Gauteng
ENTREPRENEURIAL ECOSYSTEM SNAPSHOT
SOUTH AFRICA
WITH SUPPORT FROM ENTREPRENEURIAL Gauteng ECOSYSTEM SNAPSHOT
South Africa has the second largest economy in entrepreneurs. These organizations collectively operate Africa. Yet, due to a variety of structural, historical, 215 programs that provide non-financial support, 90 and political factors, the economy is susceptible to programs that provide financial support and seven fluctuations. Persistent challenges to economic growth programs that provide other support services to in turn affect the ability to start and grow businesses. entrepreneurs in Gauteng. The OECD identifies high unemployment rates, high interest rates, and rising oil prices as a few of these This snapshot also builds on previous efforts to identify challenges. In addition, South Africa remains one of support for entrepreneurs in South Africa. ANDE’s South the most unequal countries in the world. In an effort Africa Chapter created its first snapshot in 2015 and to reduce inequality and eliminate poverty by 2030, released an update in 2017. South Africa produced the National Development Programs in Gauteng are clustered in Johannesburg, Plan 2030, which provides a long-term vision for the with over 87% of programs with offices and/or country to achieve economic growth. staff located in the metropolitan area. Within the Within this larger economic context, a concentrated Johannesburg metropolitan area, 63% of programs examination of one region within South Africa can have a physical presence in the wealthy Sandton suburb. provide greater insight into a specific geographic Only 13% of programs operate in the lower income area, close information gaps, and help foster a local townships of Soweto, and less than 10% work in the environment in which entrepreneurs can thrive. This Roodepoort and Southern townships. snapshot commenced in February 2018 with support 55% of these programs are sector agnostic and mainly from the Department for International Development focus on employment generation, due to South Africa’s (DFID). It provides an in-depth look at programmatic high unemployment rate. In addition, most programs support available to entrepreneurs in South Africa’s state that they focus on supporting women and youth. In economic hub, the Gauteng province. terms of investment models, only 15% of respondents In this snapshot of the Gauteng province, the Aspen included impact investing strategies in their business Network of Development Entrepreneurs (ANDE) models, and equity was the preferred investment identified 255 organizations with programs supporting instrument overall.
METHODOLOGY
Review of Surveys and Stakeholder Existing Literature Interviews Meetings
To see more data and findings, see the digital version of ANDE’s Ecosystem Snapshots at: ecosystems.andeglobal.org SOUTH AFRICA SUMMARY
215 90 7
NON-FINANCIAL FINANCIAL SUPPORT OTHER ECOSYSTEM SUPPORT PROVIDERS PROVIDERS SUPPORT PROVIDERS
TOP SECTOR OF FOCUS TOP VERTICALS
OF SURVEY RESPONDENTS OF SURVEY RESPONDENTS % % FOCUS ON NO SPECIFIC 55 ARE SECTOR AGNOSTIC 47 55+45J 47+53J VERTICAL
TOP FINANCIAL INSTRUMENT NON-FINANCIAL SUPPORT
OF SURVEY RESPONDENTS OF SURVEY RESPONDENTS % % FOCUS ON BUSINESS 56 PROVIDE EQUITY 75 56+44J 75+25J STRATEGY AND PLANNING
TOP IMPACT OBJECTIVE TOP STAKEHOLDERS FOCUS
OF SURVEY RESPONDENTS OF SURVEY RESPONDENTS 53% FOCUS ON EMPLOYMENT 56% FOCUS ON WOMEN 53+47JGENERATION 56+44J ENTREPRENEURS
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 2 DATA
Intervention Type
Provide Nonfinancial Services to % Entrepreneurs Directly (160) 63 Promote and Educate about % Entrepreneurship (106) 42 Invest Directly (69) 27% Conduct Research on the Sector (51) 20% Provide Financial Support to % Intermediaries (24) 9 Invest into Funds (5) 2% Other (19) 7%
