdfunding</a> in the air we probably need to start asking the question on whether crowdfunding will be asking over from VC firms in providing the much needed <a href="http://www.startme.co.za/">business finance</a> for the 1000's of startups needing seed money and not finding it anywhere at the moment.<br />
<br />
Recently, Fred Wilson, a famous VC at Union Square Ventures, proffered a rather pessimistic assessment of the future of his industry in the wake of the JOBS Act and the resulting move to equity crowdfunding. Wilson sees great potential for entrepreneurs using crowdfunding portals to raise capital. But for the problematic VC industry, the news isn’t so good. His thesis is that it’s better right now to be an entrepreneur than to be a VC. In his own words, “Venture capital is becoming a bad business.”
<br />
<br />
In his estimation, Wilson sees families investing one percent of their assets in crowdfunding, which translates to a $300 billion bonanza for entrepreneurs and start-up companies. This process could start by the end of this year, when the first equity crowdfunding portals will go live. We are all waiting for the Securities and Exchange Commission to finish making rules, which are due by year’s end. Wilson isn’t particularly sanguine about the returns on these investments, but he doesn’t discount the lottery mentality that will probably drive crowdfunding investing despite the risks.
<br />
<br />
Currently, VC firms receive about $30 billion a year in investments from large institutions and banks. This is only about four percent of the investors’ portfolios, which may reflect the fact that the VC market has underperformed the stock market in the past two decades. Apparently, about $15 billion of that annual investment goes up the chimney because of bad investments. In other words, the best VCs can do is put $15 billion to productive use each year. This begs the question – who will figure out how to intelligently employ $300 billion in crowdfunding investments?
<br />
<br />
A company can only raise $1 million per year via crowdfunding. For VCs and angel investors, this is chump change. Angel investors regularly invest much larger sums – in recent years, Russian, Middle Eastern and other angel investor have sweetened the VC pot $1 to $2 billion annually. How will $300 billion in crowdfunding “casino money” be allocated to so many small businesses without overwhelming the system? Wilson doesn’t have the answer, but he does have a recommendation to VCs – become entrepreneurs or, if you can believe it, bloggers! While crowdfund blogging is the most noble of professions (ahem), it’s more likely that VCs will simply adapt to the new environment. Wilson offers five options:VV
1. Make investments in obscure niches rather than following the crowd.<br />
2. Cut by an order of magnitude the amount of money you raise.<br />
3. Become angel investors.<br />
4. Become leaders in the crowdfunding industry by making recommendations of companies they think are worth funding.<br />
5. Retire.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-4253010624873442282012-08-02T15:00:00.001-07:002014-05-07T08:20:56.186-07:00Venture Capital vs CrowdfundingWith so much talk of <a href="http://www.startme.co.za/">crowdfunding</a> in the air we probably need to start asking the question on whether crowdfunding will be asking over from <a href="http://cabancapital.co.uk/">VC firms</a> in providing the much needed <a href="http://cabancapital.co.uk/">business finance</a> for the 1000's of startups needing seed money and not finding it anywhere at the moment.<br />
<br />
Recently, Fred Wilson, a famous VC at Union Square Ventures, proffered a rather pessimistic assessment of the future of his industry in the wake of the JOBS Act and the resulting move to equity crowdfunding. Wilson sees great potential for entrepreneurs using crowdfunding portals to raise capital. But for the problematic VC industry, the news isn’t so good. His thesis is that it’s better right now to be an entrepreneur than to be a VC. In his own words, “Venture capital is becoming a bad business.”
<br />
<br />
In his estimation, Wilson sees families investing one percent of their assets in crowdfunding, which translates to a $300 billion bonanza for entrepreneurs and start-up companies. This process could start by the end of this year, when the first equity crowdfunding portals will go live. We are all waiting for the Securities and Exchange Commission to finish making rules, which are due by year’s end. Wilson isn’t particularly sanguine about the returns on these investments, but he doesn’t discount the lottery mentality that will probably drive crowdfunding investing despite the risks.
<br />
<br />
Currently, VC firms receive about $30 billion a year in investments from large institutions and banks. This is only about four percent of the investors’ portfolios, which may reflect the fact that the VC market has underperformed the stock market in the past two decades. Apparently, about $15 billion of that annual investment goes up the chimney because of bad investments. In other words, the best VCs can do is put $15 billion to productive use each year. This begs the question – who will figure out how to intelligently employ $300 billion in crowdfunding investments?
<br />
<br />
A company can only raise $1 million per year via crowdfunding. For VCs and angel investors, this is chump change. Angel investors regularly invest much larger sums – in recent years, Russian, Middle Eastern and other angel investor have sweetened the VC pot $1 to $2 billion annually. How will $300 billion in crowdfunding “casino money” be allocated to so many small businesses without overwhelming the system? Wilson doesn’t have the answer, but he does have a recommendation to VCs – become entrepreneurs or, if you can believe it, bloggers! While crowdfund blogging is the most noble of professions (ahem), it’s more likely that VCs will simply adapt to the new environment. Wilson offers five options:VV
1. Make investments in obscure niches rather than following the crowd.<br />
2. Cut by an order of magnitude the amount of money you raise.<br />
3. Become angel investors.<br />
4. Become leaders in the crowdfunding industry by making recommendations of companies they think are worth funding.<br />
5. Retire.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-47062003071342452202012-07-22T13:14:00.002-07:002012-07-22T13:16:58.477-07:00South African Crowdfunding<span style="background-color: white; text-align: justify;">Today South Africa is one of the largest emerging consumer
markets, and requires </span><a href="http://www.startme.co.za/" style="background-color: white; text-align: justify;">working capital</a><span style="background-color: white; text-align: justify;"> to operate, to grow and to compete
successfully in sectors with future potential, such as agro-industries, solar
energy, </span><a href="http://www.startme.co.za/" style="background-color: white; text-align: justify;">business finance</a><span style="background-color: white; text-align: justify;">, mobile phones, gold mining and advertising
industries.</span><br />
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">Unfortunately, there are very few accredited <a href="http://www.investorsnetwork.co.za/">angel investors</a> and
venture capitalists who one could approach with your <a href="http://www.sabusinessplans.co.za/">business plan</a>. The continent’s banks rarely
lend to early-stage entrepreneurs and small businesses. Most international
investors hesitate to provide capital to African startups. Anglo-Saxon, Chinese
and Arab investment funds focus only on mostly large corporate entities.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">A new financial instrument, with very flexible rules, could
strengthen small business growth in South Africa and could wind up changing the
entrepreneurial landscape for the better. Initially developed in the United
States, Crowdfunding allows users to submit projects that have potentially had
difficulties receiving traditional funding (from banks, venture capitalists,
angel investors…) by raising small amounts of money from a large number of
ordinary individuals (Internet users, network of contacts, friends, and
small-scale investors).<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">Its purpose varies, from artists seeking support from fans, to small
businesses looking for funding, to technology, to political campaigns, to
citizen journalism or organizations dedicated to disaster relief.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">Crowdfunding platforms give entrepreneurs new tools to describe
their investment opportunity and people to become investors in these
opportunities for very little money. There is no legal obligation to hire
lawyers or advisors to assist in the fundraising process.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">The project initiators disseminate the information using their
social networks and encourage many other people sharing the same interests in
their networks to do the same.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">In addition, crowdfunding is an excellent way for entrepreneurs to
test and improve their products/services through these online platforms and it
provides a forum of feedback from the internet community. If the projects do
not reach its funding goal after time expires, it would mean that the products
or services do not meet the public needs, requirements and expectations and some
changes need to be made. Finally, one of the advantages of crowdfunding is that
project supporters can raise money without giving away any equity in their
business like they would have to do with venture capitalists.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">Kickstarter, one of the pioneers of crowdfunding, has implemented a
huge number of successful projects in the United States and has demonstrated
convincingly the viability of the concept. Given that the sector exhibits huge
growth potential, </span><u><span style="color: navy;"><a href="http://www.mckenson-invest.com/"><span style="color: navy;">www.McKenson-Invest.com</span></a></span></u><span lang="EN-US"> , an online platform connecting investors and entrepreneurs, is
currently undergoing major changes in order to become a true crowdfunding
platform for all kind of projects in South Africa. One of the Obama
Administration’s initiatives, which have been the subject of profound debate in
financial and economic circles in the United States, may be of interest to the
business landscape in South Africa. In November the House of Representatives
passed a bipartisan bill, the Entrepreneur Access to Capital Act, which would
allow anyone to raise startup capital for their business, up to $10,000.00 via
the Web (or up to 10% of one’s income, whichever is less) , with a cap for
companies at $1 million and provides a Crowdfunding exemption from SEC registration.
