Mark Shuttleworth’s venture capital company, Here Be Dragons (HBD), is looking to make at least one more investment of between R10-million and R25-million in local, early stage businesses this year – and technology is one of the sectors in which it is likely that this investment could be made.
"Although the focus is on all companies with innovative products with the potential to expand internationally, experience has shown that technology remains a sector in which scalable companies have a high potential to expand fast," explains HBD CEO, Julia Fourie.
It is for this reason that technology remains one of the top three sectors in which the US is channelling venture capital funding. International examples of technology companies that started from venture capital include Google, Microsoft and eBay.
As venture capital is a high-risk, high-return industry it is important that the companies in which HBD invests have the ability to grow at a higher than average rate.
Fourie believes that there are many talented South African businesses with the potential to make it on a global stage but fail due to lack of guidance, funding and expert knowledge.
"These companies often try to grow too quickly or to go the road alone," she says. "Success takes courage, and in partnering with our investment companies, we offer not only capital but expert advice and mentorship too.
"Key to successful partnership is finding the right fit between HBD and the investment company, as sharing the same goals and ideals maximises the chance of success. It is important that applicants do their homework, assessing the goals and philosophies of the investment partner against their own. Applicants should have a solid understanding of their business needs, and must be able to present a sound business plan taking into account the relevant economic outlook."
The new investments will form part of HBD’s existing Fund2, and will be the last investments for this particular fund.