Small Business Funding in South Africa

There are plenty of government and private organisations that offer funding for small businesses in South Africa. Most of these funds are meant to support previously disadvantaged South Africans namely black entrepreneurs and women. Below is list of some of these small business funds.

The National Empowerment Fund

The first organisation for small business funding in South Africa on our list is  the National Employment Fund (NEF).The NEF is a part of the South African government’s development mandate to encourage black participation in business and entrepreneurship. It’s main objective is to assist black entrepreneurs in achieving funding as well as offering entrepreneurs non-financial support. Currently the National Empowerment fund has approved more than R10 billion rand to black owned businesses. Its four main channels of funding consist of iMbewu Fund, uMnotho Fund, Rural Community Development Fund, Strategic projects, Arts and Culture Venture Capital fund, Tourism transformation fund

iMbewu Fund

iMbewu fund is has been set up to support black entrepreneurs that want to start new businesses as well as existing black-owned enterprises. The Fund offers finance products ranging from R250 000 to R15 million. iMbewu fund offers the following support;

  1. Entrepreneurship Finance

Enterpreneurship finance is one of the various forms of small business funding under the iMbewu fund. Entrepreneurship finance is aimed at providing start-up and expansion capital to new and existing businesses that are owned and managed by black people in the form of term loans, quasi equity and equity finance.

  1. Procurement Finance

 

The second form of funding under iMbewu Fund is Procurement Finance. Procurement finance is meant to assist black-owned SMEs that have been awarded tenders or contracts by public and private sector entities. The product’s main objective is to ensure that qualifying SMEs have the capacity to carry out their contracts. Terms loans, bridging finance, asset finance and revolving facilities are offered to businesses.

 

  1. Franchise finance

Franchise finance is another form of funding for small businesses under the iMbewu fund. Franchise finance is aimed at entrepreneurs who wish to start their own businesses by buying a franchise linked to a particular brand to reduce risks associated with start-up businesses lacking a track record.

uMnotho Fund

The uMnotho fund is the second small business fund under the National Empowerment fund. The uMnotho fund is meant to improve access to BEE capital and has five forms of funding which are Acquisition finance, New Venture finance, Expansion capital, Capital markets, as well as  Liquidity and warehousing. Funding is between R2 million to R50 million.

  1. Acquisition Capital

The first form of funding under uMnotho fund is the Acquisiton capital.

  1. New Venture Finance

The new venture finance is another form of small business funding under the uMnotho fund. This fund provides capital of R5 million to R25 million per project for BEE parties seeking to participate in medium-sized Greenfields projects with total funding requests of between R10 million and R200 million.

  1. Expansion Capital

Under the NEF, the expansion capital small business fund provides funding of R5 million to R75 million to businesses that are already black-empowered, but seek expansion capital to grow their business.

  1. Capital Markets

The fourth fund under uMnotho is the Capital Market fund. Companies specifically women led businesses receice investment. Also, this small business fund focuses on businesses that seek to list on the JSE or its junior AltX market. The Umnotho Fund through capital markets also helps listed BEE companies to raise additional capital for expansion.

  1. Liquidity and warehousing

The last small business fund under uMnotho is the Liquidity and warehousing fund. This fund helps BEE shareholders who need to sell a portion or all of their shares. It also acquires and temporarily warehouses these shares before on-selling them to new BEE shareholders, and refinances BEE shareholdings where existing financing structures are costly and/or inefficient.

Rural and Community Development Fund

Also under the National Empowerment fund is the rural and community development small business fund. The objective of the Rural and Community Development Fund is providing funding to aspiring rural entrepreneurs.

There are 3 funds under the rural and community development fund which are, acquisition new venture capital and expansion capital.

  1. Acquisition

Designed to cater for rural entrepreneurs and communities that want to buy equity in existing rural and community enterprises.

  1. New Venture Capital

New Venture Capital small business fund focuses on assisting rural entrepreneurs,  co-operatives and communities with equity contribution towards establishment of sustainable new ventures in Agriculture sector such a forestry, tourism, and processing. Small to medium sized new venture projects are eligible and funding is between R1m and R50m.