n=255
Investment Instrument
+1007% +1002920274263 56 Equity (43) % Debt (30) 39 % Grant (16) 21 14% Quasi-Equity (11) 3% Guarantees (2) 8% Other (6)
n=77
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 3 DATA
Nonfinancial Support
75% 68% 42% 40% 37%
75Business Strategy +25H 68Access to Networks +32H Marketing42 Support or+58H 40Financial +60H 37Needs Assessment +63+H and Planning and Partners Market Research Management (61) (123) (112) (69) (65)
35% 32% 30% 29% 28%
35Leadership +65H 32Due Diligence +68H Technology30 Development+70H 29Sector Development+71H 28Value/Supply Chain +72+H Development (53) or Adoption (48) Development (58) (49) (46)
26% 25% 24% 24% 22%
26Media Exposure +74H 25Legal, Accounting, +75H 24Building HR +76H 24Governance +76H 22Ideation +78+H (42) Other Office Services Capacity Structure (36) (41) (39) (39)
20% 20% 16% 16% 15%
20Performance +80H 20Investor +80H 16Investor Showcases +84H 16Exit Strategies +84H 15Building M&E +85+H management Matchmaking (27) (26) Capacity (33) (32) (25)
11% 3%
11Product +89H 3Other +97H Certification (5) n=164 (18)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 4 DATA
Stakeholder Type
Business Development Service 47% Provider (101) Accelerator/Incubator (92) 43%
Enterprise Development Services (85) 40%
Consultant (51) 24%
Impact Investor (33) 15%
Venture Capital Fund (26) 12%
Private Equity Fund (23) 11%
DFI/Multilateral (14) 7%
Angel Investor (14) 7%
Crowdfunding (11) 5%
Fund of Funds (8) 4%
Funder of Accelerators (6) 3%
n=215
Nonfinancial Support Delivery Mechanism
Mentoring (125) 58%
Classroom/Seminar Training (96) 45%
Direct Consulting Services (82) 38%
Cohort or Group Support (75) 35% Peer to Peer/Network-based 31% Support (67) Co-working Space (39) 18%
Competitions/Prizes (33) 15%
Seat on the Board (16) 7%
Talent Placement (10) 5%
Fellowships (9) 4%
Other (8) 4%
n=214
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 5 DATA
Sectors of Focus
Sector Agnostic (137) 55%
Information and Communication 26% Technology (66) Agriculture & Food (63) 25%
Energy (53) 21%
Manufacturing (49) 20%
Financial Services (49) 20%
Education (48) 19%
Health (42) 17%
Supply Chain Services (41) 16%
Logistics & Distribution (39) 16%
Infrastructure/Facilities 14% Development (36) Wholesale and Retail Trade (36) 14%
Environment (35) 14%
Hospitality/Travel/Tourism (33) 13%
Transportation (33) 13% Media & Entertainment (33) 13%
Water & Sanitation (32) 13%
Housing and Community % Development (26) 10
% Land Conservation (25) 10
Artisanal (23) 9%
Forestry (22) 9%
Culture (20) 8%
n=250
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 6 DATA
Stakeholder or Business Model Focus
Women Entrepreneurs (100) 56%
Youth Entrepreneurs (99) 56%
Social Enterprise (88) 50%
Urban Communities (69) 39% Minority or Previously Excluded Population (63) 36%
Rural Communities (62) 35%
Accessibility (56) 32%
Gender Inclusion (53) 30% Science, Engineering or Invention Based Businesses (51) 29%
Citizen Empowerment (50) 28%
Base of the Pyramid (43) 24%
Advocacy (34) 19%
Resiliency/Climate Change (30) 17%
Ethical Sourcing (27) 15%
Franchising (22) 12%
Refugees and Migration (11) 6%
n=177
Verticals
None (67) 47%
FinTech (45) 31%
AgTech (45) 31%
E-commerce (39) 27%
EdTech (38) 26%
Data Analytics (36) 25%
CleanTech (33) 23%
Software as a Service (SaaS) (33) 23%
Biotech (32) 22%
Hardware (21) 15%
n=144
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 7 DATA
Impact Objective
Employment Generation (116) 53%
Income/Productivity Growth (107) 49%
Capacity Building (89) 41%
Access to Financial Services (81) 37% Access to Information (64) 29%