Donors will be considered as true early-stage investors because they will
participate in the company’s capital as partners or shareholders. Under current
U.S. law, the sale of equity in private companies is limited to “accredited
investors”. The bill that was passed in November provides a Crowdfunding
exemption from SEC registration.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">The enormous potential remains largely untapped in South Africa,
with only a fledgling sector in Europe, which is also predicted to have one of
the brightest futures.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">Crowdfunding platforms could help more early-stage entrepreneurs
launch and develop their business idea in South Africa. The representatives of
economic authorities should quickly implement a robust legal and regulatory
framework in order to promote and encourage crowdfunding on the continent.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">The Regional Stock Exchange, which handles transactions for eight
States of West Africa (Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali,
Niger, Senegal and Togo), the Central African Stock Exchange (led jointly by
Gabon, the Central African Republic, Chad, Congo-Brazzaville and Equatorial
Guinea), the Douala Stock Exchange and the Rwanda Stock Exchange are also the
way for businesses to get funding by issuing stocks and bonds. Unfortunately,
these financial markets have a very small number of listed companies, have
failed to persuade all the identified businesses to go public and are unable to
draw the attention of the international investment community. The probable
merger between the Central African Stock Exchange and the Douala Stock Exchange
will not make things any better. Economic fabric is mainly made up of very
small enterprises (VSEs) and small and medium-sized enterprises (SMEs) in the
majority of French-speaking countries in sub-Saharan Africa. Many of these
ventures are not eligible for listing.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; text-align: justify;">
<span lang="EN-US">The above-mentioned stock exchanges remain essential structures and
should coexist with <a href="http://www.startme.co.za/">crowdfunding</a> organizations. Its development will depends on
a dense network of innovative, successful and highly dynamic SMEs, the
improvement of bancarization level, an active campaign to educate business
owners about the introduction to the stock exchange, the establishment of a
stock market culture, a high savings rate of private households, the existence
of online brokerage firms and an administrative and financial autonomy, free of
political interference. There is still a very long way to go before they reach
the same size as the major international financial centers.<o:p></o:p></span></div><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-65786682661284178792011-11-02T14:49:00.000-07:002016-08-09T08:56:27.672-07:00Is Venture Capital an option for Entrepreneurs?<br />
So what do we know about venture capitalists? Sure we know that they take calculated risks investing in viable <a href="http://www.ukbusinessplanning.co.uk/">business plans</a> often taking a large steak in the business with the "hope" that the business will grow sufficiently fast to ensure that the the investor makes a large profit on the initial risk taken. But its not always this straight forward. Many entrepreneurs complain that once the venture capital firm comes into the business, a <a href="http://www.ukbusinessplanning.co.uk/">new business plan</a> is implemented, giving priority to processes and formality takes over, robbing the business of the culture that once made it a potential winner. Venture capitalists will surely defend themselves by saying that they act in a professional manner in doing what needs to be done to both protect their investment and give the business the best possible platform from which to succeed.<br />
<br />
But every entrepreneur will have a different experience. As with so many things in business it comes back to relationships and how you nurture, grow and maintain these. Some will be doomed to fail while others still leads to the huge successes that both the entrepreneur and investor foresaw at the start of their journey together.<br />
<br />
Often these opinions are based on one individual's specific personal experience with venture capital, and often based on someone's negative experience -- as is often the case, people who have negative experiences are more motivated to tell others than people who have positive experiences.<br />
<br />
With that in mind, I will try to provide my hopefully broad perspective on the topic.<br />
<br />
I'll just say up front that I don't think my point of view on this is any more valid than that of any of my fellow entrepreneurs -- everyone's experience is different, and this is definitely a topic where reasonable people disagree.<br />
<br />
My experience with venture capital includes: being the cofounder of two VC-backed startups that later went public (Kleiner Perkins-backed Netscape and Benchmark-backed Opsware); cofounder of a third startup that hasn't raised professional venture capital (Ning); participant as angel investor or board member or friend to dozens of entrepreneurs who have raised venture capital; and an investor (limited partner) in a significant number of venture funds, ranging from some of the best performing funds ever (1995 vintage) to some of the worst performing funds ever (1999). And all of this over a time period ranging from the recovery of the early 90's bust to the late 90's boom to the early 00's bust to the late 00's whatever you want to call it.<br />
<br />
I'm starting to understand why I don't have any hair left.<br />
The most important thing to understand about venture capitalists is that they are in business to do a very specific thing.<br />
<br />
They raise a large amount of money -- often $100 million or more -- today, in order to invest in a series of high-risk startups over the next small number of years -- usually 3 to 4 years.<br />
<br />
The legal lifespan of the fund is usually 10 years, so that's the absolute outer limit on their investment horizon.<br />
<br />
They generally intend, and their investors generally expect, to have the returns from those startups flow back within the next 4 to 6 years -- that's their realistic investment horizon.<br />
<br />
Within that structure, they generally operate according to the baseball model (quoting some guy):<br />
"Out of ten swings at the bat, you get maybe seven strikeouts, two base hits, and if you are lucky, one home run. The base hits and the home runs pay for all the strikeouts."<br />
<br />
They don't get seven strikeouts because they're stupid; they get seven strikeouts because most startups fail, most startups have always failed, and most startups will always fail.<br />
<br />
So logically their investment selection strategy has to be, and is, to require a credible potential of a 10x gain within 4 to 6 years on any individual investment -- so that the winners will pay for the losers and in the timeframe that theirinvestors expect.<br />
<br />
From this, you can answer the question of which startups should raise venture capital and which ones shouldn't.<br />
<br />
Startups that have a credible potential to be sold or go public for a 10x gain on invested capital within 4 to 6 years of the date of funding should consider raising venture capital.<br />
<br />
Most other startups should not raise venture capital. This includes: startups where the founders want to stay private and independent for a long time; startups where there's no inherent leverage in the business model that could result in a 10x gain in 4 to 6 years; and startups working on projects with a longer fuse than 4 to 6 years.<br />
<br />
Notably, there are many fine businesses in the world -- many of them highly profitable, and very satisfying to run -- that do not have leverage in their model that makes them suitable for venture capital investment.<br />
By leverage in this context, I mean: the ability to make something once (a piece of software, a chip design, a web site) and sell it (directly or indirectly) to a lot of people (1,000 business customers or 10 million consumers) -- which leads to the classic "hockey stick" revenue projection.<br />
Venture capitalists shouldn't, and can't, invest in companies that don't hit these criteria -- not because they're not good businesses but because their own investors wouldn't stand for it.<br />
<br />
There are also many fine entrepreneurs in the world who want their companies to stay small, or who don't want to sell their companies or take them public. That is also well and good, and those entrepreneurs should not raise venture capital.<br />
<br />
On the other hand, a business that is built for leverage that could be sold or go public in 4 to 6 years should strongly consider raising professional venture capital, for three reasons:<br />
<br />
First, you get the cash to invest in the business and grow it at the speed required to realize its full potential.<br />
<br />
It's satisfying to say you don't want to deal with VCs and you want to do it on your own, but if your business has the potential to get big, in my view you should take the cash to invest to make it as big as you can, and that usually requires more capital than you can raise from bootstrapping or from angels.<br />
<br />
Second, you get that cash from a professional investor who invests in this kind of business as her full-time job and reason for existence in the world.<br />
<br />
Most other possible investors in a high-growth startup will be much more difficult to deal with than a professional venture capitalist.<br />
Third, in the best case, you will get help building your high-growth business from the venture capital partner you take money from (but see more on this in Part 2).<br />
When a venture capitalist turns you down, it isn't personal and it isn't (usually) because she's stupid. Instead, it's often for one of these reasons:<br />
One, she can't see the leverage -- she can't see you getting to a sale or IPO with a credible prospect of a 10x return within 4 to 6 years. If she can't see this, and 10 of her peers at other firms can't see it, then you may want to revisit your fundamental business model assumptions and try to understand what's missing.<br />
<br />
Remember, it's in her best interest to see the full potential in your business -- she is looking for high-potential startups in which to invest.<br />
Two, she thinks that what you're doing is too early or unproven.<br />
This is the one that drives entrepreneurs nuts. Isn't the whole point of venture capital to make risky investments in unproven technologies and markets?<br />
<br />
Unfortunately, that's life -- sometimes things are simply too early for venture capital. In that case, develop your idea further with bootstrap or angel funding and then take it back to the VCs later with more proof points.<br />
<br />
Three, she isn't convinced that you've assembled the right team to go after the opportunity. This usually means she doesn't think your technical founder(s) are strong enough, or she doesn't think your founding CEO is strong enough. Again, it's in her best interest to see the potential in the team if it's there -- so if she and 10 of her peers pass on your startup because of concerns about the team, then you may want to rethink your team.<br />
There are many other reasons in addition to these that a VC may pass on your investment that have nothing to do with you:<br />
<br />
She loves it but she can't talk her partners into it -- which happens.<br />
She's fully committed and doesn't have time to take on a new opportunity.<br />
It would require travelling and she can't or won't do that.<br />
You're in a market she doesn't know much about.<br />
Or, she had a bad experience with a similar investment in the past.<br />
The frustrating part is that she won't always tell you why she's passing -- in large part because she wants to keep the door open to investing at a later date if things change (i.e. if it becomes clearer that you have a home run on your hands).<br />
<br />
So where does that leave us with our understanding or belief in venture capital as a real opportunity for entrepreneurs through which to reach the dizzy highs of success. I'm guessing that although you may have found this article fairly interesting your original perception on the effectiveness of <a href="http://www.caban.co.za/">venture capital</a> has largely been unmoved.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-15884428970474831752011-03-24T08:53:00.000-07:002011-03-24T08:53:10.760-07:00Venture Capital as a career opportunitySome of you reading this blog over the past year or so may be starting to see <a href="http://www.investorsnetwork.co.za/">Venture capital </a>as an attractive career opportunity. You may be thinking, I love business, Ive written a <a href="http://www.sabusinessplans.co.za/">business plan</a> and s<a href="http://www.investorsnetwork.co.za/">ourced business finance</a> myself, I like money and I like helping others, why not join the three and become a Venture Capitalist. Well as interesting and attractive an opportunity this may be seeming at the moment, you have to realize that the competition is tight and the opportunities are few and far between. Still, being the ambitious and talented individual you are, this will, I'm sure, not put you of in the slightest. So if you are still reading this, here are a few useful steps to consider.<br />
<br />
Find your niche market<br />
Venture capitalists are unique for what they do. They define markets. They set investment goals and they adjust their decisions on a combined set of skills that match their insight. If you were to join an investment bank, you would most likely be asked to implement predetermined investment policies to support the company’s mission statement. Venture capital does not work like this. As a venture capitalist you would have to place money in a high risk – high growth company for a specific period of time and expect a return on your investment either by public placement or by selling the company to another owner. Therefore, you have to be able to identify new market opportunities and companies that can add value to your portfolio on a long-term horizon rather than blindly follow the investment policies of an investment company. Moreover, you would have to leverage the company’s marketing and sales policies by branding yourself effectively and remaining on the right track.<br />
<br />
Join a start-up organization<br />
<br />
When pursuing a job in venture capital, it is very important to have a start-up experience. If you don’t feel like starting your own company, you may join a start-up organization with full potential to give you valuable insight on what are the necessary steps in the early stages. Working for a start-up company will expose you to venture finance and equip you with all the necessary experience to become a successful venture capitalist in the long run. Besides, your personal insight and passion for the job combined with the institutional investors who will trust your instincts and will agree to take the opportunity you offer to them, can serve as a means for future success in the difficult field of venture capital. All you need at this point is to align your passion with the requirements of the particular industry you will choose to deal with to ensure the greatest long-term benefit from your start-up experience.<br />
<br />
Network, Network, Network<br />
<br />
