Angel investing has seen ‘phenomenal growth’ in Africa says SABAN co-founder

Angel investing on the African continent has seen “phenomenal growth” in recent years, SA Business Angels Network (SABAN) co-founder Chris Campbell said today.

He was speaking to Ventureburn ahead of the fourth annual African Angel Investor Summit (AAIS2017) set to take place on 15 to 17 November at Workshop 17 in Cape Town.

Campbell said while he didn’t have numbers in front of him to point to, he said he had anecdotally seen “phenomenal growth”, with African Business Angels Network (ABAN) membership now at 63 angel groups, up from perhaps fewer than 10 such groups four years ago.

He attributed the growth in angel investing on the continent to being part of a global rise in angel investing following the 2008 Global Financial Crisis, when bank funding dried up.

The event, which is organised by the African Business Angels Network (Aban), the SA Business Angels Network (Saban) and VC4Africa, aims to bring investors and those in the angel investing sector together to discuss trends, best practice and regulatory issues. Campbell expects about 200 attendees for event.

‘African Business Angels Network membership is now at 63 angel groups, up from perhaps fewer than 10 four years ago’

Speakers include among others Baybars Altuntas from the World Business Angels Investment Forum, iDEA Nigeria’s Helen Anatogu, Village Capital’s Adedana Ashebir, Rising Tide’s Isabelle de Melo, Newtown Partners’ Llew Claasen, Silvertree Capital’s Paul Cook and Knife Capital’s Keet van Zyl and Andrea Böhmert, 4Di Capital’s Justin Stanford.

The event’s web page says this year’s event partners with XL Africa, the first post seed stage pan-African acceleration programme made possible by InfoDev at the World Bank.

“Sourcing the best digital innovators from across the continent, the XL Africa team will introduce 20 companies ready for Series A funding and poised for global success,” says the site.

The conference will also include a tour which aims to provide those attending with an introduction to Cape Town’s tech ecosystem and with access to the entrepreneurs and leaders building the sector, while being spending a day being hosted by industry experts who are embedded in the community.


ANNUAL AFRICAN ANGEL INVESTOR SUMMIT 2017 INVITE

Join us in Cape Town to meet Africa’s early-stage investor community!

Get Tickets here

Infographic – Why do businesses fail?

For any new entrepreneur, it’s natural to be optimistic.

Whether that person has a world-changing idea or is starting a new coffee shop, the glass has to be half full that the business will succeed. Otherwise, what is the point of starting a new company in the first place?

Why businesses fail:
82% experience cash flow problems
42% find that there is an insufficient need for their product or service
29% run out of cash
23% do not have the right team
19% are out-competed

Have a look through this infographic with US trends. 



Is SA’s education system killing off entrepreneurship

by Mike Herrington

“The latest South African Global Entrepreneurship Monitor (GEM) report found that only 10.1% of South Africans of working age intend starting their own business in the next three years, compared to 41.6% in the other African countries that were surveyed.

Even more disconcerting is that this rate of “entrepreneurial intention” has been declining in SA over the past few years. In 2013 it stood at 15.4%, while in 2010, it was 19.6%.”

read the full article in businesslive

SA needs more women Angel Investors

Article by Stephen Timm – Ventureburn

Why are there so few women angel investors in South Africa? It’s a question that continues to puzzle local venture capitalist Andrea Bohmert.

“I would love to have the answer to that question, because I don’t have it,” said Bohmert, a partner in venture capital (VC) fund Knife Capital.

Bohmert was speaking at a women in angel investing event hosted by the SA Business Angels Network (Saban) last night at FNB’s offices in Cape Town.

She pointed out that just one of the 24 investors in Knife Ventures — Knife Capital’s VC company approved by the South African Revenue Service (Sars) in August last year — is a women.

“I am convinced that women have better networks (than men)… but that they are worse at using them,” said Bohmert, who added that women are also not good at asking for advice.