Equality and Empowerment (57) 26%
Community Development (47) 22%
Access to Education (47) 22%
Agricultural Productivity (32) 15%
Food security and Nutrition (30) 14%
Sustainable Energy (27) 12%
Health Improvement (24) 11%
Sustainable Land Use (22) 10%
Access to Energy (22) 10%
Energy and Fuel Efficiency (19) 9%
Natural Resources Conservation (17) 8%
Water Resources Management (16) 7% Pollution Prevention and Waste Management (16) 7% Access to Clean Water and Sanitation (15) 7%
Affordable Housing (13) 6%
Human Rights Protection or Expansion (12) 6% Generating Funds for Charitable Giving (11) 5%
None (11) 5% Disease-specific Prevention and % Mitigation (9) 4 Conflict Resolution (8) 4%
n=218
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 8 STAGES OF SUPPORT
KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Academic Institution
IDEA START UP EARLY GROWTH MATURE
Anzisha Prize (African Leadership Academy)
Centre for Development and Enterprise
Da Vinci Institute
Entrepreneurship Development Academy (Gordon Institute of Business Science (GIBS))
GetSmarter
OSA Ecosystem
Regenesys Business School (No stage information available)
The Generator Plus Program (Wits Enterprise)
Tshimologong: Digital Innovation Precinct (Tshimologong)
University of Johannesburg’s College of Business and Economics (University of Johannesburg)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 9 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Bank or Financial Institution
IDEA START UP EARLY GROWTH MATURE
Absa Enterprise Development (Absa)
Deutsche Bank South Africa’s Entrepreneurship Centre (Deutsche Bank South Africa)
Inyosi Enterprise and Supplier Development (Inyosi Empowerment)
Merchant Capital
Nedbank Enterprise Development (Nedbank)
Old Mutual
Royal Fields Enterprise Development Programme (Royal Fields Finance)
SME Toolkit Online Resource for SMEs (Business Partners Limited)
Spartan SME Growth Finance (Spartan SME Finance)
Thundafund Crowdfunding Platform (Thundafund Pty Ltd)
Uprise Africa
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 10 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
A-Game Business Blueprint (A-Game Business Consulting)
Acceleration Services (IM IN Accelerator)
Access to Markets Workshop (YIEDI (Pty) Ltd)
ASISA Enterprise and Supplier Development Fund
Athari Consulting and Advisory
Aurik Business Accelerator and Business Growth Funding (Aurik Business Accelerator)
Awethu Project Incubator
Black Umbrellas Incubation Programme (Black Umbrellas NPC)
Business Elevator for Acceleration (SA Business Hub (Pty) Ltd)
Business Mentorship and Market Access (Smile Business Creation)
Climate Innovation Centre South Africa (The Innovation Hub)
Columba Values Based Leadership Programme (Columba Leadership)
Creative Enterprises Hub Development Programme (Creative Business Cup | Creative Enterprises Hub)
Duke Innovation and Growth Master Class (AMSCO)
Duke Strategic Thinking Masterclass (AMSCO)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 11 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
Emerging Public Leaders (Global Development Incubator)
Enterprise and Supplier Development (Pillars Business Advisory)
Enterprise and Supplier Development Programme (Property Point)
Enterprise Programme (Junior Achievement South Africa)
Enterpriseroom Customised SME Support Model (Enterpriseroom)
Entrepreneurial Support / Female Developer Programmes (Jozihub)
EXCEED (Thuthuka Ltd)
EY Ripples (EY)
Financial Literacy Training (It’s A Breeze Ltd)
Flames Financial Literacy and Micro Enterprise (Driven Entrepreneurs)
Food Technology Incubation Programme (Bakery and Food Technology Incubator of South Africa)
Game-Changer for Girls (Side by Side South Africa)