Networking is extremely important in any kind of job. Particularly, when pursuing a job in venture capital, the value of networking becomes extremely essential. This is because venture capital job opportunities are rarely advertised. Instead, people who already work in a venture capital company are asked to recommend anyone who would be suitable to work for the company. It’s all a matter of trust. Venture capital companies base their recruiting policies first on trust and then on the resume. Therefore, you need to develop a networking strategy and follow it religiously, while adding value to anyone you meet and interact with. Keep in mind that building the right network can help you becoming a venture capitalist possibly in no time. Yet, maintaining your network and keep it growing is what will make you a successful venture capitalist.<br />
<br />
Overall, you should know what you’re asking from a job in venture capital. In 2009, venture investing declined by 30%, fundraising declined by 44.5%. If you think these stats are black and discouraging, you probably shouldn’t considering joining the venture capital industry. On the other hand, if you see clearly that venture capital is still a promising market to invest with high returns, then, by all means, join.<br />
<br />
Moreover, make sure that you know what you profile is. You may shoot for the best firm on the market, but if your profile and insight do not match the company’s positioning and investment decision making, don’t expect returns and dynamic partnerships. Even more, don’t expect to be able to define new markets and propose new strategies because soon you will find yourself to be a misfit in the firm you have chosen.<br />
<br />
Sources:<br />
<a href="http://www.investorsnetwork.co.za/">http://www.investorsnetwork.co.za</a><br />
<a href="http://tutor2u.net/business/finance/raising_finance_venture%20capital.htm">http://tutor2u.net/business/finance/raising_finance_venture capital.htm</a><br />
<a href="http://www.ehow.com/how_2363498_venture-capital-job.html">http://www.ehow.com/how_2363498_venture-capital-job.html</a><br />
<br />
<a href="http://www.marketwire.com/press-release/2009-Venture-Investment-Declines-to-Lowest-Levels-in-More-Than-a-Decade-1105820.htm">http://www.marketwire.com/press-release/2009-Venture-Investment-Declines-to-Lowest-Levels-in-More-Than-a-Decade-1105820.htm</a><br />
<a href="http://www.marketwire.com/press-release/Venture-Capital-Fundraising-Experiences-a-Slow-Start-to-2010-NYS">http://www.marketwire.com/press-release/Venture-Capital-Fundraising-Experiences-a-Slow-Start-to-2010-NYS</a><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-24292212004835686852011-01-17T12:47:00.000-08:002011-01-17T12:47:14.492-08:00Finding a Venture Capital Firm that suits your needsIf you look at where entrepreneurs come from then you will find that most wold previously been in permanent employment from where business ideas, business experience and eventually a <a href="http://www.sabusinessplans.co.za/">business plan</a> may come from. Yes of course graduate entrepreneurs are becoming more commonly found today with entrepreneurship as an career becoming more and more popular and <a href="http://www.investorsnetwork.co.za/">business finance</a> becoming more readily available.<br />
<br />
As with many things that are worthwhile doing, the field of entrepreneurship is not smooth sailing.<br />
<br />
You have to come up with a feasible business plan before embarking on looking for funding from to enable you convert the idea into action.<br />
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Having drawn your business plan, you should shortlist investors to approach for funding since getting access to a bank loan for your start-up may not be easy<br />
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This is advisable if you are devoid of savings to pump into the business idea and choose to rely on external sources to roll out the idea.<br />
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<b>Selling business idea</b><br />
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But before you start selling your business idea, you need to decide whether you want to work on the notion and grow it into a big business venture or you want to sell the idea to a business entity.<br />
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Many prospective businesspeople are often undecided on the two choices and as a result end up losing their dream of entrepreneurship.<br />
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Others come up with feasible business plans to sell to potential employers in order to secure employment. <br />
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For instance, a young entrepreneur could developed a feasible business plan of an innovative mobile technology and sell the idea to mobile phone company in return for employment or partnership.<br />
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Ultimately, this leads to loss of entrepreneurship energy as the idea owner losses control once he is offered employment.<br />
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On the other hand, selling a business plan to a rival company in search of funds has left many budding entrepreneurs in regrets as they see their business plans copied without them getting any reward. <br />
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If you are convinced that you want to roll out your business plan and grow it into a big business venture, then the venture capital market would be your stop point.<br />
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Here, you can shop for investors interested in buying your business idea and grow it. <br />
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<b>Competitive nature</b><br />
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Owing to the competitive nature of the venture capitalist market, it is essential for an entrepreneur to do proper research and identify the right investor before packaging the business plan for implementation. <br />
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Just like doing prior research on a potential employer helps guide a job seeker on where his services could be of value, proper research guides a budding entrepreneur on the choice of the right venture capitalist.<br />
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Sending applications arbitrarily in search of funding, without proper research, is a futile effort that can never yield any response let alone results.<br />
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This is analogous to a pilot making unsolicited job applications to manufacturing firms that have nothing to do with aviation.<br />
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However qualified the pilot could be, his applications can never sell to personnel managers of manufacturing firms.<br />
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To identify the right venture capitalist firm, you need to do proper research on the following; <br />
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First, research on the venture capitalist’s industry focus in relation to your line of business.<br />
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Most venture capitalists tend to focus on specific industries or sectors and exclude others.<br />
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Try to enlist only those firms that lay focus on the industry within which your business plan is anchor to stand a chance of being considered. <br />
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The second criterion is the geographical preference and proximity to the venture capitalist.<br />
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Try to limit yourself to venture capitalists that have preference for funding business plans from your continent, country or even province.<br />
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Venture capitalists often earmark their geographical areas of concentration.<br />
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If you don’t lie within their area of preference, your application may be in vain.<br />
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<b>Late-stage investing</b><br />
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Third, you need to unravel their stage-of-development bias.<br />
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Do they provide seed capital or are they only interested in late-stage investing?<br />
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If you are a start-up, its appropriate to single out venture capitalists that provide seed capital. <br />
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Fourth, what amount of capital do you need for your business plan and what is the range of capital investment of the venture capitalist?<br />
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Most of the investors have set low limits of the size of investments that they can consider sponsoring. <br />
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For instance, a firm may state that they only fund business plans that require a capital size of between R1 million to R100 million.<br />
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If your project lies outside this range, it is advisable not to approach them. <br />
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<b>Revenue potential</b><br />
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You must resist any temptation to inflate the amount of capital that you require to match their capital range as you would encounter some difficulty later when you are called upon to demonstrate the feasibility of the project and its revenue potential. <br />
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Upon settling on a selected number of targeted venture capitalist firms, try to do a background check on the type of investments that the firm has made.<br />
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This can help you identify whether your business plan could be a duplication or slightly similar to an investment the targeted venture capitalist firm has explored. <br />
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Once prepared, you can now approach your targeted venture capital firms or go to a<a href="http://www.investorsnetwork.co.za/"> investors network event</a> where you can start meeting <a href="http://angelinvestorsa.blogspot.com/">business angels</a> and <a href="http://venturecapitalsa.blogspot.com/">venture capital partners</a>.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-72548461027690917582010-12-04T04:52:00.000-08:002010-12-04T04:52:50.012-08:00What Venture Capital investors look for in investment opportunities<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;"></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">With banks increasingly risk averse especially when it comes to financing the <a href="http://www.sabusinessplans.co.za/">business plans</a> of entrepreneurs and small firms, both individuals and businesses alike are turning to <a href="http://angelinvestorsa.blogspot.com/">business angels</a> and venture capital firms to provide the <a href="http://www.investorsnetwork.co.za/">business finance</a> for their new or growing businesses. But of course these funding options with all its benefits of both finance and experience being pumped into the business may not always be easy to find and you need to be sure that you are an attractive option for them to consider.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">In a recent article on his blog on , <a href="http://memeburn.com/author/brettcommaille/">Brett Commaille</a> analysed why Venture capitalists and entrepreneurs often don’t see eye-to-eye, and in South Africa in particular, there seems to be a very real gap in meeting the needs and expectations of both parties.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">While we know the path of the entrepreneur can be a frightfully fun but rocky one, at some stage venture capital becomes a real option to consider, and when you get to that stage, make sure you know exactly what we are looking for.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">As funders, we really look for four basic things and your pitch must answer the following:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">1. What is the burning need you are taking away? Is it a widespread problem and thus a big market?</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">2. What is your solution or product? What are the competing solutions, your differentiators and the barriers to entry for a new competitor?</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">3. How does it make money? You need to know this upfront, what is your realistic plan to monetise?</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">While you present these 3 points, we are evaluating the 4th aspect which ties all 3 together and is the key to the success or failure of the proposed business:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">4. The entrepreneur. Do you have a realistic actionable plan, and who is the team that will assist you to implement it?</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">What you need to do to greatly improve your chances of success:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Get an introduction – a recommendation from a businessman the funder knows gets the needed attention and improves your chances of making it through the first round of discussions.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Check the funder’s criteria (usually on their website) – make sure your are pitching something that the funder is looking for.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Make sure your demo works - getting this wrong wastes time and puts you on the back foot.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Talk of your past successes – especially how you made money for your previous shareholders.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Keep to a few slides - there will be questions and interruptions; you need to get your concept across in minimal slides.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Have an actionable business plan.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Be real – be honest and straightforward.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Identify the risks – don’t ignore or brush aside the risks; clearly identify each major risk and how you plan to deal with them.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Know your industry metrics.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Focus – don’t try to sell a hundred solutions, what is your core solution/product?</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Avoid these common pitfalls</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“These projections are conservative”.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">This statement is meaningless – projections are always estimates. Rather give specific steps of how you wish to achieve specific targets.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“A ‘Famous Expert/Big Consultancy’ says the market will be worth $50bn in 2 years”.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Also a meaningless statement.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“All we have to do is get 2% of the market”. </div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Rather show specific steps to reach specific target customers.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“No one else is doing what we are doing”. </div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">This is a problem if it is true (there may be no market) and a problem if it isn’t (you are demonstrating naivety with regard to defining competition)</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“The giant is too big or slow to be a threat”.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Never write-off the existing dominant player.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“It will take them years to copy”. </div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Once you’ve proved it can be done, copying it is far easier than you think.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">“Several VC firms are interested”.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Markets are too small to try this ploy. Negotiate honestly.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Never take advice without testing it.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Never argue – it’s pointless.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Avoid jargon – you risk losing your audience.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Finally, remember the following:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">While a strong business model is essential</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">The key element is you</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 5px; padding-left: 0px; padding-right: 0px; padding-top: 5px;">Be passionate and enthusiastic, and make us believe you can deliver on your plan</div><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-89187146654307465342010-12-02T07:46:00.000-08:002016-08-09T08:57:20.469-07:00South African VC Numbers IncreasingFrom an entrepreneurial perspective, few things are more refreshing than to hear of the increasing amount of venture capital deals investing in <a href="http://www.ukbusinessplanning.co.uk/">business plan</a>s in South Africa in recent months. With a large amount of <a href="http://www.caban.co.za/">business investors</a> already being active in the country entrepreneurs looking to fund their <a href="http://www.ukbusinessplanning.co.uk/">business plan</a>s will take heart from the fact that despite the slow down in bank lending VC's are filling the gap.<br />