‘Women have better networks than men but that they are worse at using them’

Also speaking at the event, Swiss South African angel investor Nanci Govinder (pictured above), said a lack of knowledge on business angels held women back from becoming angel investors.

She said one of the biggest hurdles is that women believe that they need a lot of money to be an angel investor.

Govinder is a deal leader at angel investing network Rising Tide Europe and head coach at the Swiss Commission of Technology and Innovation (CTI).

The angel investing group’s Swiss chapter has 93 women currently who each invest a minimum of €10 000. The group was set up at the beginning of last year. She said one of the biggest enjoyments of angel investing is seeing entrepreneurs grow and later sell their companies thanks to initial investments from angel investors.

SABAN Angel Investor Training & News Updates

It’s a particularly busy time in the South African entrepreneur-investor world over the next week as Johannesburg hosts GEC 2017 – the Global Entrepreneurship Congress. SABAN is co-hosting cocktails for investors and agripreneurs on Wednesday 15th March, contact us if interested in attending.

This afternoon SABAN hosts its first angel investor training session in Cape Town, where Newtown Partners Managing Partner, Llew Claasen, will unpack key principles and share from his many investment experiences. More below.

Looking ahead: Towards the end of March, Peter Jungen will be in SA, with decades of experience and legend-status in Germany. Join him for lunch in JHB on the 24th or dinner in CPT on the 28th.

And then, hot-off-the-press, in May we will have two ‘Women in Angel Investing’ evenings, more details to follow, Save The Date: 16th May JHB, 18th May CPT.


Angel Investor Training | Cape Town

Taking place at Rise, created by Barclays at the Woodstock Exchange in Cape Town this afternoon, we look forward to kicking off Angel training in SA. If you could not make this session, but are interested in future training, please contact us so we can guage interest and plan future events.

The session will cover everything you need to know to get started as an angel investor in SA, including: the setup process, identifying good opportunities, due dilligence, negotiating transaction terms, valuations, deal syndications, balancing your portfolio, your involvement as an investor, second-round financing and exits. The session will also look at best practices for maximising your returns.

Email chrisc@socius.ch for enquiries on last minute availability.

More details of the event are available at: http://qkt.io/tJx0sy

**Note: All proceeds go to SABAN. The South African Business Angel Network (SABAN) is a non-profit, industry association dedicated to growing angel investing in South Africa.


Peter Jungen Visits South Africa

Mr Peter Jungen, German Angel legend, is in town (ie. South Africa) for an Oppenheimer family moment late March and we will be hosting two informal meet-ups to hear his thoughts on the future of global angel investing. [100 word bio]

Check your diary: lunch in Johannesburg on Friday 24th March and dinner in Cape Town on Tuesday 28th March. Not to be missed.

Space is limited, if interested in joining contact Chris at chrisc@socius.ch with a winsome reason to have a seat at the table.



SABAN News & Updates:

– Investor Cocktails in Johannesburg at GEC 2017 on 15th March [Enquire]

– National Treasury Announces Relaxations on IP Exchange Control [Read]

Save the Date: Women in Angel Investing, 16 May (JHB) & 18 May (CPT)

 


SABAN Objectives:

– Raising awareness of Angel investing activity

– Capacity building / training

– Lobbying for regulatory improvements

– Seeding Angel Groups in major economic hubs

– Research

– Accreditation

– Networking

– Awards

SABAN launch press: SA Business Angel Network boosts early-stage investing

There is light ahead on the tough, dark road faced by local entrepreneurs, with the launch of the South African Business Angel Network (SABAN), a professional association for the early stage investor community reports Linda Doke for itweb.co.za

In South Africa, more money is chasing fewer deals.

Mvi Hlophe SABAN  co-founder

SABAN is part of the African Business Angel Network (ABAN), a pan-African non-profit organisation founded to encourage and support the development of early stage investor networks across Africa.

Following the Johannesburg debut in August, SABAN launched in Cape Town last week. 