  1. Expansion Capital

The expansion capital small business fund is meant to facilitate the involvement and ownership by communities in projects promoting social upliftment of rural and community projects using entities such as co-operatives and private companies.

Strategic Projects

The strategic projects fund is another small business fund under the NEF established with a mandate to increase the participation of black people in early-stage projects. It seeks to include black participation and inclusion in the South Africa economy. The Strategic projects fund is at the centre of NEF’s investment strategy when it comes to securing the participation of black people in early stage projects or businesses.

Arts and Culture Venture Capital

The arts and culture venture capital fund, also a small business fund under the National Empowerment fund is designed to promote and develop the arts and culture sector by providing affordable loans to start and/or expand small businesses. The Arts and Culture department realises that in order to achieve radical economic transformation, access to funding must not be limited to few businesses. The Funds are meant to assist businesses become self-sustainable and not rely on government for grant funding. Funding is  available to businesses in all provinces, where more job opportunities can be created.

Industrial Development Corporation

Among other small business funds there is the Industrial development fund. This fund is available to those who have an existing business or wish to start a new one. The fund finances industrial projects and promotes partnerships between and across industries within South Africa and internationally. The industrial development corporation fund also focuses on diverse expertise to drive growth in priority sectors and takes on higher-risk funding projects. Black-owned and managed businesses along with those with employment equity are the major focus. The fund aims at developing the skills of black employees and business owners, by supporting local, regional, provincial and national government projects. The various sectors that are funded by the IDC fund include, agro-processing & agriculture, chemical products & pharmaceuticals, basic & speciality chemicals and clothing & textiles to name a few.

There are different types of Industrial Development Corporation Funding these funds are as follows

These funds are aimed at supporting projects that have high long-term impacts on the economy through growth. Development funds aim to bring projects out of the informal sector and into the economic mainstream.

Also a government fund, this fund provides support and helps businesses achieve increased competitiveness, business growth, job creation and development in the agro-processing and beverages sector.

The objective of this fund is to provide financial support to micro and small enterprises where the total assets are below R5 million, annual turnover is less than R13 million, and the business employs less than 50 people. The fund aims to promote innovation and technology development with financial support that way it enables the development of new products and processes.

The Risk capital facility programme is aimed at providing risk finance to businesses owned by previously disadvantaged individuals that offer substantial job creation potential.

This fund supports marginalised groups of South Africans such as women and the disabled. The objective of this fund is to gain access to finance that will help to develop and grow small businesses as start-ups or through expansions or acquisitions. In addition, this type of IDC funding offers mentorship and non-financial support including business planning, training, and mentorship.

The Green Energy Efficiency fund’s objective is at improving energy efficiency and helping South Africa become a low-carbon economy. The fund aim to drive down energy related costs, improve production capacity, operational effectiveness and competitiveness, which can aid in job creation.

The minimum requirements to qualify for funding;

National Youth Development Agency

The National youth development Agency is a small business Fund that offers grants, mentorship and development programmes for young entrepreneurs.  Formal and informal businesses that are in the start-up or development phase of their business can access funding. The fund has provided support to more than 24 000 youths, and more than 20 000 jobs have been created through this fund. The fund provides direct services to youth in the form of information provision, career guidance services, mentorship, skills development and training, entrepreneurial development and support, health awareness programmes and involvement in sports.

In order to qualify for the National Youth Development Agency you should meet the following criteria;

SEDA

Small Enterprise Development Agency, (SEDA) Is another small business funding option for entrepreneurs. The agency develops, supports, and promotes small enterprises throughout the country, plus they help ensure their growth and sustainability. The agency provides financial assistance such as loans and guarantees, to South Africa small businesses. They also provide assistance to businesses who want to purchase equipment and for the provision of working capital for small businesses in South Africa.

The technology intervention agency (TIA)

The technology intervention agency (TIA) is another funding option for small businesses. However, this grant is only available to individuals who work with a higher education institution or science councils and seek to commercialise their research. The grant is non-repayable and it is provided to support projects that are  run within a higher education institution. The funds range from R100 000  to R650 000.