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Following a a recent article in <span class="Apple-style-span" style="font-family: "times new roman"; font-size: small; line-height: normal;"><a href="http://www.fm.co.za/">http://www.fm.co.za</a> </span>The global recession is probably the best thing that could have happened to the local venture capital sector. Under pressure to rebuild their portfolios, global funders and wealthy locals are now redirecting money towards the sector as an alternative investment that promises higher yields.</div>
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The global recession wiped out millions from individual portfolios and the number of dollar millionaires fell by more than 11%, according to the 2010 Knight Frank Wealth Report. With trading conditions in global markets still uneasy, overseas funders are now willing to take on more risk for bigger rewards and are investing in businesses that can demonstrate growth.</div>
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PoweredbyVC, a fund manager that manage s Internet billionaire Mark Shuttleworth’s HBD Venture Capital, is in negotiations with several foreign funders to provide venture capital for business start- ups. Its executive director, Keet van Zyl, declines to name them.</div>
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Venture capital is seen as risky because investors don’t know who they’re taking a gamble on, and they have to wait at least five years to get returns. The yields, however, are generally better than those gleaned on the general market, which has been patchy since the financial crisis. Investors can expect a minimum annual return of 20% from a venture capital fund. By comparison the R157 bond had a yield of 14,6% for the year, in a favourable bond market.</div>
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SA Venture Capital & Private Equity Association (Savca) executive head JP Fourie says a move into riskier investments in uncertain times is not unusual. As the economy contracts, investors start looking for alternative investments because traditional portfolios are underperforming. A soft economy also plays some role in driving innovation. “Investment patterns regarding venture capital appears to be contra cyclical,” Fourie says — when the market is down, you buy and when the market is up, you sell.</div>
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With funders lining up — for example, an individual who wants to invest up to R20m in start-ups — the venture capital industry should add to the momentum it has steadily been building since the 2001 dot-com crash.</div>
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There are now 10 venture capital funds — up from five a few years ago — which have invested R2,6bn over the past 10 years. A Savca report, to be released at month-end, has found that the 33 funds surveyed had completed 251 venture capital transactions between 2000 and July 2010, of which about a third were concluded in 2008 . Some of the funds surveyed don’t exist anymore, and some are run by large corporations that are not members of Savca.</div>
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Ploughing money into venture capital funds requires bravery and patience, however. Such a fund puts together a portfolio of about 10 start-up businesses, which might fail or plod along over five to 10 years. The one or two companies that do perform exceptionally are either sold or listed. This is when the investor gets a return.</div>
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The local venture capital industry’s return on investment has yet to be established, because investors have not exited their investments. But that could change soon . PoweredbyVC is looking to exit two . Its portfolio includes the highly rated mobile payment provider Fundamo and Internet marketing group Clicks2Customers. Fundamo CEO Hannes van Rensburg declines to comment on whether his company is for sale.</div>
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Wealthy individuals are not being scared away by the long periods it takes for a fund to exit an investment. Over the past year PoweredbyVC has been approached by at least 30 people willing to invest R1m and more in new ventures.</div>
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These investors also take a hands-on approach . Many are retired executives and business owners with some free time who come in as consultants to the new ventures .</div>
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Demand by these wealthy people has been so huge, PoweredbyVC will be launching an “angel” investment fund to support businesses in the early stage of development.</div>
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But those with funding proposals should not think the new wave of local funders will be sugar daddies who can easily be tapped for cash. “It’s not an angel lottery. They are quite savvy,” says Van Zyl. He says that in addition to the growth in funders, there has also been a spurt in funding proposals.</div>
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But the increase in proposals does not necessarily mean more ideas will be taken up, because there is often a lack of experience when it comes to turning the concepts into products. Van Zyl cites the example of a 26-year-old “who had a fantastic [concept] but no idea how to commercialise it”.</div>
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Cape Town and Stellenbosch, in particular, have become home to many of these new funds. Hasso Plattner Ventures Africa was established two years ago, 4Di Capital was set up with funding from Johann Rupert a year ago and Invenfin was spun out of Remgro, also a Rupert group. The Savca survey found that Cape Town received more venture capital money than Johannesburg or Pretoria. Other funds, like HBD and Bioventures, have been going for even longer.</div>
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The Cape does not have a monopoly on venture capital funds, though. The Industrial Development Corp has set up its own fund, and it and Triumph Venture Capital are based in Johannesburg.</div>
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The optimism in the sector is palpable. “If I were a highly qualified person in banking and finance, I would be here [in venture capital],” says 4Di Capital CEO Justin Stanford.</div>
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The sector might be back in vogue, but it has been criticised for not embracing riskier ventures because the people managing these funds came from a banking or an accounting background and do not fully grasp what it takes to start a business. Van Zyl admits there is some truth to this. “You can see that by the lack of failure. Investments are doing fairly well, or just surviving.” By comparison, about half of all venture capital projects in the US fail.</div>
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But having a background in banking or accounting does not necessarily make a fund manager overcautious. “I left banking because I got tired of saying no to good deals,” says Invenfin CEO Brett Commaille.</div>
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Though the sector is blossoming, the old bugbear of exchange controls hangs over it . Shuttleworth has long crusaded for exchange controls to be relaxed, and recently asked for a judicial review on the constitutionality of their mechanisms . Shuttleworth, who made US$575m selling his company Thawte to US firm VeriSign, argues that the controls burden entrepreneurs who want to expand abroad because there seems to be a “random process” at the Reserve Bank for allowing money out of the country. Shuttleworth emigrated to the UK in 2001, and says living there gives him the flexibility to move small amounts of money around the world.</div>
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Fourie also says exchange controls are a problem, as they prohibit the existence of a “loop structure”, preventing South Africans from having holdings in a foreign entity that in turn has a holding in SA. This makes it difficult for small companies that are rapidly expanding globally to transfer cash. Some local business owners have sold their holdings prematurely as a result.</div>
<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-17052638379263582192010-11-21T10:47:00.000-08:002010-11-21T10:47:10.406-08:00Twitter is fund raising<a href="http://www.twitter.com/">Twitter</a> is looking to raise <a href="http://www.investorsnetwork.co.za/">business investment </a>of more than $100 million after valuing the company at $3 billion.<br />
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TechRadar reports that Russian technology investment firm, DST global is seeking to lead the funding round for the platform. <br />
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Twitter currently has over 175 million users and last year introduced a limited ad revenue model catering to around 40 advertisers.<br />
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Twitter founder Evan Williams said that the company has purposely kept its revenue model small to test and gain feedback from advertisers and users.<br />
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The company currently sells promoted tweets in Twitter search results, which appear in the promoted trends section.<br />
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Last year Twitter raised $100 million from investors like Insight Venture Capital, Spark Capital and mutual fund behemoth T Rowe Price, who then valued the company at $1 billion.<br />
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Williams also indicated that his company is in talks with Facebook for finding new ways for the two companies to work together. He also mentioned the company has managed to ink deals with Google, Microsoft and Yahoo.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-12357773184894152632010-11-21T10:41:00.000-08:002010-11-21T10:41:39.108-08:00Is distance an obstacle to venture capital?Is it possible to get <a href="http://www.investorsnetwork.co.za/">business financing</a> from top investors if you have a <a href="http://www.sabusinessplans.co.za/">business plan</a> focussed on a venture outside Silicon Valley? If you land venture or <a href="http://www.investorsnetwork.co.za/">angel investments</a> from remote investors, expect to go back to investors often with an updated <a href="http://www.businessplanwhiz.com/">business plan</a> for more rounds of cash. A recent study by Indiana University finance professor Xuan Tian found that entrepreneurs who raised capital from investors located more than 25 miles away were forced to raise smaller amounts, with a shorter duration between each fundraising round, than those with nearby investors.<br />
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Comparing 28,000 venture-backed companies who raised funds between 1980 and 2006, Tian studied whether venture firms could use technology to monitor investments just as well from a distance. “We saw that visiting a company day to day made a real difference, and investors were willing to write bigger checks if they could do that,” he says. From Tian’s research, venture firms don’t necessarily abide by the so-called 20 minute rule, where venture capital firms typically want to invest in startups located within a 20 minute drive of their office, but a greater distance does make a VC hold on tighter to its purse strings. On average during this time period, firms raised 3.6 rounds of financing with 20 months in between rounds and $72.7 million in total.<br />
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Fundraising clearly takes a significant amount of time and money in fees, so Tian was surprised to see that firms with remote backers actually performed somewhat better overall when they raised more rounds of financing. To calculate performance, Tian looked at whether firms would go public and if they did, whether or not they delisted within three years. For entrepreneurs with investors more than 25 miles away, one extra round of financing meant they were 5% more likely to go public and 0.1% more likely to remain public three years later. Though Tian’s research stopped as of 2006, from perusing more recent data, he says he would expect the same trends to to continue now.<br />
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Tian studies entrepreneurs who successfully landed remote funding. How likely are entrepreneurs outside of major venture hubs to get VC and angel investments in the first place? The majority of venture funding, roughly 63% of $5.4 billion in the third quarter of 2010, was funneled into California, New York and Massachusetts, according to research firm CB Insights. That’s down from 65% of second quarter 2010 deals and 70% of 2Q funding.<br />
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This week on his blog, Fred Wilson, a partner at Union Square Ventures, a New York early-stage venture firm, outlined the number of startup he’s invested in outside of New York, San Francisco, Europe or Chicago: ZERO out of 37 investments since 2004.<br />
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“We are focused on one thing, internet services of scale, and are wiling to travel to find them,” writes Wilson, whose startup investment lineup includes Foursquare, Meetup, Tumblr, and Zynga. Still, he admits that he only has a certain amount of time and generally traverses pre-ordained routes to find and see his startups. Wilson hasn’t counted out going elsewhere, noting that he goes to Boulder and Austin regularly and sees “opportunity in Seattle, LA, Boston, DC, Chicago, Toronto, and elsewhere.<br />
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Still, since venture capital returns aren’t giving too many managing directors private jets, most angels and VC can only go so many places so often so proximity to investors or at least proximity to an easily traveled route helps.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-8281319779797683812010-10-05T08:40:00.000-07:002016-08-09T08:59:36.715-07:00Global Venture Capital Firms Target South African BusinessesA South African Venture Capital fund is in a big money bid, hoping to invest in the <a href="http://www.ukbusinessplanning.co.uk/">business plan</a> and development of Neotel.<br />