GoSustainable Eco-Inclusive Training and Mentorship Model (Pillars Business Advisory)
Government Capacity Building and Support (PACT)
Green Economy SMMEs and Start-ups (Sophiatown BizCre8)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 12 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
Green Entrepreneurship Support Programme Southern Africa (Hivos)
Groundswell (Fetola)
Hitachi Entrepreneur Programme (Think Room)
Hub@Goethe (Goethe-Institut Johannesburg)
IgnitorED Lean Startup and Entrepreneur Development Bootcamps (IgnitorED)
Impact Hub
Impact Management and Measurement Course (AMSCO)
Injini
ISF Advisors (Global Development Incubator)
Jewellery Manufacturing Training (Ekurhuleni Jewellery Project)
JoziHub Co-creation Space (Jozihub)
Justice Accelerator (The Hague Institute for Innovation of Law Grant)
Khula Business Group (Pty) Ltd (No stage information available)
KYB Early Childhood Development Enterprise Incubator (Pty) Ltd
LEAP BDS Support Services (Lean Enterprise Accelerator Programmes)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 13 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
Lepharo (Seda Ekurhuleni Base Metals Incubators T/A Lepharo)
ManualMakers CC
Membership Network (Venture Network)
Mentorship Programme (National Mentorship Movement)
Micro Franchisor Development Program (Business Doctors Midrand)
My Growth Fund
Mzansi Creative Hub Development Programme (Mzansi Creative Hub)
NGM Hybrid incubation Programme (New Generation Mindset)
Novation Now (Pty) Ltd
OPEN Workspaces (OPEN)
Orange Corners Start-Up Hub (Orange Corners)
Personal Development Programme (The Experience Factory)
Professional Services To The SMME Market (The Why Effect)
Reddin 3D Effective Managerial Training (AMSCO)
Residency Programme (GEN Africa - 22 on Sloane)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 14 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
RIH Business Growth and Development Support (Riversands Incubation Hub)
SAB KickStart Boost Programme (TechnoServe Inc.)
SAICA Enterprise Development Programme (SAICA ED)
Sanedi Sunref (Enclude)
SEDA Incubation Program (GrowthWheel South Africa (Pty) Ltd)
Seed Academy
Seed Fund, Incubation, Open IX, Inno8te (The Innovation Hub)
Socionext Social Innovation & Entrepreneurship Acceleration Programme (Socionext)
Spark*
Sw7 Accelerate (Sw7)
T System ESD Programme (Business Doctors)
Telehealth and Telemedicine Projects (Mamlakah Technology Foundation)
Televised Entrepreneur Bootcamp and Competition (Ignitor)
The Box Shop (TechnoServe Inc.)
The Difference Makers Earth Angels (The Difference Makers)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 15 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Capacity Development Provider
IDEA START UP EARLY GROWTH MATURE
The Innovation Hub Management (GrowthWheel South Africa (Pty) Ltd)
Tholoana Programme Funded by SAB Foundation (Fetola)
THUD Monthly Entrepreneur Networking Events (THUD)
TMARA
University of Pretoria Business Incubator
Urban Agriculture Incubator (Urban Agriculture Initiative)
WEConnect International in South Africa
Young Enterprise Scale-UP (YES) Programme (HYBR)
Youth Employment Service
Youth Enterprise Development Programme (Junior Achievement South Africa)
Zevoli Youth Empowerment Programme (Zevoli Consulting)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 16 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Corporation or Corporate Foundation
IDEA START UP EARLY GROWTH MATURE
African Greeneurs (Enterprising Africa Regional Network)
African Technopreneurs (Enterprising Africa Regional Network)
Business Entrepreneurship & Franchise Expo (Eskom)
Business Investment Competition (Eskom)
Business Process Mechanics