The department of trade industry and competition (DTIC)

The department of trade industry and competition (DTIC) also provides funding to a number of businesses in various sectors aimed at development. The  funding is for  the purposes of economic development, black empowerment and to generally support industrial competitiveness in South Africa. Some of their funding schemes include, Automotive Development Scheme (ADS), aimed at the automotive industry, Production Incentive (PI), Critical Infrastructure Programme (CIP) and the Support Programme for Industrial Innovation (SPII) to name a few.

Isivande Woman’s fund (IWF)

Another fund small businesses can consider is the Isivande Women’s Fund. This government fund aims at supporting women’s economic empowerment by supplying them with cost effective, user friendly and responsive, available finance. The fund also offers support services to help improve the success of women owned small businesses. The Isivande’s Women’s Fund it targeted towards businesses that are starting up, expanding, rehabilitating, franchising as well as those that need bridging finance. The objective of the fund is to create self-sustaining black and women owned businesses by offering you primary financial and non-financial support. The fund also provides capital and supports formally registered businesses, that are operated mainly by women as well as businesses that have been in existence and operating for at least six months. The loans that are provided by this fund can range from R30 000 to R2 million.

The criteria for Isivande Woman’s Fund are as follows

 

Small Enterprise Finance Agency

The small enterprise Finance Agency supports existing small business and new ones with different forms of finance.  The different types of SEFA funds include bridging loans, term loans and structured finance.

Bridging Loans

The small enterprise finance agency offers short-term loans, which include working capital. The types of working capital offered by this fund include stock purchases as well as operating overheads. These loans are offered for only one year.

Term Loans

The term loans offered by the small enterprise finance agency are of a specific amount and have a specified repayment schedule, amount together with an interest rate. This type of funding is normally used to finance assets that have a medium to long-term lifespan, such as machinery, vehicles, office equipment. These term loans can be used to expand small businesses or for acquisitions and this loan has a repayment range of one to five years.

Structures Finance

The small enterprise finance agency also offers funding that falls outside the parameters of the term and bridge loans. They provide by a debt facility, which can be repaid over a period of five years and it can be tailored to a person’s unique requirements.

Khula SME Fund

Khula SME fund is another small business fund offered by Khula Enterprise Finance Ltd, it is also a government fund that aims to grow and increase the sustainability of small businesses. The major objectives of the fund are to offer small businesses early-stage and expansion capital, provide early-stage debt funding to small businesses  and offer support to small businesses in rural and peri-urban areas. The Khula fund also helps improve the business owners access to finance, grow businesses so they can create new jobs and encourage meaningful economic involvement of black South Africans. The fund’s aim is to foster entrepreneurship for men and women within the small to medium enterprises sector.

The following are the requirements for business seeking to apply for Khula government fund:

Izibulo SME Fund

The Izibulo SME Fund is a partnership between Khula and Metropolitan Life Limited as well as The Median Fund (Pty) Ltd. Its objective is to:

The Black Business Supplier Development Programme (BBSDP)

The Black Business Supplier Development Programme (BBSDP) is another small business fund that offers cost-sharing grants to black-owned businesses to help them improve their competitiveness and sustainability. It is also a government grant but it does not support start-ups. The Black Business Supplier Development Programme only supports the expansions of existing small businesses. The aim of this government fund is to fast-track small and micro-enterprises, encourage links between black-owned businesses, corporates and the public sector and to complement affirmative procurement and outsourcing. This government fund provides black entrepreneurs with a grant to a maximum of R1 million.

In order to qualify for this fund you should meet the following criteria

 

Incubation Support Programme

The Incubation support programme is designed to create and develop successful enterprises. The support program assists enterprises with the ability to revitalise communities and local economies. If you are a registered business in South Africa, or a higher education institution, or a licensed or registered science council you benefit from this support programme.

This incubation programme is available to applicants who may want to establish their own incubators or want to grow and expand existing ones. The incubator may  offer physical or virtual incubation support services. It essential that the incubator is focused on establishing and/or growing enterprises that will graduate to sustainable enterprises.