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A South African consortium currently leads a $455.5 million <a href="http://www.caban.co.za/">venture capital investment</a> bid, hoping to clinch the deal in the next few months</div>
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Big companies are now aggressively targeting South African <a href="http://www.sabusinessplans.co.za/">business plan</a>s. Top economies of the world are turning their eyes to the region. Why? Because there are lot of investment opportunities there and a growing potential for a successful market. This makes South Africa an interesting target for venture capital firms.</div>
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New technologies and good communication are two of the strong fields where things can stir up rapidly. We can figure this out only by looking at figures. Internet penetration was only 10.8% in 2009. The costs for a 1 MB bandwidth are huge, even 100 times more than in US. Still, the demand is high and people’s need for communication is increasing every day. The proof: companies from the mobile industry are doing well and mobile Internet usage is increasing mostly in the urban areas. There is plenty of room for businesses to grow and for venture capital firms to invest.</div>
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One good example is Neotel, one of the largest network providers in South Africa who raised a $455.5 million loan from a local consortium to develop their network. Google, Microsoft or Intel who recently signed a deal with MTN Group, made their moves. As other emerging markets experiences showed, the presence of big names is building trust for other businesses to come and raise the needed money for the development of new projects.</div>
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Other industries are in demand for investments, for example: mining, constructions or even software development, all of them looking for five or ten figures funds. 10 South African startups are on the short list of Seedcamp for Seedcamp Week in London this year. Companies like 10Layer, FloCash or Obami have the chance to receive $30-50,000 as a first boost for their development. On the other end, Motjoli, a mining company is seeking for $1,5 billion to develop an Iron Ore Project close to Zwaziland.</div>
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These are just a few examples but there are many more out there. Actually, some of the local investors are really complaining that venture capital firms in South Africa are not so active as they would need and that local investors do not have always the force to support all industries and projects, even if there are positive examples like Evolution One Fund who recently announced they raised $94 million to invest in clean technology businesses.</div>
<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-27458356022807640602010-09-15T08:16:00.000-07:002016-08-09T08:59:50.608-07:00New Private Equity Initiative for SMEs<div style="font-family: Arial, sans-serif; font-size: 14px;">
Great news for SMEs looking for start-up or <a href="http://www.caban.co.za/">growth finance</a> is that another new initiative, this time through private equity firm Trinitas is injecting further finance into promising <a href="http://www.ukbusinessplanning.co.uk/">business plans</a>. The company has raised R430m to invest in high cash-generating businesses and wants to increase this to as much as R1bn in the next 12 months.</div>
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Executive director Andrew Hall said yesterday Trinitas had been raising funds for the past 18 months, in one of the "toughest ever environments" because of the global crisis.</div>
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It had found investors who were convinced there was value in the company's business model, which is focused on mid- capitalised companies.</div>
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Trinitas Private Equity is being run by private equity experts John Stipinovich, Soteris Theorides and Mr Hall, who were also shareholders in the fund. Other shareholders are Sasfin and the black women's empowerment group Peotona, which has a 25% stake.</div>
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At its first closing in March, Trinitas Private Equity had raised R430m from five local investors from sectors such as banking and pension funds.</div>
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"We are happy with the level of interest by investors and ideally we want to raise more money and the fund is open for another 12 months to raise between R750m and R1bn in total, including the R430m we have raised," Mr Hall said yesterday.</div>
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Trinitas would focus on companies with enterprise values of between R150m and R1bn, because it believed companies in this segment had greater opportunity to create value for investors, including achieving organic growth in their sectors.</div>
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Mr Hall said the fund would invest from R50m to R150m over three to seven years in virtually any sector as long as it made business sense, particularly from a cash generation perspective. But mining was excluded because of its highly cyclical nature.</div>
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It had already invested R50m in a personal care and cosmetics manufacturer, Le Sel Research, a company based in Midrand and which makes products for customers such as Woolworths, Unilever and Aspen .</div>
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There were opportunities to invest, particularly in companies where management wanted to buy out the owners, or those in which the owners wanted additional capital and did not mind their shareholding being diluted.</div>
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Mr Hall said the recession had exposed small and medium-size companies who had overborrowed or expanded without any strategic intent, adding capacity which became idle overnight as demand collapsed. " Even when things are going well, it is better to keep the business lean," he said.</div>
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Source: <a href="http://www.businessday.co.za/">Business Day</a></div>
<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-24961238883004312442010-09-15T08:06:00.000-07:002010-09-15T08:06:16.719-07:00IDC may issue bonds to boost equity finance<div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Great news for South African entrepreneurs and new businesses with <a href="http://www.businessplanwhiz.com/">business plans</a> waiting to be financed, is the information coming through today that South Africa's Industrial Development Corporation (IDC) may issue bonds and dispose of 26 billion rand worth of its stake in listed firms to raise money for new investments, its CEO said on Tuesday.<span id="midArticle_byline"></span></div><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">With regular banks in the country still not lending at the level required to stimulate the small business sector and especially new businesses starting up, the government wants to support the growth amongst entrepreneur with a much needed cash injection.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_0"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">The state-owned development finance institution has been tasked by government to invest in the private sector to support economic growth and stem job losses after last year's recession.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_1"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">The IDC lends to medium-sized businesses at more favourable rates and terms than commercial banks.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_2"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">In a presentation to lawmakers in parliament, chief executive Geoffrey Qhena said the company needed 9 billion rand capital injection by 2015 to keep its equity/debt ratio below 60 percent and it would consider new sources of funding such as bond issuances.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_3"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">"IDC's ability to attract other investors to projects and thus leverage more private sector investments could reduce its funding needs," he said.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_4"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">"In the base case, IDC would need to raise 53 billion rand of borrowings (64 billion rand in the high road scenario)," he said, adding the company would dispose of 26 billion rand worth of shares it owned in listed companies.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_5"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">The IDC who last year approved 1.4 billion rand in loans to companies distressed by a global and local recession has targeted the bio-fuels, automotive and energy sectors for investment and set aside 3.2 billion rand for 2011 to help companies hit by a recession.</div><span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 13px; line-height: 15px;"><span id="midArticle_6"></span></span><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Last year it approved 1.4 billion rand in loans to companies distressed by a global and local recession.</div><div style="font-family: verdana, helvetica, sans; font-size: 13px; line-height: 15px; margin-bottom: 1em; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Source: <span class="Apple-style-span" style="font-family: arial, helvetica, sans; font-size: 11px; line-height: 13px;">Thomson Reuters</span></div><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-36966540671092882392010-07-31T04:12:00.000-07:002010-07-31T04:12:02.748-07:00How to write a faster business planFor many entrepreneurs, <a href="http://www.businessplanwhiz.com/">writing a business plan</a> is a tedious process. Entrepreneurs are often more contempt with being practically involved overcoming real challenges than sitting down and writing a 30-40 page document. Unfortunately, a comprehensive business plan will almost always be a requirement from <a href="http://www.investorsnetwork.co.za/">Venture Capital firms</a> as it will allow them to get more of an insight into the issues present within the business business.<br />
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<div style="font-family: arial, sans-serif; font-size: 13px;">Before starting writing your business plan, do the research. Find out if there is a market for your product or service. See whether you are capable of filling that market, and that it is realistically profitable. You may discover challenges that will force you to rearrange your idea before spending weeks constructing a business plan.</div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong><br />
</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong>Focus on Profitability</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;">If investors and lenders are to be attracted to your business plan, you must show:</div><div style="font-family: arial, sans-serif; font-size: 13px;">that your competition is large and plentiful, proving you operate in a large and growing industry<br />
that you can outmaneuver that competition by niche marketing and setting up barriers to entry</div><div style="font-family: arial, sans-serif; font-size: 13px;">Many entrepreneurs make the mistake of claiming they have no competition. This may or may not be true in your case, but investors don’t believe in one-business industries. Healthy competition is evidence that your industry is growing, which allows your business to grow within the industry.</div><div style="font-family: arial, sans-serif; font-size: 13px;">The paradox is that you must show you can overtake said competition somehow. You can do this by proving a) you have identified and can master a niche market within that industry, and b) you have created barriers to entry (e.g., proprietary technology, exclusive information, a unique management team, etc.) This shows that your company is the only one equipped to fill the market need.</div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong><br />
</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong>Logic is a key for a investment winning Business Plan</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;">A business plan is essentially a logical argument for why and how a business will succeed. The logic is as follows:</div><div style="font-family: arial, sans-serif; font-size: 13px;">1. Opportunity: There is an unmet market need.<br />
2. Resources: Your business has the resources to fill that need.<br />
3. Methods: Explain how your resources will be used to fill the need.<br />
4. Results: Show how you and your investors will profit from the way your business uses its strengths to fill an unmet market need.</div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong><br />
</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong>Financial Assumptions: Spell It Out, From Seed to Exit</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;">The imagination of the investor is where fundraising efforts go to die. Do not let them imagine. Show your figures. Explain revenue and cost projections, from the start of your business all the way through the liquidity events that will benefit the investors. Use industry research and case studies to support your pro forma (projected) financial assumptions.</div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong><br />
</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong>Just Say No to Format Creativity</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;">As sure as there is grammar in an English sentence, every business plan has a standard format. That format, in this exact order, is:</div><div style="font-family: arial, sans-serif; font-size: 13px;"></div><ol><li>Executive Summary, </li>
<li>Company Analysis,</li>
<li>Industry Analysis,</li>
<li>Customer Analysis, </li>
<li>Competitive Analysis, </li>
<li>Marketing Plan, </li>
<li>Operations Plan,</li>
<li>Management Team, </li>
<li>Financial Plan, </li>
<li>Appendix. </li>
</ol><br />
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</div><div style="font-family: arial, sans-serif; font-size: 13px;">Yes, you can be creative in the content of your business, and the ways in which you go about marketing and running operations. Creativity is what allows entrepreneurs to win. But the format of the business plan must be absolutely adhered to.</div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong><br />
</strong></div><div style="font-family: arial, sans-serif; font-size: 13px;"><strong>Want to finish your business plan faster? <a href="http://www.businessplanwhiz.com/">Click here</a> to gain access to the latest in<a href="http://www.businessplanwhiz.com/"> business plan software</a> to write for a faster and much more efficient business plan.</strong></div><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-65542659687586249802010-02-20T08:03:00.000-08:002010-06-19T05:00:59.052-07:00Find financing by searching cleverly<div class="MsoNormal">Although South Africa’s economy is already showing<a href="http://www.bizcast.co.za/2010/02/22/sa-leading-economic-indicator-136-yy-vs-11/"> strong signs of growth </a>and the economical difficulties of 2009 starting to feel like a distant past, may entrepreneurs are still finding it difficult to secure <a href="http://www.investorsnetwork.co.za/">business financing</a>. This, however does not have to be the case and as long as your <a href="http://www.sabusinessplans.co.za/">business plan</a> supports you and your feasibility study has shown that they there is potential in your market, as the saying goes, search and you shall find. To put it more poignantly, perhaps we can say, search cleverly and you shall find!<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Here are a few things that you can do to ensure that you are indeed searching cleverly:<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b>Pick your Market</b><o:p></o:p></div><div class="MsoNormal">The market is probably the most important factor driving the success of the start-up market as a whole. If there is a strong demand from your target market, even a just adequate product can succeed, as the “market pulls the product out of the start-up.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The reverse is seldom true. Even great products often don’t succeed in tough markets, and very rarely do they create new markets. So pick not only your battles, but also pick your battlefield.<o:p></o:p></div><div class="MsoNormal"> </div><div class="MsoNormal"><b>Show Momentum</b><o:p></o:p></div><div class="MsoNormal">Unless you’ve invented a way to turn lead into gold, these days you must show paying customers or enthusiastic users to prove your value to potential investors.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">There are several indicators you can point to in order to demonstrate that your business has real market traction:<o:p></o:p></div><div class="MsoNormal"></div><ul><li>New customers/beta testers (do the dogs eat the dog food?)</li>
