Tuesday, September 16, 2008

Increasing demand for business funding in South Africa

The recent trend regarding the strong demand for business funding in South Africa showed few signs of losing pace according to a recent research study conducted by the Industrial Development Corporation (IDC). The IDC who is the government body responsible for amongst other issues for injecting venture capital into viable new businesses ideas in South Africa.

The good news is that with the demand for business funding increasing, research suggest that the availability of business funding is following suit.

Christo Fourie, head of venture capital special business unit (SBU) at the Industrial Development Corporation (IDC), said prior to the formation of the SBU in April last year, the IDC conducted research to determine likely activity levels.

“The unit was formed to fill a funding gap and its mandate is to provide funding to businesses in their seed and start-up phases of development. We will fund the development of new and innovative technologies in any industry and not just the typical areas such as information and communications technology,” Fourie said.

However, since the IDC became active in the venture capital arena several new entrants have come into the field.

“There is a lot more interest in investing in new companies. However, there is still room for more players and we welcome additional competition because there is only so much that one team can do,” Fourie said.

It seems that venture capital firms are keen to invest in the right ideas. Business owners often make the mistake of thinking that funding is difficult to come by, when in actual fact there is plenty of funding to go round, provided that you have a viable business idea, clearly outlined in a succinct business plan.

In a recent visit to a business funding and venture capital conference in London I was astonished at the levels of funding actually available. In conversations with a range of venture funders it became clear that venture capital firms need to invest money in new ideas for their business models to work. These companies are often frustrated by the number of investable business plans they receive, especially at higher levels of funding required.

Acquiring funding for your business does not have to be the large obstacle entrepreneurs make it out to be and help is now at hand with aquiring the right venture capital firm for you through SA Business Plans venture capital research service. The real challenges lies in the next phase of your business when putting the strategies laid out in your business plan into place and being flexible and innovative enough to turn the idea into profit and to grow the business to fulfill your vision.

Remember that it may often be worth it to ask for guidance or support, and may find that obstacles are there to be overcome especially with the right support.

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