The incubator may be a:

 

Banks

There are a number of banks that provide funding for small businesses in South Africa. Some of these banks include, Nedbank, Standard Bank, and FirstRand to name a few. However, in order to secure a loan from any of these banks your business has to be viable plus you have to meet certain requirements. Most commercial banks have specialist SME divisions, that provide finance for qualifying entrepreneurs.

Venture Capital (VC)

There are a lot of venture capitalists that provide funding for small businesses in South Africa. The country’s VC sector has grown substantially over the years, with over R1-billion invested in start-ups and early-stage companies. Some of the top venture capitalists include 4Di Capital, a firm that has invested in start-ups such as Snapt, Aerobotics, Lumkani, and LifeQ; Silvertree Holdings, and Kingston Capital, all firms that have invested in a number of successful start-ups in South Africa.

Venture capitalists are more likely to invest funds once the business is established, providing greater profits in return for shares in the business.  Sometimes venture capitalists play a role in the company, usually at the board level. After a period of three to seven years, the venture capitalists sells their shares, either to the original owner, or to another investor.

Angel Investors

Angel investors are involved in a business at the beginning phase of development, often providing seed capital in the form of smaller funds for a business to operate and grow. There are a number of angel investors in the country that fund small businesses. Often angel investors are entrepreneurs who have a better understanding of the level of risk involved in investing with a business, and so they hardly require most start ups to go through too much paperwork as with a typical business loan. An angel investor also offers capital in exchange for an ownership stake, and this means that you won’t have to repay the investment. Some of the well known angel investors include Ernst Hertzog, Brett Mason, Avi Eyal, Joel Gascoigne, Brett Dawson, Michael Leeman and Lawrence T Levine to name a few.

Business Partners Limited

Another company that provides funding to small businesses is the Business Partners Limited company. This firm is an investment company for small and medium enterprises in South Africa. The company invests between R250 000 and R15 million in small businesses across all sectors, except for farming, on-lending and non-profit organisations. Investment financing is offered for businesses at all stages of development, such as start-ups, expansions, outright purchases, management buy-outs, management buy-ins, franchises, tenders as well as contracts. Business Partners Limited company also manages a number of specialist funds, that provide investment financing for defined-profile entrepreneurs. The firm also has a range of support services for all kind of entrepreneurs. This includes property management consultants, mentors who are allocated according to the company’s needs and access to other expertise required to ensure the success of the small business.

NYDA Small Business Funding

The National Youth Development Agency (NYDA) has been set up to provide small businesses with funding and non-financial support so that they can establish and grow their businesses. The fund mainly focuses on young entrepreneurs who have sustainable business ideas/models, or those that have promising businesses that are already up and running. The financial and non-financial support offered by NYDA includes;

The Grant Programme

The grant programme is one of NYDA small business funding. There are 3 major grant types which are

  1. Grants for individuals
  2. Grants for Co-operatives
  3. Grants for development Facilitation

The grant is used for the following purposes

To qualify for the NYDA Grant

Other Qualifying criteria is as follows;

The NYDA Small business grants amounts are outlined as follows;

Type of Enterprise Grant Amount
Start-up R1 000 – R10 000
Newly formed Private companies and Co-operatives R10 000 – R50 000
Startups or Co-operatives at the growth stage R50 000 –  R100 000
Expansion stage Private companies and Co-operatives R100 000 – R200 000
Other Agriculture or technology projects Maximum of R250 000

 

The Sponsorship and Thusano Fund

The sponsorship and thusano fund is also one of the NYDA small business fund. The thusano fund, that translates to helping hand, is for assisting small scale immediate needs. It functions over and above the organisation’s sponsorships.

The qualifying criteria for the fund is listed below;

Only funding requests of up to R50 000 per person or organisation are considered

The Business and Development training program

In addition to funding for small businesses, the NYDA provides training programs for young entrepreneurs. One of the goals for the NYDA is to create an environment where young entrepreneurs can succeed.  An environment where apart from funding, young entrepreneurs can access entrepreneurship skills, knowledge, and the right values for their business.