<li>Short sales cycles (are customers eager to sign on the dotted line?)</li>
<li>Renewal rates (once customers use the product/service, do they come back for more?)</li>
<li>Press coverage (do you have positive write-ups in the press?)</li>
<li>Testimonials (are your customers willing to testify just how your product solves their problems)</li>
<li>Believe in your team</li>
<li>It has become cliché to emphasize the importance of people as being crucial to the success of an endeavour. But in a start-up, the importance of having a good team is not nice to have – it’s a necessity.</li>
</ul><o:p></o:p><br />
<div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b>Work with the right people</b><o:p></o:p></div><div class="MsoNormal">Hire people you can trust to do the right thing by your company, as if it were their own, after all it is! Unlike a large organization, there is no room for slackers or primadonnas at a start-up. Make sure you hire people who can envision a broad strategy, and back themselves to execute against it.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">At all times, be wary of “experts.” Experts can tell you how to do something that’s been done before, and do it really well. For sure, this is important in certain situations. But never forget that the whole point of a start-up is to develop new solutions to existing problems.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><b>Find Validation from the doubters</b><o:p></o:p></div><div class="MsoNormal">It is often said that nothing worth doing is ever easy. When you embark upon the roller coaster that is starting a new company, you will find many naysayers who will tell you that it can’t be done. This is actually a good sign--what they really mean is that they don’t know how to do it, and therefore believe that you won’t be able to do it either. Remember, if they did know how to do it, you’d already be too late.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The path of an entrepreneur is more often than not, a lonely one. Few people will be able to see through your eyes. So have a long-term vision that you can clearly explain and around which you can rally your team, and keep you focused during the challenges that inevitably arise.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Back your vision with a firm belief in innovation. Steve Jobs once said that innovation is the single biggest difference between a leader and a follower. As you innovate and your vision takes root in the market, you will often hear cries of denial bordering on protest--which is the most common reaction of a market segment that has been disrupted.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Believe in your idea but also don't be to afraid of change, remember that the market and demand is changing constantly so you may also have to.<br />
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Using the latest in <a href="http://www.businessplandiy.co.za/">business plan software</a> technology can assist you with tracking changes in the market, taking advantage of new business opportunities and help you gain access to business finance fast.</div><div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-45284955706193945732010-01-27T06:48:00.000-08:002010-01-27T06:48:15.014-08:00Choosing a Venture Capital Partner<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_TXhMrnmP3aY/S2BSByCrSiI/AAAAAAAAA9M/8G0lQP5OVGk/s1600-h/book.jpg" imageanchor="1" style="clear: right; cssfloat: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" mt="true" src="http://1.bp.blogspot.com/_TXhMrnmP3aY/S2BSByCrSiI/AAAAAAAAA9M/8G0lQP5OVGk/s200/book.jpg" width="133" /></a><br />
</div>Finding the right <a href="http://www.investorsnetwork.co.za/">venture capital fund </a>to support you wityh your business may be a challenging task. There are 10,000 venture capitalists and only top 1% are any good. Be smart about smart money and learn from the top 1%. <br />
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What do some of <a href="http://www.savca.org.za/">South Africa's best venture capitalists </a>have in common? How do they consistently obtain supernormal returns? How do they add value to entrepreneurs they have backed? Venture capital is an art as well as science and the best way to learn it is from successful masters.<br />
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<a href="http://www.kalahari.net/books/The-Way-of-the-VC/632/34543013.aspx">The Way of the VC - Top Venture Capitalists on Your Board </a>is essential reading for venture capital practitioners, including partners, principals, analysts, consultants and limited partners – both institutional and private. It could also prove useful to students of finance who want a better understanding of what goes on in the venture capital world.<br />
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<a href="http://www.sabusinessplans.co.za/">Venture Capital funds</a> are the fastest growing sector of the financial industry, and possibly the least understood. In this book, author Tan Yinglan provides a primer on what some of the world’s best venture capitalists have in common. How do the world’s top venture capitalists consistently obtain supernormal returns? How do they add value to entrepreneurs they have backed? Why is a top venture capitalist like a skilled chef? <br />
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The Way of the VC shows you what premier VC firms such as Kleiner Perkins, Draper Fisher Jurvertson, and Flagship Ventures look for in winning ventures and how they offer venture assistance, and how every entrepreneur can benefit from learning leading-edge techniques. <br />
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The Way of the VC offers you: <br />
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A “silver bullet” technique in near-perfect communication with VCs <br />
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A guide to coaching start-ups effectively <br />
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The ultimate entrepreneurial development manual <br />
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Insight and advice acquired by interviewing dozens of top-tier venture capitalists <br />
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An easy read <br />
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Translating what really goes on in a venture capitalist’s mind into structured processes that readers can use to promote their own ideas, this book will be an illuminating read for venture capital practitioners, including partners, principals, analysts, consultants and limited partners – both institutional and private.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-72525390905677434932009-12-02T07:34:00.000-08:002016-08-09T08:58:57.589-07:00Venture Capital Focus on Growing Firms Says Shuttleworth'Venture capital is better spend on existing and growing firms' This is the opinion of South African <a href="http://www.caban.co.uk/">venture capital</a> company <a href="http://www.hbd.com/">HBD</a>, which is still strongly associated with information-technology entrepreneur Mark Shuttleworth. The organisation expects to have disbursed some R100-million by year-end as part of its second fund, launched in late 2006.<br />
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CEO Julia Long tells <a href="http://www.engineeringnews.co.za/">Engineer-ing News</a> that it is currently interrogating several potential investment opportunities, mostly in high-technology companies, but not necessarily information-technology enterprises.<br />
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Its so-called ‘<a href="http://www.hbd.com/">HBD</a> Fund2’ will run for two years, with Shuttle-worth having made some R150-million available to the initiative. However, Long says it is possible that more than R150-million could be disbursed over the period, citing a possible investment figure of R200-million.<br />
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Unlike the initial HDB fund, or ‘Fund1’, which focused on pure start-up-type enterprises, the current facility is seeking to finance more “mature” businesses that already have products, services and customers.<br />
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Long says the idea is to fill a gap in the South African capital market by offering equity funding to enterprises that are keen to either accelerate domestic growth or embark on an internationalisation endeavour.<br />
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Given this greater level of maturity, the size of the investment tranches has also been raised to between R10-million and R25-million – Fund1’s limit was set closer to R10-million. “By contrast, the companies we financed between 2000 and 2005, when Mark set aside R70-million for venture capital, were generally at a far less developed stage, some even at the concept stage,” Long explains.<br />
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She argues that there is still a desperate need for ‘angel investors’ to support start-ups, but that, following a broad-ranging analysis of the South African environment, HBD (short for ‘Here Be Dragons’) decided there was greater opportunity and less risk slightly further up the value chain.<br />
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She says the fund is open to just about any sector, excluding direct investments into real estate and agriculture, and hints to the fact that HBD is in the final stages of a due diligence involving an investment into a leisure-and-entertainment enterprise that offers a “unique” restaurant experience. It is also interrogating an equity position in a logistics enterprise.<br />
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To date, though, capital from Fund2 has been deployed in only two instances: an investment into EDH, which develops products and services for the sport, defense and industrial- inspection markets, including a radar-based solution used by broadcasters to track and display shots made by golfers during tournaments; and an investment into a company called incuBeta, which is an Internet search-engine marketing business, with a turnover of R50-million a year.<br />
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Long says its basic criterion remains that the companies be established and domiciled in South Africa.<br />
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She anticipates that HDB will remain invested in the companies for a period of about five years, and says its partners accept upfront that HDB will be seeking to make a profitable exit at some point. These exits can take various forms, from selling the business to similarly-styled entities, through to an initial public offering, most probably through a listing on the JSE’s small- company board, AltX.<br />
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The company has already exited from some of its initial investments made during the roll-out of Fund1, but Long admits that most of these have been conducted at a loss.<br />
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“We are acutely aware of the risks involved and don’t take them lightly. But our assessment is that, if we invest in ten companies and spend R100-million in the process, just one might turn out to be core. But that core investment will offer a return that more than covers the upfront investment with a healthy return, with the balance of the disposals offering a bonus over and above that return,” she concludes.<br />
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This may be a typical move by venture capital funds in the current economic climate trying to limit their risks and increase returns from businesses already proven to be successes in the market. Despite the importance of business finance being available to this market segment it should not be forgotten that with many banks trying to do the same the investors and banks in South Africa should not forget the army of entrepreneurs hoping to bring their own ideas to the market. Both Shuttleworth and the growing firms his company now invest in was at some stage a start-up and was it not for someone investing in these businesses at early stage they to may not have been in the position they are in today.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-41959606095322417002009-10-21T13:38:00.000-07:002010-06-19T05:02:05.980-07:00Starting a business with Venture Capital FundsBoth Venture capitalists & Business Angels are really just investors in your business providing <a href="http://www.investorsnetwork.co.za/">business finance</a> together with experience, business links and support. This is because the objective is still the same. The business or individuals involved will normally be reviewing tons of <a href="http://www.businessplandiy.co.za/">business plan</a>s until one is found that have some synchronicity with the values and objectives of the funder. <br />
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Venture capitalists & <a href="http://angelinvestorsa.blogspot.com/">Business Angels</a> will normally find you through a combination of ways. As an entrepreneur looking for <a href="http://www.investorsnetwork.co.za/">business funding</a> you may be found either through joining a network of investors, sending your business plan to investors that you know of, or in some rare cases they may find you, either through a referral or recommendation from someone else.<br />
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Once contact has been made and a background check has been done, the management team will contact the entrepreneur so a meeting can be set to talk more about the idea that was envisioned by the person. If everything sounds good, then the funding will take place similar to how a student in school is able to get a grant in order to conduct the project.<br />
The difference here is that the Venture capitalists & Business Angels will hold a certain percentage of shares in the business. This means a team of people will be working with the entrepreneur in seeing things through. This is done to protect the investment given by the company to ensure its success in the long term. <br />
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One of the industries being funded regularly by Venture capitalists & <a href="http://angelinvestorsa.blogspot.com/">Business Angels</a> is the information technology industry. Despite that, the chances of someone in another field who would like the same thing to happen is still possible because there are also companies out there looking for the next big break. <br />
