Investor - Kalon Venture Partners : Kalon Venture Partners

Investment Details

Minimum Subscription per investor:	As per prospectus
Maximum Subscription per investor:	20% of the fund size (R2 500 000 for Individuals is tax deductable per year and R5 000 000 per company)
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 and ‘A’ Shares participate equally in the return of capital after distribution of Investor Capital Contributions as per the MOI.* * see latest 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.

As a non-executive director of Kalon Venture Partners, Eddy brings a wealth of experience and knowledge to the team. He is the Principal at Contineo Financial Services and serves as an advisor to numerous high net worth families and entities in South Africa and internationally.

Eddy’s career includes serving as a Senior Partner at Arthur Andersen, where he was admitted as a Partner in 1990 and as an International Partner of Andersen Worldwide S.C. in 1994. Throughout his career, Eddy has held various professional advisory roles for both local and international companies, trusts, and high net worth families. In April 2005, he became the Executive Chairman and CEO of Stonehage Fleming Financial South Africa, a position he held until July 2019. Since August 2019, Eddy has been practicing for his own account as Contineo Financial Services.

Eddy’s expertise includes various fiduciary appointments, including directorships, trusteeships, executorships, and curatorships. He provides general and specialist business and financial consulting services to various boards and high net worth individuals and families, their family offices, trusts, companies, and charitable foundations. He also specializes in corporate and inter-generational family dispute resolution, litigation support, exchange control matters, and offshore and local structuring.

Eddy has sectoral experience in South Africa and internationally, particularly in the financial services, retail, FMCG, manufacturing, transportation and logistics, and tourism and hospitality industries. As a non-executive director and valuable member of the Kalon team, Eddy’s experience and expertise make him an important contributor to the success of the company.