Some of the services offered by this include among others;

NYDA Voucher program

In addition to small business funding and business development the NYDA provides consulting services to small businesses through the voucher program. This voucher program is another way of small business funding and also a small business support programme that is focused on helping young entrepreneurs. Entrepreneurs are provided with business development support through the NYDA business consultancy service providers. This way they can be assisted in participating and competing in South Africa’s business environment. The consultancy services are accessed by young entrepreneurs through these vouchers. The vouchers range from R6 600 to R19 800 and there is no contribution fee required for  participation. Each registered business is entitled to a maximum of two hours worth of vouchers per business development.

Some of the business services that can be accessed through this voucher are listed below’

How to Apply for Business Voucher;

 

Eligibility for the Voucher

There are a lot of small business funds in the country that have helped young people with their businesses. Most of these funds target previously disadvantaged people in South Africa such as black people and women. The NYDA small business fund has also assisted a lot of entrepreneurs with funding and non financial support in order to grow their businesses. Also, this fund has helped to create employment for many. Currently twenty four thousand youths have been assisted by the NYDA and about twenty thousand jobs have been created.

Funding For Women’s Businesses In South Africa

A large number of women in South Africa have been at the lowest end of any form of business opportunity, or have been totally excluded. For that reason they are many organisations that now focus on providing financial support specifically to South African woman. Some of these funds for women’s business in South Africa are described below.

Enablis Acceleration Fund

The Enablis Acceleration Fund is one of the many organisations that fund for women’s business in South Africa. This organisation is a partnership between Enablis Financial Corporation SA (Pty) Ltd and Khula Enterprise Finance Limited. The company is currently capitalised at R50m. Its purpose is to improve access to early-stage funding to Small Medium Enterprises and to assist them in running their businesses. The fund seeks to reach out to SMEs in remote/rural provinces, create new sustainable jobs plus its focus areas are networking, coaching, mentoring, skills acquisition and financing. The fund also offers equity and debt instruments over loan periods no longer than 60 months.

In order to qualify for funding you must be a South African Small to Medium Enterprise that is accredited by the Enablis Entrepreneurial Network, and you should be a black woman entrepreneur. The fund provides capital to start-ups, and for the expansion of a business. Small businesses involved in all sectors, especially ICT, transport, tourism, agriculture and services industry and SMEs that need working capital and/ or asset finance are eligible. Enablis Acceleration Fund provides members with opportunities to connect with other potential customers, partners and investors. Members have access to knowledgeable business people from various industries and countries. Professionals such as lawyers, accountants, marketers and financiers offer advice to the Enablis Acceleration Fund members.

National Empowerment Fund

Another organisation that offers funding for women’s business in South Africa is the The National Empowerment Fund (NEF) established by the National Empowerment Fund Act, 1998. The NEF has been essential in driving and promoting and facilitating black economic participation by providing financial and non-financial support to black empowered businesses. Also the fund, promotes a culture of savings and investment among black people. The NEF Women Empowerment Fund is aimed at accelerating the provision of funding to businesses owned by black women in South Africa. The fund offers business loans ranging from R250 000 to R75-million across all industry sectors, for startups, expansion and equity acquisitions to name a few. To obtain funding from the National Empowerment fund the following requirements should be met.

Isivande Women’s Fund

Isivande Women’s Fund is the third organisation  that funds women’s businesses in the country. In 2008, government partnered with Old Mutual’s Masisizane fund to set up the R100 million Isivande Women’s Fund that is directly targeted toward women enterprises. The fund offers loans at lower interest rates, as well as non-financial support. The fund is meant to reduce poverty by empowering entrepreneurs who are often constrained by limited access to finance. As such, Isivande Women’s Fund (IWF) is a fund that targets black women at the bottom of the economic ladder. Its aim is to accelerate women’s economic empowerment by providing affordable, usable and responsive finance. The Isivande Women’s fund is managed by the Industrial Development Corporation (IDC) on behalf of the Department of Trade and Industry through Identity Development Fund (IDF) managers.

Formally registered enterprises that are 50% + 1 share owned and/or managed by women are eligible to receive funding.