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Everyone becomes a winner when VSs, business angels and the entrepreneur sign an agreement and turn that idea into a reality. This is because despite the risks involved in starting something new, the determination of the entrepreneur and the experience of the Venture capitalists & B<a href="http://angelinvestorsa.blogspot.com/">usiness Angels</a> can easily tackle the bumps on the road by steering clear from it. <br />
Venture capital funding is when a startup business or an existing one needs funds from outside people to sustain or keep it growing. While there are banks that can help do this, it is easier to deal with private individuals since the interest rates are not that high and these supporters become strategic partners. <br />
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So where do you go for venture capital or <a href="http://www.investorsnetwork.co.za/">business finance</a>? Depending on where you find yourself, most countries today will have venture capital associations or networks where business investors and entrepreneurs are introduced and do business. Do a google search for business finance, venture capital or angel finance in your country and you are likely to be taking the first step to gain funding for your new business.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-11601506881295270592009-10-07T13:36:00.000-07:002010-06-19T05:02:43.208-07:00How To Open A Business Using Venture Capital FundsBoth <a href="http://www.investorsnetwork.co.za/">Venture capitalists</a> & <a href="http://angelinvestorsa.blogspot.com/">Business Angels</a> are really just investors in your business. This is because the objective is simmilar to what it will be for any other investor. The business or individuals involved will normally be reviewing tons of <a href="http://www.businessplandiy.co.za/">business profiles</a> until one is found that have some synchronicity with the values and objectives of the funder. <br />
<br />
<a href="http://venturecapitalsa.blogspot.com/">Venture capitalist</a>s & <a href="http://www.investorsnetwork.co.za/">Business Angels</a> will normally find you through a combination of channels. As an <a href="http://www.investorsnetwork.co.za/">entrepreneur looking for business funding</a> you may be found either through joining a network of investors, sending your business plan to investors that you know of, or in some rare cases they may find you, either through a referral or recommendation from someone else.<br />
<br />
<br />
Once contact has been made and a background check has been done, the management team will contact the entrepreneur so a meeting can be set to talk more about the idea that was envisioned by the person. If everything sounds good, then the funding will take place similar to how a student in school is able to get a grant in order to conduct the project.<br />
The difference here is that the Venture capitalists & Business Angels will hold a certain percentage of shares in the business. This means a team of people will be working with the entrepreneur in seeing things through. This is done to protect the investment given by the company to ensure its success in the long term. <br />
<br />
One of the industries being funded regularly by Venture capitalists & Business Angelss is the information technology industry. Despite that, the chances of someone in another field who would like the same thing to happen is still possible because there are also companies out there looking for the next big break. <br />
<br />
Everyone becomes a winner when VCs, <a href="http://www.investorsnetwork.co.za/">business angels</a> and the entrepreneur sign an agreement and turn that idea into a reality. This is because despite the risks involved in starting something new, the determination of the entrepreneur and the experience of the Venture capitalists & Business Angels can easily tackle the bumps on the road by steering clear from it.<br />
<br />
Venture capital funding is when a startup business or an existing one needs funds from outside people to sustain or keep it growing. While there are banks that can help do this, it is easier to deal with private individuals since the interest rates are not that high and these supporters become strategic partners. <br />
<br />
As an entrepreneur, attracting venture capital funding of course also holds many other benefits for your business. You only need to speak to a business owner who has been there and done that to know that VCs, not only will provide you with the funding, but as their money is on the line, you will gain, experience, valuable contacts, a much needed confidant when times are tough.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-27896696010692285302009-08-25T14:21:00.000-07:002010-06-19T05:03:20.895-07:00Google announces Venture Fund<a href="http://www.google.com/ventures/"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5377357188224906258" src="http://3.bp.blogspot.com/_TXhMrnmP3aY/SqA130qJ9BI/AAAAAAAAA7Y/D9k_QQfShZ0/s320/google+ventures.jpg" style="cursor: hand; cursor: pointer; float: right; height: 103px; margin: 0 0 10px 10px; width: 320px;" /></a><br />
The <a href="http://dealbook.blogs.nytimes.com/category/venture-capital/page/21/">New York Times</a> this week reported that <a href="http://www.google.com/">Google</a> will be launching its own <a href="http://www.investorsnetwork.co.za/">venture capital </a>arm investing in new and growing ventures around the globe.<br />
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<a href="http://www.google.co.za/">Google</a>, which has invested in many <a href="http://www.businessplandiy.co.za/">business start-ups </a>over the years, announced late Monday that it is creating a venture capital arm whose main objective will be to turn a profit.<br />
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The group, called <a href="http://www.google.com/ventures/">Google Ventures</a>, is expected to invest up to $100 million over the next 12 months, The New York Times’s Miguel Helft reported. It will be overseen by David Drummond, who will continue in his role as senior vice president of corporate developing and chief legal officer at Google.<br />
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This is an almost natural progression of what Google has been doing for some time now and we will keep you posted on any further developments from the search engine turned venture giant.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-70451795883843971332009-08-18T08:03:00.001-07:002009-08-18T08:10:46.609-07:00Finding venture capital as an female entrepreneurSouth Africa is seeing an increasing amount of woman entrepreneurs. The huge range of industries now including woman entrepreneurs is encouraging and these stats have now even been made official by organizations such as the <a href="http://www.gemconsortium.org/">global entrepreneurship monitor</a>. But <a href="http://www.investorsnetwork.co.za">how do female entrepreneurs find business funding</a>. Where and how do they source there <a href="http://venturecapitalsa.blogspot.com/">venture capital</a> or <a href="http://angelinvestorsa.blogspot.com/">angel funding</a> from. In an increasingly competitive business environment it’s crucial that woman know how to go about finding funding for their businesses.<br /><br />Below are some important tips if you are a woman finding your way in the world of <a href="http://venturecapitalsa.blogspot.com/">venture capital</a>.<br /><br />Network the Financial Industry<br /> <br />Women must be able to network not only among other women business owners, but with all who are involved in the financial market. Expand networking possibilities with other entrepreneurs, men or women, who have successfully won venture capital funding. Talk with others who are connected with the VC industry. A local entrepreneur club may be a great way to share ideas and get venture capital contacts for financing your business.<br /> <br />Study the Main VC Industries<br /> <br />VCs invest heavily in technology businesses. Many women entrepreneurs have a great retail business idea, but find it difficult to obtain VC funding when there is no model for large scale expansion and sales. If you want to get a business kick started with venture capital funds, be sure to study the industry of your business idea and discover if it is likely to be viewed favorably among VC firms.<br /> <br />Strengthen Your Idea<br /> <br />As with any entrepreneur or company vying for VC funding, your business idea must be solidly defined, marketable, and in demand. Discover a niche for your business idea that will allow your company to experience potentially huge sales. This may take time, trial, and error to narrow and focus your business idea to where it is attractive to venture capital firms.<br /> <br />Assemble a Winning Team<br /> <br />In order to give your business an edge in getting accepted for VC funding, you must have a winning team in place before you approach VC firms. Take the time to assemble a list of potential managers, directors and executives of your company that have the right experience in their industry and preferably in other startup companies as well. <br />.<br />Above all its important that you remain true to yourself. Be choosy when choosing venture partners even when you may feel that you are reaching the end of your patience. Don’t loose hope and if you have done your <a href="http://www.sabusinessplans.co.za">business plan</a>, completed your <a href="http://www.sabusinessplans.co.za">feasibility study</a> and have confidence in your business as a prospect, chances are that the right venture partner for you is just around the corner.<br /><br />Thank you for the contribution made by <a href="http://www.ventureden.com">www.ventureden.com</a> to this article on where to find venture capital as an female entrepreneur.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-47524923649172730332009-08-14T09:17:00.000-07:002009-08-17T12:13:27.540-07:00More than Just Money - What VC's can really bring to the table<a href="http://www.investorsnetwork.co.za"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 106px; height: 121px;" src="http://4.bp.blogspot.com/_TXhMrnmP3aY/SomrugKupwI/AAAAAAAAA7I/cMnsdhykyiE/s320/cash.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5371012846013294338" /></a><br />South African Entrepreneurs and business start-ups benefit hugely from <a href="http://www.investorsnetwork.co.za">joining forces with venture capital firms</a> or even look for <a href="http://angelinvestorsa.blogspot.com/">angel funding</a>. Once you have your <a href="http://www.sabusinessplans.co.za">business plan</a> and <a href="http://www.sabusinessplans.co.za">feasibility study </a> done and are confident that this business idea is the way forward for you there may be numerous avenues for you to explore to <a href="http://www.investorsnetwork.co.za">get investment for a business</a>. <br /><br />Not only is there the obvious advantage of having cash in the business for research and development, marketing, product proto-types and all the other many business processes that benefit from an inflow of cash into the business, but the the other side of the deal, and in my view perhaps the best part of it is the expertise that the the business gains from either an individual or business who have been there and done it, more often than not, on numerous occasions.<br /><br />There has been a number of recent Blog threads on the issue this year.<br /><br />Recently on <a href="http://ventureblog.com/">Venture Blog</a>, <a href="http://www.augustcap.com/team/david_hornik/">David Hornik </a>writes in <a href="http://ventureblog.com/articles/2009/03/more_than_just_writing_a_check.php">More Than Just Writing a Check</a>, about the enormous benefits that entrepreneurs can experience from working with the right VC firm. <br /><br />Recently in the <a href="http://www.web-strategist.com/blog/">web strategy blog</a>, Jeremiah Owyang in his thread entitled <a href="http://www.web-strategist.com/blog/2009/03/21/beyond-the-money-vcs-provide-startups-with-a-competitive-edge/">Beyond the Money</a> lists the following benefits to working with a venture capital firm:<br /><br />VCs Provide Startups With A Competitive Edge by Offering Additional Services:<br /><br />Thought Leadership<br />VCs are required to anticipate future trends, and as a result they are highly connected, obtain information from a variety of sources, and have to quickly synthesize what’s next. Some of the VCs are more active in public, and are on the speaking circuit, and are sharing their ideas. Take for example David Hornick, who does a great job at this as he discusses why and how he’ll invest the $650mm they raised in high tech. Considering the recession this fund will fuel a great deal of innovation –even during a downturn.<br /><br />Strategic Guidance<br />Often, VCs sit on the Board of Directors of their portfolio companies and provide guidance, direction, and access to other decision makers. This not only protects the VC to keep an eye on the company, but gives the entrepreneurs a chance to bounce ideas off senior and seasoned investors. <br /><br />Being Part of The Family<br />Access is important. When I meet with startups, it’s important to know who invested in them, as it indicates their network. If you watch carefully (real carefully) you can see that startups that share the same investor use each others products, exchange executives, and are talking to each other. They often have offsites<br /><br />Ancillary Services<br />Some VC firms have education teams and marketing teams that provide a broad range of services to the portfolio companies who don’t have the resources to hire full time marketing staff. In fact, I’ll be doing a workshop with Giovanni Rodriguez in the near future for a VC group. Recently I held a dinner discussion with Allegis capital and Scale Venture Partners, to meet their portfolio and discuss market trends.<br /><br />Umbrella Branding<br />Perhaps the most under utilized is the benefit of being part of the brand of a well known firm. There are certain firms that are known for investing in certain verticals, or have a track record of success that lights my eyes up. Companies often tout their investors in briefings, especially if they are a top tier firm.<br /><br />Parties… eerr um Networking<br />Ok, that’s my polite way of saying great parties, well networking too. During the height of the economy, some VC firms flew the executives of their portfolio companies out to a one week retreat in Hawaii. Also, some of the best parties in all of Silicon Valley are at August capital –social media networking nirvana.<br /><br />Recruiting and Fundraising<br />I added this bullet after the fact, after seeing how David Hornick has added to the conversation it’s too important to pass up. VCs offer additional services like recruiting, which I’d be so bold to say is often executive placement of the right folks. Secondly, they help with fundraising, which I would assume would be for additional rounds of investment, I would expect that this would often mean a solid reference from one investor to the next.<br /><br />Entrepreneurs should weigh all benefits<br />Of course, with the top tier VC firms, there are certainly considerations, getting backed by a very successful VC firm may mean they have more influence over the terms, may drive the direction of your company, and ultimately, may have more equity of the company. I encourage you to think about the other services, network, and events that your VC will offer you, find out by observing or talking to companies in their portfolio. <br /><br />VCs offer more than just funding<br />VC should continue to provide thought leadership in their space, discussing in public why they are raising money, where they anticipate market growth, and how they plan to invest. This not only attracts new investors for their fund, but gives branding cover for their portfolio, and the folks in the industry, like me, visibility on the next trends. What they do beyond the investment makes a different –I can see it. <br /><br />Most of these sounds like an offer you would seldom be able to refuse. Remember though that if you do go down the road of looking for a venture capital partner to go into business with, do your homework, ask for references and check out the FAQ's on the topic on the <a href="http://www.investorsnetwork.co.za/frequently-asked-questions">SA Investors Network</a> site.