How to Find Private Funders

Starting a business without capital is possible but not easy. It’s also not easy to acquire loans and government grants. As a small business owner, you need to think outside the box when it comes to funding. A great way to receive funding is to find private funders.

Private funders are individuals or organisations that have specific interests and goals. Private funders usually target businesses which are ready to be commercialised, start-ups, and market disruptors.

If you are a small business, private funders are a great way to get capital. You will need to have a robust business plan, and a clear marketing strategy.

In this article, we will explore the ways to find private funders in South Africa.

Kgatelopele (Private Equity and Venture Capital)

Kgatelopele is a 100% black-owned organisation that invests in a variety of businesses. The company mainly focuses on private equity and venture capital asset classes. The firm has invested in many companies including SIM-MEX, K-Energy, and K-Consulting.

The firm looks for companies with potential growth and an aim to raise capital. Additionally, the firm forms partnerships with small to medium-sized enterprises (SMEs) without the owner relinquishing control.

Companies targeted by the firm include:

• Corporates and SMEs.
• Mining companies.
• Public sector tenders.
• Municipalities/Governments
• Renewable energy independent power producer procurement programme.
• Shale gas fracking community upliftment programmes.

Knife Capital

Established in 2010 Knife Capital is a privately owned investment group. Knife Capital has invested in companies like Quicket, Snapplify, and Wamly.

To receive funding from the firm, you will need to match the criteria. Qualifying criteria is:

• Have a well-defined product and recurring revenues.
• Your business must address a clear pain point for your customers.
• Your business must target a sizable market.
• Have an impressive management team.
• Your business must achieve high gross margins.
• You must have a clear governance process in place.

The company focuses on innovative B2B technology companies. The focus includes but is not limited to:

• Enterprise Technology – These are companies developing software infrastructure, apps and services. These developments must drive productivity, increase revenue, convenience or cost reduction for enterprises.
• Hardware and Deep Tech – Enterprises developing technologies that support advances in computing, manufacturing, and other sectors.
• Healthcare – Businesses use technology to create new products and services for the health and medical markets.
• Educational Technology – These are companies using technology to create new products and services for the educational market(s).
• Financial Technology – Enterprises developing software and technology to better manage financial operations and processes. These developments need to support or enable banking and financial services.

You can download the Knife Capital pitch deck to help you prepare your application.

Vumela Fund

The Vumela Fund is a local venture capital firm established by FNB. The company focuses on investing in high-growth SMEs. The company also seeks to generate returns for its beneficiaries: the Shalamuka Foundation and the FirstRand Group.

For selected SMEs, the Vumela Fund helps with capital, access to the market, and increased business network for further investment.

The firm offers three funding options: purchase order funding, equity or debt growth funding and venture debt. The firm has funded various companies including Opti-Baby, Prominent Tulips, and Everlytic.

To qualify for funding, you must meet the following criteria:

• Majority black-ownership and a valid BEE certificate.
• Have an annual revenue of R1 million to R50 million.
• Be a participant in an Enterprise and Supplier Development programme sponsored by FNB or managed by Edge Growth.

To apply for funding, click on the link and answer the questions.

Enygma Ventures

Enygma Ventures is an investment firm aimed at helping female entrepreneurs. The company invests in businesses with an established track record, a proven revenue model and established growth in Sub-Saharan Africa.

Enygma Ventures provides equity funding with some additional debt and revenue-sharing agreements. The company has invested in various SMEs including Koa Academy, Black Mamba, and Adbot.

The firm selects businesses through an annual application. You can take an online quiz to see if your business is eligible. To qualify for funding, you must meet the following criteria:

• Your business must solve an identified problem in any Sub-Saharan region.
• Your business must be scalable.
• Be able to operate on a large scale.
• Have a large addressable market.
• Businesses must be female-owned or have a mixed-gender leadership.

If selected for funding, you will receive:

• Mentorship and training.
• Assistance with validating your business.
• Early-stage funding for established businesses.

There are just a few private funding platforms in South Africa. Before applying, remember to create a comprehensive and robust business plan. Most of these firms are looking for businesses that address issues affecting South Africa, so you need to be innovative.

You can also book an appointment with one of our experts for advice about finding private funders.