Masisizane Fund

Masisizane fund is another organisation that has a specific focus on black women, youth, and people with disabilities. The fund mainly focuses on the under-developed areas of South Africa, including its rural areas, small towns, and townships, where businesses are typically seen as high-risk and struggle to secure finance through traditional channels. The fund provides financial support to  businesses in the manufacturing, franchising and agricultural sectors.  Masisizane Fund offers grants, loans and technical support to these small to medium enterprises. Their goal is to fund and enable women entrepreneurs to gain market access for their businesses and to create jobs. The Fund, which was established in 2007, also funds black-owned enterprises that are linked to clearly-defined enterprise and supplier development strategies of various corporate and government entities.

 African Women’s Development Fund

The fifth organisation offering funding for women’s business in South Africa is the African Women’s Development Fund. African Women’s Development Fund (AWDF) is a grant-making foundation that supports local, national and regional women’s organisations working towards the empowerment of African women and the promotion and realisation of their rights. The fund offers grants ranging from USD$8000 to USD$100,000. The African Women’s Development Fund (AWDF) is a Pan-African grant making organisation that supports African women’s rights through funding of autonomous women’s organisations all over Africa. The fund was established in the year 2000, and has awarded grants of over US$41.7 million to over 1,300 women’s organisations in 46 countries in Africa and the Middle East.

The basic qualifying criteria for applying for the African Wowen’s Development Fund are as follows:

Africa Trust Group

Africa Trust Group provides funding for women’s business in South Africa. It is a South African based early stage gender-lens investing group committed to investing in Africa’s women entrepreneurs encompassing enterprise development, and access to markets and trade facilitation.

Africa Trust Group are the fund managers for

Selected businesses participate in Enygma Ventures’ investor readiness programme to receive seed equity investment.

Absa Woman Empowerment Fund

Absa Women Empowerment Finance facility was created for new and existing woman-owned businesses. If the business has a revenue stream and a positive cash flow but lacks a deposit, collateral or security, it can qualify for a loan of up to R50 million. This woman’s fund also provides flexible options to repay the loan either on a monthly, bi-monthly, quarterly or annual basis.  Female entrepreneurs can borrow funds between R150 000 and R50 million plus the repayment terms can get up to 10 years.

The minimum criteria for applying for a loan at Absa Woman Empowerment Fund;

Special Projects and Programmes

The 8th fund that finances women businesses in South Africa is the Special Projects and Programmes Unit (SPP). The SPP is within the Programme Analysis and Development (PAD) of SEDA, plus it has an arm that focuses on projects specifically for women. The SPP focuses on supporting women so that they are not hindered by negative prevailing socio-cultural attitudes, gender discrimination or bias and personal difficulties. The Special Projects unit was established by the Accounting Authority to primarily address its transformational agenda and rural and township revitalisation. Also, the SPP creates a platform where women can educate themselves about all the various aspects of becoming an entrepreneur. Special projects and programmes are meant to contribute towards the economy of the municipalities and provide youth unemployment. Special projects also target NGOs, Cooperatives, local municipalities and public entities.

Women in Oil and Energy South Africa

In addition to the above organisations, another company that offers funding for women’s businesses in South Africa is the Women in Oil and Energy South Africa group (WOESA). The WOESA Group of businesses aims on facilitating and promoting business for, and enhancing, the participation of South African women in the oil and energy sector. The organisation offers services to its member companies, organisations and individuals that focus on developing a knowledge base and building capacity amongst women through education and training. With WOESA, one can have access to business opportunities, plus obtain assistance in drafting legislation and policies. Other services provided by WOESA, apart from access to finance are;

Crowdfunding Platforms in South Africa

The idea of crowdfunding has been in existence for centuries as crowds gathered to hear and support pitches. With the help of digital technology and social media crowd funding has been taken to new heights and expanded the playing field for many investors and entrepreneurs. In South Africa crowdfunding offers new opportunities to invest in the growing SME market. It is a mechanism that enables broad groups of investors to fund promising start-up companies and small businesses.

