Investor

Through Section 12J Venture Capital Companies, the South African government aims to stimulate the economy and promote investment in small and medium-sized businesses, whilst providing tax benefits to investors. The tax relief is potentially 45% for individuals and trusts and 28% for companies, which mitigates the investment risk and significantly enhances the potential return.

We are disruptive technology VC funds led by the most dynamic and well-experienced team in SA, with a combined 200 years of experience. We invest in post-revenue startups, not necessarily post-profit ventures. Our funds invest in entrepreneurs solving African problems with the potential for global application. We focus on providing smart capital as well as on delivering smart returns

If you are interested in investing in our Kalon Venture Partners Fund II please click here to proceed to our Prospectus and Online Application.

Investment Details

 Minimum Subscription per investor: R110 000
 Maximum Subscription per investor: R20 000 000
 Targeted Returns: IRR > 30% per annum
 Times Money: 5 times over a 6-year period
 Capital Raising Fee: 3% of funds raised
Management Fee: 2.5% per annum of total funds raised paid quarterly in advance
Performance Fee: For every 4 ordinary shares issued to investors,
The manager is issued with 1 ‘A’ Ordinary Share.
Ordinary Shares rank in priority to “A” Shares with regards to the return of Risk Capital.
Ordinary Shares and ‘A’ Shares participate equally in the return of capital other than risk capital which is specified in the individual prospectus and typically equal to the current applicable income tax rate.*
* see prospectus for details.

Investment Management

The Kalon Investment Committee with the assistance of the manager applies rigorous investment criteria in its investment decisions and conducts a rigorous due diligence process before committing to any investment.

Kalon will become actively involved in each of the companies invested in order to mitigate risk. This involvement does not only include the executive directors and staff but also the non-executive directors to ensure the maximum value is unlocked from every asset.

Besides a board seat, the Kalon team will be involved in a number of business building activities (engineering growth) including:

  • Strategy development – help search for a repeatable and scalable business model as well as ensure the strategy has a positive impact on the exit strategy – customer/channel introductions at the right level
  • Business development – assist the companies in identifying strategic partners and distribution channels and networks to help scale the business
  • Networks – identify, monitor and continuously evaluate the partner universe
  • Corporate governance – supplementing the board with external experts
  • Financial reporting in line with best practices
  • Involvement in sourcing and recruiting with hiring human capital
  • Sales – guidance with the establishment of a measurable sales process as well as attendance at sales meetings, if required
  • Marketing strategy – clearly articulate value proposition to client base
  • Legal compliance with IP and other legal requirements

Exit Strategies

Our definition of EXIT = full or partial transfer of ownership for (the highest possible) value.

One of Kalon’s key criteria for investment in an underlying company is identifying a clear exit strategy.

We look at the ‘partner ecosystem’ including; competitors, customers, suppliers, distributors, corporate venturing partners, other investors/other sources of funding, etc. and compile a list of these potential strategic buyers.

Even though the exit comes last, the exit strategy is built into the structure of the company from when we make the initial investment. We ensure that the company founders and board are aligned on the exit strategy.

We have found during the past several years, in this increasingly digital and connected world, large enterprises and small enterprises alike are exploring the value that can be created by closer and deeper collaboration with each other. This collaboration has resulted in a dramatic shift toward earlier exits where large enterprises gain new skills, ideas, talent and markets, while entrepreneurs tap into large company’s distribution channels and customer’s bases.

Experience shows that it is the optimum time to exit an investment because large South African companies (trade exits) are accumulating cash on their balance sheets. The good news is that these exits can often be completed in just a few years from startup.

In today’s digital world, companies are being acquired only two or three years after startup. Several factors are driving this change:

  • Web 2.0. Google transforming advertising of large corporations.
  • Growth in private equity and buyout funds.
  • Large numbers of medium-sized companies and individuals buying companies.
  • Preference of larger corporations to grow by acquisition rather than incurring internal research and development (R&D).
  • Reduction of the costs and time required to build new companies via the Internet.
  • The trend toward early exits is creating exciting and lucrative opportunities for entrepreneurs and angel investors.