SABAN co-founder Chris Campbell said the organisation aims to provide a link between the local entrepreneurial ecosystem and investors, and grow a body of investors that can benefit from the strength of networking and collaboration.

Campbell is an SA-based entrepreneur who decided to replicate the work of EBAN (European Business Angel Network) in South Africa.

“The association will be set up as a trust, registered as a non-profit organisation. It will be an industry body which aims to galvanise and grow angel investment in South Africa. The keyword is collaboration – the creation of an angel investment ecosystem relies on successful networking,” he said.

Angel investors vs venture capitalists

Speaking at the Cape Town launch event, World Business Angel Investment Forum chairman Baybars Altuntas said business angels use private money to invest, while venture capitalists use the funds of the organisation they represent.

“There is strength to be gained in working together, particularly through a collaboration of minds and experience. It is highly risky to invest in a start-up as an individual. Through collaboration, angel investors reduce that risk,” said Altuntas.

“Knowledge, mentorship and networks differentiate business angels from other investors – they contribute their know-how, provide mentorship, and share their own networks to give the start-up the injection it needs. Angel investors are not just providing money, they supply smart finance.”

Altuntas referred to business angels as the leaders of the world’s early-stage investment market.

“In 2015 alone, about 300 000 angel investors in the US invested more than $25 billion in start-ups and SMEs. In Europe, it was €6 billion for that same period. It is estimated that the global market worth of angel investment already exceeds US$50 billion annually,” said Altuntas.

Connecting talent and money

Private equity investor Mvi Hlophe said increasingly in South Africa, more money is chasing fewer deals.

“South Africa doesn’t have the pipeline of quality entrepreneurs being funded at the seed capital stage. Angel investment bridges that funding gap,” said Hlophe.

Entrepreneur and SABAN advisor Vuyisa Qabaka believes that while the supportive environment for entrepreneurs in South Africa is gradually growing, the country needs more risk-takers to put money together towards talent.

“Talent should never have to look for money. Talented people with great ideas should be able to have a few conversations with the right people, in order for money to come to that talent. In South Africa, the access between entrepreneur and investor has been limited. Through SABAN, that gap will be bridged,” said Qabaka.

South African business woman and angel investor Audrey Mothupi sees the greatest potential for angel investment in South Africa in the financial technology space.

“What has been missing in our country’s entrepreneurial ecosystem has not been the creative ideas, energy or passion, but collective engagement. If SABAN can create the networking links across South Africa, we can partner and engage the African and European business angel networks to share ideas and ways to create even more opportunities for investment and for the creation of wealth for all,” said Mothupi.


SABAN is supported by the following partners and event sponsors: Newtown Partners, SA Innovation Summit, The Peninsula Hotel, OutsourcedCFO, African Business Angel Network, Entrepreneur Traction, StartUp Grind, Allan Gray Orbis Foundation, Silicon Cape and SiMODiSA. The SABAN founding committee consists of Mvi Hlophe, Bodo Sieber and Chris Campbell.

SABANlaunch press: SA needs more risk investors to seed SME growth

South Africa needs more risk investors, particularly those aimed at investing in talented black entrepreneurs that struggle to access mentorship and funding.

Written and published by Stephen Timm on smallbusinessinsight.org

Speaking on Thursday at the Cape Town launch of the South African Business Angel
Network (Saban) Entrepreneur and SABAN advisor Vuyisa Qabaka (pictured below) said while the venture capital (VC) ecosystem is growing and the state is supporting this with the Section 12J tax incentive (see this post), South Africa needs more risk-taking investors.

“We need more more people to put in money in the early stages of the business, in that not so heavy level of R20,000 ($1,500), R40,000, R100,000 investment level (and for) syndicates to come together to put together money towards talent. That’s missing in our ecosystem,” he said.

saban-launch-8

Vuyisa Qabaka at the SABANlaunch (Photo Je’nine May / @SABANnetwork)

Qabaka added that while many white communities had friends or family who might be able to help seed their businesses, black entrepreneurs had few such people to approach for investment. “The question I have to ask is who is their uncle?”

