The Tenacious Matsi Modise Has Her Game Face On When It Comes...

The Tenacious Matsi Modise Has Her Game Face On When It Comes To Funding

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Vital Stats

  • Player: Matsi Modise
  • Organisation: SiMODiSA
  • Position: Managing Director
  • Visit: simodisa.org

Most early-stage entrepreneurs face two hurdles: The first is finding a great idea. The second is finding funding. The nature of these two hurdles differ greatly. The search for an idea is a journey of discovery. While trying to find an idea can undoubtedly be frustrating at times, it can also be tremendously rewarding.

It’s a search filled with endless possibilities — the entrepreneurial equivalent of a vision quest. And those who are successful in this quest often discover something much greater than a simple ‘business idea’: They discover a purpose for their lives.

Then there is the search for funding. And sadly, this is a far more prosaic process. If a search for an idea is a vision quest, the search for funding is a cage-fighting match or an ultra-marathon — even if you end up being victorious, you’re guaranteed to be left bruised, bloodied and severely parched.

Related: Work Smarter Says Matsi Modise

Regardless of the funding avenue you opt for, you’re in for a long and strenuous journey. There will be lots of paperwork, lots of pitches — and lots of rejections.

So what is the secret to success? Well, you’ll need the same things any cage fighter needs: Tenacity, endurance and the ability to take a punch. A thick skin won’t hurt.

SiMODiSA is a South African organisation that aims to act as the ‘cutman’ in the corner of the young entrepreneur — a platform that offers ‘hand-ups to start-ups’ and intends to break down the barriers standing in the way of SMEs.


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One of its goals is to help start-ups access funding. Entrepreneur spoke to the organisation’s Matsi Modise about the process of securing funding.

How realistic is a search for funding? Is there funding out there?

It really depends on the level that your business is at. If you’re going to try and attain seed funding, you’re probably going to struggle. Investors want to see that you have a proven business model before they invest, so you need to bootstrap for a while and prove that your business is working.

Once your business has been up and running for a while it becomes far easier to get funding. If you have a great business, you will find people willing to invest.

So how does one go about finding funding? Where should the search start?

The search should start with a careful appraisal of your operation. You need to establish whether you are ‘funding ready’.

Resource: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

matsi-Modise-woman-entrepreneur

And what does it mean to be funding ready?

Once again, it depends on the stage that your business is at. If you’ve been operating for a while and need money to scale — which is when you’re most likely to get hold of funding — you should be able to prove that you’ve been keeping records and have a good handle on the financial state of your business. You need to know your numbers.

You also need a good understanding of your industry. You need to be able to talk intelligently about the prospects for your business. It’s important to show that your business truly can scale. Moreover, investors don’t want to hear over-optimistic projections — you need to be able to back up your claims.

Are there any resources that can help entrepreneurs find out if they’re funding ready?

A good place to start is the local website Fin Find. It’s a one-stop shop for finance advice where you can learn about access to finance and find out if your business is ready for finance. The site has a bunch of great finance readiness tools, including a finance readiness quiz that will give you a good idea of the state of your business.

Once you feel as if you’re ready, where should you start looking for funding?

At the moment, there is no central source in South Africa that allows entrepreneurs to understand the funding landscape at a glance. A great international example is Digital.NYC. The site has its finger on the pulse of the New York start-up scene, and it has a very useful list of investors that entrepreneurs can approach.

South Africa doesn’t have anything like this, but SiMODiSA is in the process of trying to create this kind of resource for local entrepreneurs.

Related: New Ways SMEs Can Find Funding

How many investors and venture capitalists are there in South Africa?

When it comes to private funding, most of it tends to be of the equity-partner variety. This is a good way to get hold of funding, but it can also be risky. You need to establish what role an equity partner will play in the business. Will he or she be a silent partner, or will they have an active role in the business? You need to ensure that the intentions and expectations of all partners are aligned.

As a local industry, VC funding is incredibly small. Officially, we have about 30 local VC companies, but in reality, only a handful are very active. Venture capital is hard to come by in South Africa. That said, it does exist. Operations such as AngelHub Ventures, Edge Growth and 4Di Capital are good places to start.

What about governmental sources of funding such as the IDC?

IDC-fund-logo

This is certainly an avenue worth exploring, though there tends to be a social component involved when it comes to governmental funding. Social entrepreneurs — or founders who can prove a significant social impact — are the ones who tend to have the most success here.

Some entrepreneurs also find the application process daunting and are put off by all the paperwork involved, but it is worth the effort if you manage to navigate the bureaucracy successfully. My advice would be to visit the IDC’s website. There you’ll find detailed information on what the IDC expects in terms of a business plan, etc.

As an organisation, SiMODiSA hopes to make governmental funding easier to access in the future. We’re also trying to facilitate ‘partnerships’ between government and private investors. The ideal would be to facilitate a situation where government matches the funds offered by a private investor.

Related: IDC Funding

What other ways are there to get hold of funding?

Well, one great way of getting hold of funding — but which is often overlooked — is entering entrepreneurship competitions. It’s not only a great way of securing funding, but also of getting your business out there. Winning an entrepreneurship competition often brings with it a prize and excellent exposure.

For example, StartupSA — a competition put on by SiMODiSA — was won by a local on-demand cleaning service called SweepSouth in 2014. The entrepreneurs, Aisha Pandor and Alen Ribic, got a chance to visit Silicon Valley for two months. The exposure they received really helped them, and they secured funding from investors such as Vinny Lingham and Polo Leteka in 2015. Early in 2016, SweepSouth secured R10 million in funding from Edge Growth. So it really is a great success story.

Related: Funding And Resources For Young SA Entrepreneurs

What advice can you offer when pitching to investors?

Know who you’re pitching to. You need to know what your potential investors are looking for specifically. What sort of ROI are they looking for? What kind of horizon do they have in mind? Regardless of whether you’re approaching a VC firm or an organisation such as the IDC, you need to do your research and know what attracts them. If you approach the wrong kind of investor, you’re just wasting your time.

How should one prepare for a pitch?

As mentioned earlier, you need to know your business well and make sure that you have a good handle on the business. You need to prepare your pitch. Your idea and your business is important, but your pitch is also important.

As the saying goes, investors bet on the jockey as much as the horse. They need to believe in you. They want to see that you are ready to be funded. If you want to be offered the opportunity, you need to prove that you can handle the responsibility.

  • finfindeasy.co.za — Fin Find offers great tools for establishing the financial health of your business.
  • idc.co.za — The IDC’s website provides good insight into what’s needed when applying for funding from a government entity.
  • simodisa.org — SiMODiSA is an organisation that aims to help SMEs overcome the hurdles that stand in their way.
GG van Rooyen
GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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