So you’ve had a few coffees with a like-minded co-founder, you’ve coded your first MVP and you’ve tested it with an audience. What next?
It’s a tough question for a lot of South African startups: where are the opportunities for early stage or growth funding? Where are the mythical Section 12J investors who should be beating a path to your door?
There’s obviously a lot of incubators, accelerators, venture funds and angel investors around, but Michelle Yorke of the Aspen Network for Development Entrepreneurs (ANDE) reckons that there aren’t enough, and those that do exist are way too isolated to be properly effective.
ANDE is an international organisation with offices in Johannesburg, and to try and help fix those issues it launched an update “map” of the South African startup ecosystem at the Global Entrepreneurs Conference in Johannesburg today.
The original map was researched and published in 2014, but Yorke says that more than 200 new organisations including government bodies, media houses and accelerator programmes have been added to the original list. The idea is that by plotting out what each insittution does, entrepreneurs will be able to identify the programs and investment opportunities best suited to their work, while gaps in support can be spotted more easily.
“What we see is that there’s little financial support for startups in the ideation phase,” Yorke explains, “And most of the networks are focussed on early and expansition phases.”
ANDE’s work has been picked up by SiMODiSA, a local organisation which works with entrepreneurs and tries to inform government around policy decisions (it was instrumental in helping to get IP concerns into the budget, for example). SiMODiSA will be incorporating the map into a new website it plans to launch soon, which founder Matsi Modise says will be a resource to help startups access basic information – such as how to start a business – and look for funding or local events too.
The new site, Venture Central, will be launching soon.
“We wanted to build a tool that helps entrepreneurs access the information in the map,” Modise says, “And pull together information from around the ecosystem into one place.”
Modise agrees that more money has to go to very early stage companies.
“Growth of the venture capital asset class has to be a problem solved by government and private sector,” she says, “VCs want a more robust industry that they can put money into, and for startups if you’re looking for anything less than a million rand, it’s really hard. There are no options other than family, fools and friends, and that stifles the number of ideas coming out of South Africa right now.”