Deshun Deysel & Associates
Discovery Enterprise Development (Discovery ESD)
EARN Biz Support (Enterprising Africa Regional Network)
Elevation (Elevation Holdings)
Emzingo Group
En-novate
Engen Pitch & Polish (Engen Petroleum)
Enterprise and Supplier Development (General Electric)
Everest Transaction Advisory Services & Contract Funding (Everest Ventures)
Global African Agribusiness Accelerator Platform (Africa Business Group)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 17 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Corporation or Corporate Foundation
IDEA START UP EARLY GROWTH MATURE
HackTheWorld (AB InBev)
Harvest Time Investments (AFGRI)
KasiHive #OpenCampus (Diepsloot Kasi Hive)
Liberty Blue Skies ESD Programme
Match and Invest Platform (SA Innovation Summit)
Mesh Club
Mintor
mLab Southern Africa
PPC Ntsika Fund (PPC)
Praekelt.org (No stage information available)
PwC
Raizcorp Entreprenurial Development Programmes (Raizcorp)
Red Bull Amaphiko Academy (Redbull Amaphiko)
Sappi Project Grow (Sappi)
Shared Business Services (Start My Startup)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 18 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Corporation or Corporate Foundation
IDEA START UP EARLY GROWTH MATURE
Smart Procurement World / Enterprise & Supplier Development Expo (Smart Procurement)
SME Snapshot
Standard Bank Incubator (Standard Bank of South Africa)
Telkom Future Makers (Telkom)
The Business Place
Thundamental
Tiger Brands Small Holder Farmer Programme (Tiger Brands)
Zimele Community Fund (Anglo American)
Development Finance Institution or Donor Agency
IDEA START UP EARLY GROWTH MATURE
COSY (British Council)
EIB SME and MIDCAPS Fund (Industrial Development Corporation)
Gro-E Youth Scheme (Industrial Development Corporation)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 19 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Development Finance Institution or Donor Agency
IDEA START UP EARLY GROWTH MATURE
Intuthuko and uMaStandi Empowerment Fund (TUHF Ltd)
National Youth Development Agency
Pitching Booster Campaign (Gauteng Enterprise Propeller)
Technology Venture Capital Programme (Industrial Development Corporation)
Tjala Impact Fund (Kagiso Trust)
uMnotho Fund (National Empowerment Fund)
XL Africa (The World Bank)
Youth Pipeline Development Programme (Industrial Development Corporation)
Foundation
IDEA START UP EARLY GROWTH MATURE
Biofuels Business Incubator NPC
Citi Foundation
Raymond Ackerman Academy of Entrepreneurial Development
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 20 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Foundation
IDEA START UP EARLY GROWTH MATURE
Technology Enablement (The Wot-If? Trust)
Young Entrepreneurs Foundation (Young Entrepreneurs)
Government Agency
IDEA START UP EARLY GROWTH MATURE
eGoliBIO
Ekurhuleni BizSpark Incubation Centre (Ekurhuleni Business Facilitation Network)
Ekurhuleni Business Centre (Ekurhuleni Business Facilitation Network)
Godisa Supplier Development Fund (Transnet)
Green Business Value Chain Programme (Department of Environmental Affairs)
SA Essential Oils Business Incubator (Seobi)
Seed Fund, Technology Development Fund, Youth Technology Innovation Programme (Technology Innovation Agency (TIA))
Softstart BTi (Softstart Business and Technology Incubator)
The Jobs Fund
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 21 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Investor
IDEA START UP EARLY GROWTH MATURE
AccelerateHer - Women Training & Development Programme (WDB Growth Fund)
Alitheia IDF Fund
AlphaCode Programme (AlphaCode)
Angel Network (Jozi Angels)
Ashburton Credit Enhanced Fund (Ashburton Investments)
Black Swan Investments
Caban Investments