Thundafund

Thundafund is one of the leading crowdfunding Platforms in South Africa for entrepreneurs with creative and innovative ideas. Founded in 2013 by Patrick Schofield, Thundafund also offers business mentorship apart from allowing entrepreneurs to raise capital. The platform has about 25 000 supporters, and has funded over 1 400 projects, and the fund has raised more than $3 million so far. Thundafund  is not limited to South Africa only but also caters for African entrepreneurs who wish to raise capital for their various projects.

To qualify for funding on the Thundafund Crowfunding platform you need;

These requirements are also relevant with most crowdfunding platforms

Uprise Africa

Another leading crowdfunding platform in South Africa is Uprise Africa. Uprise Africa offers a platform where people can invest in early stage businesses and startups in return for equity. This crowdfunding platform was founded in 2017. Entrepreneurs who want to make use of Uprise Africa funding platform to raise capital must have a FICA documentation and should be available to answer any questions that investors may have. Entrepreneurs can set their funding goal only up to R50 million. Also, only private limited companies can raise funding via this crowdfunding campaign. Given that crowdfunding is still new in the country, the current regulations governing the platform’s operations do not place restrictions on the platform being used as a fundraising platform by Pty (Ltd) companies.

How To raise funds on the Uprise Africa Platform

South African Angel Investment Network

The third crowdfunding platform in South Africa for entrepreneurs is the South African Angel Investment Network.  However, anyone seeking funding can only become a member after paying a certain subscription fee. The South African Angel Investment Network allows entrepreneurs to pitch their business model to local and international angel investors for capital. Entrepreneurs are required to register and pitch through the online platform like every other crowdfunding platform. In addition to a concise introduction to the business and who the entrepreneur is as a professional a pitch must include a registered name and a website for the business or project. The South African Angel Investment Network allows entrepreneurs to be introduced to the correct investors and are able to accept funds from investors at any time. With over than 200 000 investors the platform has Over $400 million raised for its members to date. To raise capital on South African Angel Investment Network simply follow the following steps;

 

Livestock Wealth

Livestock Wealth is a unique crowdfunding platform where farmers can connect with investors. Founded in 2014, this platform facilitates the connection between farmers who need working capital and investors who want to invest in growing assets, but don’t have the means to do so themselves. Anyone can become a farmer with Livestock Wealth since anyone can buy livestock, or make a plant based investment from the farmer. The asset grows in the farmers care and at maturity the farmer buys back the asset once it has fully grown at harvest, in turn the investor makes a profit from the sale.

Some of the investment and funding options available on the platform are as follows.

The People’s Fund

One of the first back-owned crowdfunding platforms in South Africa, The People’s Fund, launched in 2017. The People’s Fund is a purchase order crowdfunding platform for businesses that have orders with government and corporate and are looking for capital to deliver these orders. This fund has partnered with some of South Africa’s networking communities to black entrepreneurs such as The Hook Up Dinner and Playbook as well as Brownsense. The People’s Fund focuses mainly on black-owned innovative businesses. The platform also requires that entrepreneurs pitch their business model to one of The Hook Up Dinners. With The People’s Fund anyone can contribute various amounts even as little as R100 to fund a purchase order. In return the entrepreneur shares some of the profits from the project with the investors, and every other member of the crowd in that project.

Another interesting thing about The People’s Fund is that the platform allows investors such as individuals, corporations, and even stokvels to purchase an asset for a business. These investors are then paid back a royalty for as long as the asset lasts.

The preferred purchase order clients for the crowdfunding platform are as follows,

Jumpstarter

The last popular crowdfunding platform in South Africa is Jumpstarter. Jumpstarter is a non-profit crowdfunding platform which was founded in 2011. Through this platform Jump entrepreneurs receive funding or donations in exchange for rewards. Jump Starter makes use of the 100%-or-nothing funding meaning that the businesses need to be fully funded or no money will be exchanged. The platform has funded over 18 projects raising about R520 920 for various businesses in technology, food, film, fashion and design, and art to name a few.

Tips to for launching a successful jump starter crowdfunding campaign

When it comes to crowdfunding, it is important to understand that as an entrepreneur you are trying to create a relationship with the people or companies that you are seeking funding from. It is important that you present your product or idea well so that it spreads fast and attracts funding.