Business Investors In South Africa
Entrepreneurs can now turn to online angel networks to secure funding for their businesses.
Unlike banks or other financial institutions, angel investors are willing to take a chance and invest smaller amounts of money in high-risk businesses, with the hopes of gaining high returns, within a five to ten year period.
These wealthy entrepreneurs use their own capital to finance projects that they believe will be profitable, or where they can use their talent and skill to mentor new business owners.
Angel investor capital fills the gap in start-up financing between friends and family and large venture capital investment. It is usually difficult to raise more than a few hundred thousand rand from friends and family, and most traditional venture capital funds usually only consider multi-million rand investments.
Angel investment is therefore a common second round of financing for high-growth start-ups. Because it’s extremely high risk, a very high return on investment is normally required.
Why Online Angel Investors?
Online platforms provide entrepreneurs with quick and easy ways to present their projects to a large number of investors and give investors access to a comprehensive range of business ideas and investment opportunities.
They also highlight that the process of connecting business owners and business angels online and provide great opportunities for entrepreneurs based outside of large metropolitan areas and business owners who don’t have the right connections, to get in contact with angels.
These online networks give anyone with a great idea, the chance to get the funding they need to get their business off the ground or expand.
A list of South African Angel Investors available online
The South African Investment Network connects entrepreneurs based in South Africa with Angel Investors both locally and internationally. You simply register your idea online and Investors can view your project and connect with you. They claim to make 5, 000+ entrepreneur-investor connections each month.
AngelHub Ventures is an angel seed fund investing firm, focusing on lean startups with disruptive business models and technologies. AngelHub pools funding, expertise & networks from a diverse range of early-stage Angel Investors for investment in high-growth South African ventures. AngelHub partnered with FNB Private Clients in 2012 which has further stimulated their portfolio of investors.
Investors Network is a platform and meeting place for South African Entrepreneurs and Investors. The business provides both face-to-face networking meetings in Johannesburg, Cape Town, Durban, Bloemfontein and Port Elizabeth as well as on-line networking facilities.
Mzansi Gold is a South African angel network who offer a selection and connection service: screening and selecting the top entrepreneurs, and connecting them with angels in their network. They also offer coaching as part of the process.
Google Umbono project is aimed at incubating African Tech entrepreneurs in Cape Town; taking them from early phase start-ups to bankable businesses. It is an exciting offering for users and potential investors.
Angel investing gives South Africa wings
In many countries business angels constitute the largest source of external funding, after family and friends, in newly established ventures. Companies backed by business angel investors have been important contributors to economic growth and of creating new jobs.
This non‐institutional equity finance of business angels, which is still relatively untapped in South Africa compared to the USA, where the angel market is five times larger, could become an essential driver to build more high‐growth SMEs.
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