The irony of Venture Capitalists in South Africa is that they don’t really venture

Venture Capital and Entrepreneurship come together on the Matt Brown Show

“The irony of venture capitalists in South Africa is that they don’t really venture,” said entrepreneur Benji Coetzee as Matt Brown kicked off the second in his Secrets of Scale events, hosted by MESH Club in Rosebank.

In keeping with the Matt Brown Show’s quirky, honest and above-all authentic take on the challenges facing entrepreneurs, Benji wasn’t shy to share her experience of local VCs while on the funding trail, even though the other two guests of the event were VCs themselves – Keet van Zyl, founder of Knife Capital, and Clive Butkow, former COO of Accenture and currently CEO of Kalon Ventures.

“Every time you think you know what a VC is looking for and you’re ticking all the boxes – big white space, addressable market, MVP, traction, first users – the ladder of proof gets longer,” continued Benji. “You need all of that, and more, and you might get lucky. I was fortunate enough to persuade my investors to back me; to believe in my vision. But I knocked on a lot of doors to get there.”

Two of those doors were her fellow panellists – neither of whom invested in her business, EmptyTrips, which made for a lively discussion on how VCs work and what they look for, giving the audience in the room, as well as those who were watching the live webinar, unparalleled insights into how funding in South Africa really works.

“I love it when my guests disagree with each other,” says the show’s host and founder, Matt Brown, CEO of Matt Brown Media. “There’s nothing more valuable than debating a topic and looking at it from all angles. The ability to scale a business is extremely challenging, and my aim is to give entrepreneurs the best tools and insights to take back to their businesses and really push the needle.

“When I can get three people with the experience and skills of Benji, Keet and Clive together, I know everyone is walking away with incredible lessons they can start implementing the next day.”

The Investor’s Perspective

“We’ve seen 600 companies and we’ve made four investments,” said Clive. “Of those 600 businesses I probably really liked 300 of them; they were good businesses – they just weren’t VC businesses because they didn’t have the scalability we look for. We need to 10x our investments. Some businesses can scale – but most can’t.”

So, what should entrepreneurs who are interested in scaling their business – and potentially landing an investor – be concentrating on?

First, said Clive, consider whether or not you really need VC funding. “The best businesses are customer funded. If you can get your customer to pay you, you’re proving you have a business that’s solving a burning need. Not only does that mean you have a great business that can scale, but you’re more attractive to funders as well.”

Benji, who invested everything she had into her business before attracting a funder agrees. “I needed to prove how serious I was and that there’s a market for my solution. I wasn’t going to attract an investor with no skin in the game and without proving my model.”

Keet agrees. “Every single business we’ve invested in had customers; they weren’t just ideas. We’re interested in businesses that come through our network. We want to know the entrepreneurs, understand their businesses and see how they are hitting – and exceeding – their milestones. Approach an investor and start building a relationship before you need money. Give them a front-row seat into your plans and how you’re executing them.”

The Power of Networks

According to all three panellists, it might seem daunting to network and approach investors, but the reality is that building your network begins with something as simple as attending events like Secrets of Scale, or joining a curated member’s club like MESH Club.

“Identify ecosystem evenings and targeted networking opportunities,” said Keet. “VCs will tell you that 93% of deal flow comes from within their networks. Get to know us. I’m passionate about the journey of an entrepreneur. Send me your newsletter. Tell me who you are, and then keep me updated. I love that stuff.

“It’s not that difficult to get into networks and bump into people at events. And once you do, it’s much easier to send a follow-up email and ask for a coffee.”

This is exactly what Jonathan Meyer, founder of MESH Club, had in mind when he launched Africa’s first curated member’s club for entrepreneurs to meet and work in the day and connect and socialise in the evenings.

“Our primary focus is to connect entrepreneurs with like-minded people. That’s what events like this are for: Information sharing, connecting and giving everyone the space to grow their networks. This is the second event in a series of four, and we’ve already seen how important it is for entrepreneurs to open up and share their experiences. It’s so valuable for growth. We’re looking forward to the next two events, and we know there will be more to come.”

Part 1 – Funding your scale (David vs Goliath)

In this segment we’ll share insights related to funding your businesses scale using venture capital vs the benefits of bootstrapping it yourself. You’ll discover what VC’s look for when backing “scalepreneurs” and you’ll hear first-hand about Benji Coetzee’s experience competing at the world cup of startups in Silicon Valley.

Part 2 – Formulas to scale (How to scale any market)

We will reveal proven formulas to scale across for any business in any market and Clive, Benji and Keet share practical “how to” steps that you can apply right now to start scaling your business.

Part 3 – Technology (Enabling scale through technology)

Technology is arguably the single biggest enabler of a businesses scale. But what kind of technologies should an entrepreneur consider and more importantly adopt on their scale journey. We’ll also discuss the technologies that are shaping the current and future world of business and how entrepreneurs can take advantage of these technologies to scale their businesses, and much, much more!