He said angel investing could help fund and mentor rising talented start-ups.

South Africa has about 49,000 dollar millionaires who could potentially help seed new businesses and create jobs. In the US each angel investment added an average of 3.6 jobs, according to a 2014 estimate.

A 2015 report said 55 angel investments collectively valued at R42.5 million ($3m), were concluded in South Africa between 2011 and 2015. However the report likely failed to capture the large number of deals which are concluded under the radar.

‘Critical to SA’
SABAN steering committee member Mvi Hlophe said angel investing is critical to the country meeting its challenges of unemployment and poverty.

saban-launch-14

SABAN co-founder Mvi Hlope (Photo Je’nine May / @SABANnetwork)

As a private equity fund manager he sees an increasing amount of money is chasing fewer deals. Angel investing could therefore help seed a pipeline of deals, some of which could later migrate to receive private equity investment.

Hlophe says SABAN aims to bring together and accredit angel groups, allowing angels to invest together and in so doing find and validate better deals and lower their risk by spreading investment across various deals.

He says the organisation plans to run a set of angel masterclasses early next year. The group is in the process of registering as a non-profit.

saban-launch-17

SABAN launch Keynote Audrey Mophuti (Photo Je’nine May / @SABANnetwork)

Angel investor Audrey Mothupi has in the last two years funded a number of small businesses, including a Diepsloot gas distributor who has grown his business to employ 50 people today.

Two years ago she cashed in on her shares that she was given in Liberty Life while she was working at the company, to fund her angel investing endeavours,

Mothupi said missing in South Africa is a collective engagement about what “I can do”.

Turkish incentive
Perhaps a lesson is to be had for policymakers, in Turkey. A 2013 law allows angel investors a 75% corporate tax reduction should they hold company shares in recipient businesses for at least two years. It’s the biggest such tax exemption offered by any country in the world.

In addition angel investor can get 50% of their investment, matched by a $200m government co-investment fund, in which the government will provide an equity-free investment in a beneficiary.

saban-launch-13

Baybars Altuntas – Chair of the World Business Angel Investment Forum, Vice President of European Business Angel Network (Photo Je’nine May / @SABANnetwork)

Further to this the Turkish stock exchange Borsa Istanbul in 2014 launched an online matchmaking platform.

The “Private Market” platform (www.bistozelpazar.com) allows entrepreneurs to find angel investors that have been registered and accredited by the stock exchange. It offers companies the opportunity to raise finance without going public while allowing company partners to sell their shares, and investors to liquidate their investments.

In the first half of 2015 the amount invested in early-stage investments grew by more than 200% compared to the same period in 2014, with the number of investments growing from 22 to 33, according to a tech blog.

Also speaking at Thursday’s event, World Business Angel Investment Forum chairman Baybars Altuntas, said there are now 400 angel investors accredited by the Treasury, with 16 angel networks (each with an average of 50 angels) now located in three cities.

Because of the difficulty of exiting from deals, it is difficult to convince global angel investors to invest in Turkish firms. To address this the government recently allowed global angel investors who can prove that they have been involved in a successful exit, to qualify for the same tax incentive in Turkey as citizens do.

‘Invite all players’
Altuntas, an entrepreneur who took part in the Turkish edition of Dragon Den, said back in 2010 he knew next to nothing about angel investing but ordered many books from Amazon.com on angel investing to learn more.

Later he met with President Recep Tayyip Erdogan to advocate for the incentive. His advice for convincing policymakers? “You have to find simple words to convince them.”

“I think Saban has to invite all market players to the same table – the stock exchange, the government – someone has to do it. And creating such an ecosystem will leverage the market in a very short period of time,” he advises.

