South Africa is experiencing an increase in the number of new investment channels due to a lack of funding for early stage entrepreneurs.
Recognising this gap in the market for companies seeking expansion capital and start-ups who require funding, as well as the need to stimulate the post-recession economy, private business investment company Corculture launched its innovative online portal in 2012. The company is making waves in both the venture capital and private equity space by offering a unique, innovative and effective digital means of exposing investment opportunities to a group of high net worth individuals who are actively seeking investment opportunities.
The company is managed by Johannesburg-based businessmen and Corculture CEO, David Seinker, an expert in residential property and a “serial entrepreneur” as well as Brian Horwitz a qualified Chartered Accountant with a background in finance and property who took on the role of Executive Director. Seinker saw a gap in the market to help other entrepreneurs to achieve success and took the concept to Horwitz, whose passion for analysing companies and their potential for success “had him hooked from the start,” said Horwitz. Seinker wanted to help entrepreneurs by connecting them to his investment group. In search of early-stage companies that have already taken their product to market and gained traction, thereby proving their business model, Corculture offers entrepreneurs a new method of accessing finance. Since its inception, the company has already received over 250 applications from entrepreneurs seeking investment.
“Although we look at all deals it is important for us to target early stage post revenue businesses with high growth potential,” said Seinker. “There is a gap in the market globally for the funding of startup – early stage businesses. We are trying to close this gap by encouraging investment into entrepreneurs in this space. In order to create jobs we have to invest in these early stage businesses. Government also needs to take on the risk that others aren’t prepared to and this will be done through setting up new venture capital funds.”
Entrepreneurs submit their application via Corculture’s online platform and should their application be compelling enough, Corculture will meet with the entrepreneur and a review and assessment of the business plan, historical financials and projections will be conducted. Once approved to be presented to the investment group,Corculture will get the entrepreneur investor ready by providing a management report which includes any gaps and weaknesses in the business plan and financial model; providing a self-assessment test to alert the entrepreneur to the requirements of a private equity transaction. The entrepreneur then has the option to either load the business opportunity on the platform or a deal summary can be sent through to the investment group.
“Some see us as the ‘Dragon’s Den’ of South Africa as we have a group of high-net worth individuals who are eager to engage in investment opportunities. Banks are not lending to early stage companies, so this leaves a gap in the funding market. The bottom line is that the venture capital market in Africa is underdeveloped but still has much growth potential, and we believe that new digital platforms such as this will help accelerate this growth, particularly due to the online focus and measurability.” continued Seinker.
”This ease of engagement of the process is attractive to entrepreneurs. Confidentially and privacy is a key focus for us and non-disclosure agreements are signed prior to any meetings with the entrepreneur.”
There are a variety of approved entrepreneurs, with investments ranging from, but not limited to financial services, property, technology, e-commerce and manufacturing.
“We have been very impressed with the quality of applicants applying with us for funding. There are some incredible entrepreneurs out there and they have seen us as a real opportunity for effectively raising funding. With the healthy combination of experience and knowledge amongst our entrepreneurs, it confirms there is a bright future for our country,” concludes Seinker.