advertisement
Facebook
X
LinkedIn
WhatsApp
Reddit

Grotech looks to help ease the process of investing in tech companies in SA

South African venture capital firm Grovest has an interesting proposition for potential tech company investors: it’s offering an easier way to find an investee with targeted returns of more than 30%.

Under its Grotech fund, Grovest, which operates with the support of the South African Revenue Service (SARS), helps individuals, trusts and companies invest minority stakes in established businesses in the tech sector.

The company also offers investors the ability to deduct the full amount of their investment from their taxable income in the tax year ending 28th February 2016.

Investors can put forward any amount between R200 000 and R10 million.

Grotech’s own board of directors, made up of CEO Craig McLeod and Clive Butkow, former COO of Accenture South Africa, among others, is committing R7 million to the initiative and will be actively involved post-investment to reduce risk.

“Our strategy is to build a portfolio of innovative digital companies that provide technology-based solutions with innovative business models to existing and emerging institutions and their clients. Grotech will invest in entrepreneurs who are looking for growth capital to scale their businesses which are disrupting traditional industries such as banking, insurance, health and wellness, retail, media and entertainment.The tax deduction makes this alternative asset class an extremely compelling investment choice,” Butkow said in a statement.

With an investment of R100 000, you’ll get income tax relief of R41 000. Your net after tax cost of investment will be R59 000. R3 000 (or 3%) would be attributable to Grotech’s establishment costs and your net investment amount would be R97 000. If your taxable income is R500 000 for the year and you made a R100 000 investment, you would only be taxed on R400 000 of your income.

If you’re interested in investing through Grotech, or want more information on how you as a tech entrepreneur can have your business featured on its portfolio, visit the fund’s website.

Fund offers close on 15 February 2016.

[Image – CC by Simon Cunningham]

advertisement

About Author

advertisement

Related News

advertisement