Venture Capital comes to town
Soon and very soon much like Santa Claus, some serious Venture Capital is going to enter the start up entrepreneurial community and line our pockets. The kind that offers some niceties not only in cash flow but a definite stamp of approval for scaling beyond the local immediate market.
This might be obvious to some or a general expectation. What I am looking forward to is how Venture Capital will serve a growing start up community. It is not so much about the boost to getting ideas funded, but I am more excited about the institution that will be providing the funding in the near future. Who it is, can only reveal over tea, your treat.
The market seems like it is warming up to the idea of being patient in giving money to small business that want to grow from a small to medium enterprise. I am throwing grass to the wind by guessing that it is likely to be that this particular type of Venture Capital would be patient, regular cash injections calculated at a daily rate with monthly payouts.
After having listened to some local SME thought leaders, the message comes across that more small business should and must scale quickly from small to medium with little respect to the market. The NCCI also plans to redefine the definition of an SME, more on that later.
So what happens to those start-ups, hawking business and artisanal cottage industries that are often overlooked as not having the gusto to scale up operations. Should they merely accept their fate and slowly be edged out by the competition?
This is where patient venture capital comes in as long as they can prove profitability and a value proposition that guarantees some positive cash flow once funding has ceased. Take note how I did not mention the issue of profit.
Again, the kind of patient capital needed for the usual meme kapana that sees the opportunity to scale up.
For more established and go-getting entrepreneurs, landing the Venture Capital funding is a small matter of separating the wheat from the chaff, aka pitching. Getting that right comes with failing at a few pitches.
The current funding model is changing, not referring to commercial banks here but actual Venture Capital like initiatives. Taking the example of the Bank of Namibia’s change in funding only enterprises well into the N$10 million mark. It would be interesting to see what type of ventures BoN is investing in. Probably those ventures that have earned their worth in salt to take on such responsibility. Possibly another indicator that BoN is leaving the messy work of funding start up businesses.
Again, what happens to the ‘Small’s’ trying to sprint to the Medium base camp on their way to the Large summit?
Earlier this year after attending a youth entrepreneurship get together in Windhoek, it become clear that the typical hawking or one-man show business should see itself as a legal entity on the market for Venture Capital funding and that the market product fit combined with a convincing value proposition is the guiding needle to their business success. And getting to the Medium base camp.
Taking into consideration that the hawking business actually does a bit of paperwork depending on when Business and Intellectual Property Authority (BIPA) can get this services to them.
I am using the corner-street vendor merely as an example only, so as not to overly fetishsize entrepreneurship, particularly youth entrepreneurship, as a panache to service delivery issues facing customers.
This to me seems like a valid starting point in unpacking the notion of youth entrepreneurship with kitten gloves.