ADVERSITY

Early-stage Investing Shows There’s Opportunity in Adversity

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As South Africa officially enters a recession, the local venture capital industry remains resilient, with investors continuing to look for deals and untapped potential in the market. The latest South African Venture Capital Association (SAVCA) annual survey has tracked that funds under management have grown to R171 billion, representing a compound growth rate of 9.3% since 1999. More than 52% of this investment has been directed to companies in the Western Cape, where a vibrant tech ecosystem has emerged over the past decade.

The mood was cautiously positive at the recent SAVCA 2020 Conference where the Western Cape’s Department of Economic Development and Tourism (DEDAT) was in attendance to officially launch the Intro to Early-Stage Investing – a free online short course aimed at supporting people interested in investing in start-ups, developed in conjunction with Fraser Consulting and The Loudhailer.

The course has been embraced by the early-stage investing sector. Danai Musandu, Investment Associate at Goodwell Investments says: “The Intro to Early-Stage Investing course is important because it is up to us, as people in the investment space, to share our knowledge with those that have the curiosity to do investments. There are so many businesses that need funding and we need participants to be a part of that story.” She is one of 20 early-stage investing ecosystem players whose interviews form part of the content of the Intro to Early-Stage Investing course.

The course is comprised of seven video modules giving viewers insights into the early-stage investment landscape, along with the investment options available to them. It is geared towards educating and empowering those interested in playing a part in the innovative start-up space, along with adventurous investors looking to make high-risk, high-reward investments and experienced entrepreneurs who would like to share their expertise.  In under three hours, they can get to grips with the basics of early-stage investing, from individual angel deals to Section 12J funds.

Those who have completed the course have commented on its relevance for investors into the Western Cape start-up scene, with one participant saying: “It was a new local perspective on early-stage investing.”  On the breadth and depth of the content, people have remarked: “It gave me some insight into additional investment tools; it was really insightful and easy to digest the information” and “It gave me better insights on how to plan for a smooth exit”. Additionally, they gave the Intro to Early-Stage Investing course an average rating of 4.6 out of 5, confirming that it’s a relevant and useful tool for individuals wanting to support more diverse economic activity in the province.

 “This course forms part of our larger programme to support the growth of the Western Cape tech sector and position the province as a leading digital hub. Encouraging early-stage funders will help grow the number of start-ups in the province who will, in turn, contribute to growing the economy and creating jobs, especially for young people, in the Western Cape. I encourage any potential start-up investors to take part in the course, make the most of this opportunity and consider investing in the vibrant digital economy that is in the Western Cape,” concludes David Maynier, Western Cape Minister of Finance and Economic Opportunities.

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