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-62160562702826678972009-08-10T07:31:00.000-07:002009-08-18T07:39:31.947-07:00How to become a venture capitalist<a href="http://www.investorsnetwork.co.za"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 126px; height: 84px;" src="http://1.bp.blogspot.com/_TXhMrnmP3aY/Soq8vz8lLQI/AAAAAAAAA7Q/7V77BZpQj8Q/s320/vceg.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5371313035176914178" /></a><br />How do I become a venture capitalist? A common question asked by graduates, professionals and entrepreneurs who may have been through the process of finding venture capital to grow their business. <a href="http://www.investorsnetwork.co.za">Venture capital</a> is of course not for everyone and you need to be certain of your motivations of why to enter this are of business.<br /><br />If you have the money to invest and has the appetite for high-risk, high-return investments, you might consider investing in new, rapidly growing companies that have potential to bring you large returns.<br /><br />People and companies that do this are called venture capitalists. They help small and fledgling companies take off by providing them capital as well as technical and administrative inputs, usually, at their startup stage.<br /><br />How Does Venture Capital Investing Work<br />How do you become a venture capitalist? If you are an individual, you can act alone and become an "angel investor" providing low-level financing and management expertise or you can partner with another investor or become part of a group of people and institutions funding a corporation.<br /><br />If you are pursuing the plan with a partner or a group, you basically start a firm first, which is usually structured as a partnership or a corporation <br />The venture firm, as your group will be called, will form a pool of funds by seeking capital commitments from other investors and institutions to raise a pre-determined amount of money. This happens with the firm seeking out prospective investors and sending them prospectus about the capital raising. Out of the capital commitments solicited, a fund will be created, which will become the legal entity transacting business in behalf of the investors. The process could take weeks to years. The fund is usually structured as an LP or an LLC, which has a fixed lifespan, usually up to 10 years. <br /><br />The venture firm will have to decide whether it wants to invest the fund in a particular industry or area or invest across industries, in various locations and in companies at different stages of development. The venture firm might also choose to concentrate on acquisitions or helping failing companies get back to financial health (turnarounds). <br /><br />The venture firm considers various investment opportunities presented to it. The firm then conducts due diligence to choose an investee company (usually among many, which could be a hundred). Typically, the firm will be given shares in the investee company and members of the venture firm become managers or directors of the company. The capital commitments will be during several stages of the company’s development. <br />The firm may decide to do another round of rounds of fund raising for other investments. <br /><br />Venture firms anticipate investments to generate returns in three to five or seven years. Usually expected return on investment is 20-40%. The maturity of the investment is heralded favourably by an initial public offering of the company or a sale or merger, which shows it has gained enough footing to be able to attract investor interest. <br />As a venture capitalist, you help many companies get through their startup stage, while helping create jobs and fuelling the economic growth of the country.<br /><br />If you are looking for <a href="http://www.investorsnetwork.co.za">venture capital in South Africa </a>or want to try your hand at becoming a venture capital professional visit the <a href="http://www.investorsnetwork.co.za">investors network </a>site and see if you can start your bright future in business investment today.<br /><br />Thank you for the contribution of <a href="http://www.startupbizhub.com ">startupbizhub.com</a> to this article<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-31895923759012613672009-07-30T12:31:00.000-07:002009-09-04T13:26:32.355-07:00Venture finance deals for July 09After a relatively slow month in June we saw that <a href="http://www,investorsnetwork.co.za">venture finance </a>activity started picking up again in July. A few of the more interesting deals are listed below.<br /><br /><a href="http://www.VentureBeat.com">VentureBeat</a> Reported that <a href="http://www.Twitter.com">Twitter</a> may not have figured out a way to make money from its business yet, but that is not stopping spinoffs of the microblogger. Twitter’s increasing popularity as way for business to communicate with its customers has translated into a $1 million fund-raising round for <a href="https://cotweet.com/">CoTweet</a>, a start-up that helps companies manage their customer relations on Twitter in real time<br /><br /><a href="http://www.qik.com">Qik</a>, a start-up that enables live video streaming from a cellphone onto the Internet, has landed $5.5 million in fresh funding. <a href="http://www.questvp.com">Quest Venture Partners</a> and CampVentures led the round, according to <a href="http://www.VentureBeat.com">VentureBeat</a><br /><br /><a href="http://www.PaidContent.org">PaidContent</a> reported that<a href="http://www.austinventures.com/ ">Austin Ventures</a> has provided an additional $20 million for <a href="http://www.assetinternational.com/ ">Asset International</a>, the business-to-business financial information provider. <br /><br /><a href="http://www.pehub.com">peHUB</a> reported that <a href="http://www.quantcast.com">Quantcast</a>, the Web analytics start-up, is seeking to raise about $50 million at a $300 million pre-money valuation.<br /><br /><a href="http://www.VentureBeat.com">VentureBeat</a> reported that <a href="http://www.facebook.com">Facebook</a> co-founder Dustin Moskovitz and a colleague, Justin Rosenstein, left the firm last year to start their own company focusing on collaborative business software and tools. They raised money from some of the same investors who backed the social networking site, .<br /><br /> <br /><a href="http://www.paltalk.com"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 114px; height: 79px;" src="http://2.bp.blogspot.com/_TXhMrnmP3aY/SqFx5K-qvwI/AAAAAAAAA8A/o92HIOPseQc/s200/paltalk.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5377704657070767874" /></a><br /><a href="http://www.paltalk.com">Paltalk</a>, the video-based social networking start-up, is buying back the 20 percent stake it sold to <a href="http://www.softbank.com">Softbank</a> for $6 million in its second round of financing five years ago, <a href="http://PaidContent.org">PaidContent.org</a> reported. <br /><br /><a href="http://www.aptana.com"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 93px; height: 94px;" src="http://1.bp.blogspot.com/_TXhMrnmP3aY/SqFyoqun-AI/AAAAAAAAA8I/gaoerlfW0KY/s200/aptana.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5377705473047263234" /></a><a href="http://www.venturebeat.com">VentureBeat </a>reported that <a href="http://www.aptana.com">Aptana</a>, a maker of open-source software for Web sites, has nabbed $7.8 million in a fresh round of financing. <a href="http://www.rembrandtvc.com">Rembrandt Venture Partners</a> and Accel Partners provided the second-round funding, which the start-up plans to use towards Aptana Cloud, a free service that allows users to deploy and manage their web applications from a central location. <br /><br /><a href="http://www.InstantVideoGenerator.com">Generate</a> topped up its $6 million first round with an additional $2 million, the online video firm’s chief, Jordan Levin, reported <a href="http://www.PaidContent.org">PaidContent</a>. The add-on, completed last month, was led led by existing backers <a href="http://www.fusecapital.com/">Fuse Capital </a>and MK Capital.<br /><br /><a href="http://www.VentureBeat.com">VentureBeat</a> also reported that <a href="http://www.Outspark.com">Outspark</a>, which runs a “virtual playground” for online gamers, said it closed an $8.3 million venture financing round led by <a href="http://www.syncomfunds.com/">Syncom Venture Partners</a>, a new investor.<br /><br />Bono is one of the co-founders of the investment firm <a href="http://www.elevation.com/">Elevation Partners</a>, which has put $435 million into <a href="http://www.palm.com">Palm</a>. But he has been appearing as a pitchman in a commercial for the <a href="http://www.BlackBerry.com">BlackBerry</a>. <a href="http://www.nypost.com/">The New York Post</a> reported.<br /><br /><a href="http://www.sfgate.com">San Francisco Chronicle</a> reports that Blog network <a href="http://www.sportsblogs.org/">Sportsblogs</a> has raised $7 million in a Series B round, The San Francisco Chronicle reported. The round was led by Comcast Corporation. The network, which is popularly known as SB Nation, was founded in 2003 by Markos Moulitsas, who previously started the political blog DailyKos. <a href="http://www.sbnation.com">SB Nation</a> is a network of 200 sports-related sites that draw 3.5 million unique visitors a month.<br /><br /><a href="http://www.ning.com"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 119px; height: 90px;" src="http://1.bp.blogspot.com/_TXhMrnmP3aY/SqF2BTPASQI/AAAAAAAAA8Q/ReiB-VipYbQ/s200/ning.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5377709194772236546" /></a><br />Networking site <a href="http://www.ning.com">Ning</a> has raised $15 million in a fifth round of venture funding that gives social networking start-up a hefty $750 million valuation. <a href="http://www.lightspeedvp.com">Lightspeed Venture Partners </a>led the round, which brings <a href="http://www.ning.com">Ning</a>’s total funds raised to date to $119 million.<br /><br />And finally<br /><br /><a href="http://www.sliderocket.com"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 146px; height: 56px;" src="http://2.bp.blogspot.com/_TXhMrnmP3aY/SqF2t1JrkhI/AAAAAAAAA8Y/A18Ce8XsTcM/s200/sliderocket.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5377709959790957074" /></a><br /><a href="http://www.sliderocket.com">SlideRocket</a>, a startup that helps users build online presentations, said it raised $5million in a second round of venture financing led by <a href="http://www.azurecap.com/">Azure Capital Partners</a>. Hummer Winblad Venture Partners, the lead investor in its previous, $2 million round, also participated in the latest financing, the company said in a press release.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.comtag:blogger.com,1999:blog-3522434450361752432.post-17328558214716979162009-07-28T08:50:00.000-07:002009-07-28T08:52:51.157-07:00Tips when Presenting to VCsPresenting your idea to a VC can be a nerve wrecking experience at the best of times so most businesses will take all the help they can get when it comes to the presentation. Once you have <a href="http://www.investorsnetwork.co.za">found the right VC firm</a>, remember that VC's are also just people and most importantly looking for good investment opportunities. I was sitting in a presentation a few months ago when the speaker and also head of a large venture capital firm shared their frustrations of just not getting enough attractive opportunities to invest in. At time the figure mentioned was that around 75% of their available funds were never used due to a lack of investable projects. Remember that they need you as much as you need them.<br /><br />A few further tips to take note of are:<br /><br />1. VCs are pessimistic. Just understanding this before you go in and pitch is going to help you realize you’re talking to people who are skeptic about your idea before they even hear about it. You’re optimistic, but they see people lying about figures and numbers all the time, so they may expect it from you.<br /><br />2. Keep your opinion out. Stick to statistics and facts, because your opinion doesn’t count for crap unless you’re really credible, plus the VCs can instantly make a case not to fund you based on even the smallest and most insignificant differences of opinion.<br /><br />3. Have something that’s already established. 1 of the 5 finalists in the Cozad had a business that was established and making money. Guess who won the competition? Trying to ask a VC for money based on an idea that you have is like trying to ask a vegetarian to eat steak. If you’re not established, build a prototype.<br /><br />4. Don’t claim outrageous financial projections. I’ve heard someone try and claim that a R20k investment would return R40 million very quickly. Those types of projections--without much credibility or factual data to back it up--are raising red flags to your potential investors. The logic would also suggest that if this was the case, why not just go get a loan from a bank?<br /><br />5. Prepare to be grilled. You’re going to be asked direct, no-nonsense questions. Rise to the challenge, but if you don’t know an answer, just say so. One student was asked “What are your top 2 compliments and top 2 complaints from your current customer?” His answer was a blank stare, followed by an “I’m not sure.” That student still won the contest.<br /><br />6. 10/20/30. Plan on giving 10 slides in under 20 minutes with 30 point font. Please do this unless you absolutely plan on giving lunch and recess breaks to your audience.<br /><br />7. Practice the presentation. At least 20 times out loud, is Kawasaki’s recommendation. Enough said. If you don’t practice, you’ll be nervous and you won’t be seen as confident.<br /><br />8. Entertain if you’re good. Most VCs don’t mind being entertained in the process of being pitched. In my experience, VCs are very laid back and have a good sense of humor. Try and reciprocate that behavior, but this usually only works effectively with extroverted personality types.<br /><br />9. Don’t come off as desperate (read: don’t care). If you’re over-enthusiastic about your idea, people may think you’re just desperate. Be calm, present your case, and answer the questions. VCs are everywhere, so if you don’t get this one, pack your bags and move on to the next. Many sales theories state that the best way to attract a sale is to not care if a prospect is interested or not (watch the scene of Vin Diesel in Boiler Room for a perfect example). I like the analogy of VCs compared to women. If you go on a date and act too interested, it’s a huge turn off. Many girls are attracted to guys who are independent, think for themselves, do intriguing things in their life, and don’t seek approval.<br /><br />10. Know the competition (and yes, they’re out there). One of the biggest questions you answer is “How are you different from XYZ Company?” If you don’t have a definitive answer, you won’t see a dime. VCs are very sophisticated people and know their industries. If you “don’t have competition,” you’re not looking hard enough. I’ve seen VCs call a person out on this one too, and they usually already know the answers, they just want to see if you do.<br /><br />Let us know if you need guidance or coaching in more specific areas of the process, whether it being the Pitch, the deal, the negotiations or anything else.<div class="blogger-post-footer">For South African Business Invetment Opportunities and Capital check out <a href="http://www.investorsnetwork.co.za">SA Investors Network</a></div>Ben Boteshttp://www.blogger.com/profile/07365762347024490251noreply@blogger.com