Incentivising those with money, connections and experience to invest in start-ups or helping angel networks to set up (see this post) can only help small businesses in emerging economies to make a bigger impact. More governments should listen up.

Stephen Timm is a South African journalist and researcher who has been writing on small business and entrepreneurship in South Africa, Brazil, Chile, India, and Malaysia since 2003. He has written on small business for a number of South African newspapers, including Business Day and Mail & Guardian, and magazines, including Entrepreneur SA and Financial Mail.

SABAN JHB Launch – A Promising Step for South Africa

With the South African Business Angel Network – SABAN – launching in Johannesburg on August 24th, 2016, South Africa can claim its first national non-profit association whose purpose is to “galvanize and grow angel investing” in the country.

Chris Campbell is an entrepreneur based in South Africa who has been on the front line of SABAN’s creation. Through his experience pitching and going through funding rounds, Chris saw the need to make it easier to connect South African entrepreneurs and business angels. The inspiration for him to get involved personally came after the EBAN Winter University 2014 in Helsinki, Finland, which enabled him to see what was being done in other countries and that it could be possible for South Africa as well.

Chris is quick to mention that ABAN – the African Business Angel Network – has been instrumental in providing support to get SABAN off the ground. ABAN spans the whole continent and is envisioned as a “network of networks”. However, it is also in the unique position of helping develop national and regional networks itself, in which regard SABAN will certainly be a testament to its success. The Finnish Business Angels Network and Lagos Angel Network both provided helpful examples to follow as well, for the task of creating a business angel network. And, ultimately, at the Global Entrepreneurship Congress 2016 in Medellin, Colombia, several South African stakeholders, including Chris, came together to acknowledge that the angel investment ecosystem in their country would be difficult to grow organically unless a catalyst – such as a national network – was introduced.

The first concrete conversations on starting SABAN started as recently as May 2016, but there has been incredible progress so far. Among those consulted and supportive so far are the Johannesburg Stock Exchange, Newtown Partners, Allan Gray Orbis Foundation, Entrepreneur Traction, GBAN, Silicon Cape, SiMODiSA, VC4Africa, Clifftop Colony, Knife Capital, SA Enterprise Development, DEMO Africa, Venture Networks, French Tech Hub, Methys and Jozi Angels. Early support has also been shown by the South African Department of Trade and Industry, who attended EBAN’s Annual Congress 2016 in Porto, and are willing to help connect SABAN with the European Commission.

To put the South African economy in context – the country is characterized by extremely high unemployment and low GDP growth, so entrepreneurial initiative is sorely needed to boost the economy. And where there are entrepreneurs, there must also be business angels. While private angel groups and small syndicates do exist in the country, as mentioned, SABAN will be the first ever national non-profit network. Additionally, there is little data regarding business angel activity in the country, however, their number is surmised to be somewhere between 20 and 50 publically known business angels. On a related note, SABAN also aims to increase the amount of information available on early stage market players in South Africa.

Another, even bigger launch event for SABAN is set to take place in November in Cape Town, and by early 2017 SABAN is expected to be in full force. The organization is headed by a steering committee of Chris Campbell, Bodo Sieber (CEO ofTagmarshal, which recently received German angel investment) and Mvikeli Hlophe (fund manager at SA Enterprise).

Many of the key individuals helping drive SABAN forward are familiar to EBAN – Audrey Mothupi (NFBAN Board Member), Craig Mullet, Anthony Farr, Vuyisa Qabaka, Alexandra Fraser, Dean Cannell, David van Dijk, Ben White, Tomi Davies, Llew Claasen, Matsi Modise, Elizabeth Gould, Garreth Bloor, Anthony Record, Christophe Viarnaud, Rebecca Enonchong and Abu Cassim. Candace Johnson and Baybars Altuntas have both been in contact with Chris regularly helping provide additional impetus to SABAN.

COURTESY OF http://www.eban.org/saban-launch-promising-step-south-africa