Convergence Partners
CRE Venture Capital
E2 Elevator 3.0 (E squared)
Ethos Private Equity (Ethos Capital)
Field Partnerships and Direct to Social Enterprise Funding (Kiva)
Fund (Newtown Partners)
Fund of Fund and SME Ecosystem Development (SA SME Fund)
Grindstone 4 (Knife Capital)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 22 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Investor
IDEA START UP EARLY GROWTH MATURE
GroFin SGB Fund (GroFin)
HAVAIC
Hivos Food & Lifestyle Fund (Hivos Impact Investments)
Horizon Equity Partners
Impact Fund at Pearl Ventures (Pearl Ventures)
Invenfin Venture Capital (Invenfin)
Kalon Venture Partners
Kgatelopele Private Equity and Venture Capital
Kingson Capital Venture Capital Fund (Kingson Capital)
KNF Ventures (Knife Capital)
LifeCo UnLtd Enterprizer Network (LifeCo UnLtd SA)
Louw & Company
Montegray Capital
Nesa Enterprise Development Fund (Nesa Capital)
RainFin
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 23 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Investor
IDEA START UP EARLY GROWTH MATURE
Sanari Capital (No stage information available)
Secha Capital - Investment and Operational Support (Secha Capital Partners)
Seedstars South Africa (Entrepreneur Traction)
Silvertree Internet Holdings
Simanye Trust (Simanye)
StartMe
TriVest
Venture Capital & Growth Equity (VaalbaraVC)
Media Organization
IDEA START UP EARLY GROWTH MATURE
Bandwidth Blog
Disrupt Africa
Entrepreneur Mag
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 24 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Media Organization
IDEA START UP EARLY GROWTH MATURE
Fairlady Santam Women of the Future (Fairlady) (No stage information available)
Fin24 (No stage information available)
HTXT Media (Pty) Ltd
Moneyweb (No stage information available)
MyBroadband (No stage information available)
SME South Africa Entrepreneurship Survey (SME South Africa)
TechCentral (No stage information available)
Research or Advisory Service Provider
IDEA START UP EARLY GROWTH MATURE
Accelerated Business Development Programme (Datacomb)
Dalberg Global Development Advisors
EPI Business Development Practitioner Support and Research (Entrepreneurial Planning Institute)
Greenthings Projects Izindaba Zokudla (Greenthings projects)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 25 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Research or Advisory Service Provider
IDEA START UP EARLY GROWTH MATURE
Impact Advisory Services (AMSCO GreaterImpact)
Impact Evaluation Program (Impact Economix)
Monitoring and Evaluation Analytics Platform (Catalyst for Growth)
SA Business Plan
SBP
SEED
SME Research (Osiba Holdings)
SMME Recruitment Program (Harambee)
Tushiyah Advisory Services
Uzenzele Capital Raising Services (Uzenzele)
Venture Finance in Africa (Venture Capital for Africa (VC4A))
Z.A.ZEN Consulting and Entrepreneurship Research (Z.A.ZEN Consulting (Pty) Ltd)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 26 KINDS OF SUPPORT EQUITY QUASI-EQUITY DEBT GRANT GUARANTEES
Sector Association
IDEA START UP EARLY GROWTH MATURE
African Crowdfunding Association (African Crowdfunding Association)
Business Incubation and Skills Development in Furniture (Furntech)
Business Unity South Africa (BUSA)
Lionesses of Africa Digital Accelerator Programme (Lionesses of Africa)
SME Movement
Social Entrepreneurship Fellowship and Leadership Development (Echoing Green) (No stage information available)
South African Business Angel Network
Southern African Business and Technology Incubation Association (SABTIA)
Southern African Venture Capital and Private Equity Association (SAVCA)
The South African Innovation Network (SAINe)
Venture Central (SiMODiSA Start Up)
