“It’s the most stimulating environment I can imagine. There’s no copy and paste formula for start-ups. You’re always creating, always learning. I live for this,” says Marc Elias, talking about what drives him in his role as ‘chief disrupter’ at start-up accelerator, Seed Engine.
Not an incubator, nor a venture capital firm, as a business accelerator Seed Engine sits somewhere inbetween.
It was while working in the venture capital environment that Elias realised the South African entrepreneurial landscape needed something to act as a bridge between start-ups in incubation and the venture capital they so desperately needed.
The accelerator model had been tried and tested elsewhere in the world — on notable businesses such as Dropbox — and offered an elegant solution.
“In my time in venture capital, I never saw a single meeting arise between a venture capitalist and an incubator SME. VCs are looking for high-growth businesses that offer high returns and there was a mismatch between the incubator businesses applying for VC funding, and what the VC investors were looking for,” he explains.
After consulting US and European accelerators, Elias adapted the model for the South African entrepreneurial market.
“One of the big things we identified was the need to develop leadership. Venture capitalists are not just looking for investable ideas — they’re looking for investable leaders, visionary entrepreneurs who are able to execute.”
Seed Engine works with ideas-stage start-ups, providing them with R100 000 seed capital and an intense 12-week programme to put the right business, leadership and go-to-market foundations in place. “Our entrepreneurs have access to mentorship, office space, capital and networking. At the end of the course, they pitch to a room of venture capitalists and angel investors,” Elias explains.
The first 2013 intake pitched to a room of 140 investors and every one is currently in advanced negotiations with investors. Unsurprisingly, word has got out and the demand to get into the programme has seen a dramatic increase.
“We launched in September 2012 and between September and December received 350 applications. We’ve now just received 1 500 for our next intake in February 2014,” says Elias.
But from those, only seven businesses have been selected. The programme is small, focused and highly effective. You’ll be hearing more about this one in the years ahead.
Seed Engine found a gap as SA’s first accelerator, putting high-growth potential businesses in touch with real investment opportunities.