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 27 MAP
38 PROGRAMS provide services in Tshwane.
22 PROGRAMS provide services in the West Rand.
22 PROGRAMS provide services in Ekurhuleni.
20 PROGRAMS 187 PROGRAMS provide services in provide services in Sedibeng. Johannesburg.
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 28 CHALLENGES AND OPPORTUNITIES
CHALLENGES OPPORTUNITIES in the Gauteng Entreprenurial in the Gauteng Entreprenurial Ecosystem Ecosystem
Over 60% of programs have offices and/or staff in The government is committed to the the more affluent suburbs of Gauteng. Less than entrepreneurship agenda. Support programs include 13% of programs have a physical presence in the Gauteng’s Growth and Development Strategy (GDS), more impoverished and low income rural and Gauteng Township Economy Revitalisation Strategy, informal settlements the National Development Plan (NDP) and the Youth Employment Service (YES) program. The Department of Small Business Development also has a number of There is a shortage of funds that make investments support programmes. into other funds which invest in the growth of SGBs. This contributes to a shortage of seed- and early- stage funding for SGBs and hinders support for An active yet fragmented Gauteng entrepreneurial entrepreneurs at the ideation stage. ecosystem lends itself to a better coordinated provincial strategy with targeted roles, effective partnerships, and collaboration. Anecdotal evidence suggests that there is a shortage of skilled or experienced candidates applying for jobs at entrepreneur support The majority of corporations in South Africa are organizations. Current program practitioners in the headquartered in Gauteng and are equally committed sector often lack the necessary professional skills to to small business development through the SA help aspiring entrepreneurs not only develop their SME Fund—a fund of funds to support the growth of businesses, but also overcome personal challenges high-potential businesses that will positively impact that may affect their entrepreneurial success. economic growth.
The ability of ecosystem players to make informed Venture Capital Companies (VCC’s) in Gauteng are decisions and fill the most critical gaps is limited by on the rise, which is influenced by Section 12J, a tax the shortage of robust local ecosystem research and incentive for VCC’s introduced by the government. siloed approaches. This is encouraging to early stage businesses needing to unlock financial support. A lack of agreed upon, commonly used definitions and language in the ecosystem causes confusion for Few investors identify as impact investors in Gauteng. intermediaries and entrepreneurs. Enterprise development, corporate social investment and philanthropy offer opportunities to de-risk early stage investments. Impact enterprises can take the SGBs in the supply chains of government entities pressure off the public sector by providing goods and and corporations often wait well over 30 days services. for invoice payments. This negatively affects the businesses’ cashflow and limits their ability to access opportunities for growth (Anderson, 2018). Examples of public private partnerships have shown the potential that innovative finance mechanisms, such as guarantees for entrepreneurs who lack capital and capacity, can offer to unlock support for early stage entrepreneurs.
Gauteng is the most developed province in South Africa but suffers from disparities of support between wealthier and poorer suburbs. There is a gap in the market for ecosystem players that are interested in investing in infrastructure improvements in underserved areas, such as shared workspaces, internet access, and incubation hubs. GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 29 RECOMMENDATIONS
COLLABORATION Actors in the Gauteng entrepreneurial ecosystem need to be more aligned with one another and with larger national economic objectives. Greater collaboration will reduce fragmentation and the number of players operating in silos, thereby creating a more effective network.
PIPELINE There is an increased need for platforms that successfully match entrepreneurs to relevant support, opportunities, and investments. This would expose entrepreneurs to development programs that are best-suited to their needs and minimize the likelihood of entrepreneurs hopping from one entrepreneurship development program to the next.
RESEARCH AND INFORMATION SHARING There is an increased need for more data, entrepreneurship education, and research ACCESS TO FUNDING in the ecosystem on what works and what FOR EARLY STAGE does not. To achieve this, entrepreneurship ENTREPRENEURS development practitioners need to conduct measurement and evaluation practices in their More early stage risk capital daily tasks. This will provide the ecosystem with should be made available robust information and a better understanding to aspiring entrepreneurs in of each other and lay the groundwork for a the ideation and early stages shared research agenda. to develop their business ideas into commercially viable products. This will encourage more innovative and opportunity driven BREAKING MARKET BARRIERS FOR entrepreneurship. It would VULNERABLE ENTREPRENEURS also ensure a more inclusive Most support programs have their offices in environment for entrepreneurs the plush suburbs of Gauteng. This increases from more vulnerable barriers to market access for entrepreneurs in populations in South Africa, rural and township areas. Increasing programs’ including women and youth. physical presence in rural and township areas will help more vulnerable and aspiring entrepreneurs access support more easily.
GAUTENG | Entrepreneurial Ecosystem Snapshot | 2018 30 For more information please contact the staff of ANDE’s South Africa Chapter:
MICHELLE YORKE Senior Regional Chapter Manager [email protected]
LISA VAN ECK Regional Chapter Program Associate [email protected]
KINGSLEY MPHAHLELE Program Coordinator [email protected]
WITH SUPPORT FROM