How techies with ideas can raise venture capital to start up a business

Once you have raised the necessary venture capital to launch your innovative new technological concept or service into the market, you're set for success, right? Wrong! A study that has recently been concluded at a world-class university showed that start-up businesses with no venture capital had a 70% greater survival rate than the ones who kicked off with venture capital. This is just one of the astounding facts that came to light during the launch of Business Beat, which took place at The Innovation Hub on the 3 November 2008.

“Business Beat, a new Maxum initiative, will serve as a platform from which ICT entrepreneurs with viable innovative technology concepts or services will be successfully elevated into the market place,” explains Dr Jill Sawyers, Manager of Entrepreneurship at The Innovation Hub. “This will be done through matching these entrepreneurs with MBA Students as well as a consortium of knowledgeable and relevant institutions and entities that could aid them to shape their innovative ideas into solid, profitable businesses.”

Understanding what providers of venture capital want and how to prove to them that you can deliver is just one of the most critical concerns of start-up companies; this was highlighted during the Business Beat Forum. “Many great ideas have never come to fruition because inventors have failed to take the two most important factors into consideration: how is this idea going to make money and how is this idea going to make money as soon as possible,” states Eve Dmochowska, Idea Implementer of Idea Bank. “To succeed in the long run, you have to concentrate on your revenue model from day one.”

These facts were further compounded through the input of Greg Voigt, CEO of Blue Catalyst, and Joan Rangwaga of Triumph Venture Capital. “The expectations of investors will not change,” said Voigt. “They are looking for businesses with extraordinarily high growth potential and extraordinarily high profit potential. In other words, before committing to an investment, we need to know that the business will create the expected return.”

“It is exactly in this area that partnering with Maxum and Business Beat will add tremendous value for prospective entrepreneurs,” says Patricia Dlamini, Manager of Maxum Business Incubator. “Any business idea needs to be commercially viable. To determine and prove this, Business Beat will match innovators of high-tech ideas with people who have proven skills to conduct effective market research and compile sound business strategies. Once that process is complete, an entrepreneur will have an accurate projection of the potential of their business, whether it is indeed feasible and of course have everything they need to prove to venture capitalists that the idea is worth investing in.” Patricia also explains how difficult it is for entrepreneurs to find such investors. Through the Business Beat Forums, entrepreneurs will also be put in touch with these institutions, which are normally inaccessible.”

To kick-start the process and enable some entrepreneurs of high-tech innovations to develop their new business ideas, Business Beat has launched a fantastic opportunity through which prospective technology entrepreneurs can win a Maxum Pre-Incubation Start-Up Package to the value of R8 400 that includes the following:

* Free plug-and-play shared office space for six months (a R500 deposit, telephone costs and consumables for own account)
* Attendance of Izazi entrepreneur forums which provides the opportunity to network with like-minded business people
* Exposure to experienced mentors and the Maxum Management Team who will provide guidance on the full process of decision-making in business, from determining what is necessary to converting an idea into a solid, profitable business
* An opportunity to first sample the benefits before becoming part of a full Maxum Business Incubator Programme
* Introduction to venture capitalists once it has been established that your business idea is commercially viable.

To stand in line for this once in a lifetime opportunity, the business idea must demonstrate technological innovation in at least one of The Innovation Hub's focus areas: information communications technology; biosciences; electronics; engineering of advanced manufacturing and/or materials, or energy and the sustainable environment. Entrepreneurs who meet this criterion simply have to follow five easy steps:

1. Compile a five-slide PowerPoint presentation that outlines the business concept, as well as the commitment to the enterprise (For examples, contact bngwenya@theinnovationhub.com);

2. Prepare to present the idea/concept to a group of MBA students who, if they see an opportunity to build a business around this idea, will engage in discussions to further the matter;

3. Once it has been agreed that the idea is a prospective business opportunity, a business proposal will have to be submitted to Maxum, for entry into the Pre-Incubation Programme;

4. Should the business plan appear to be viable, it will be presented to the Selection Advisory Panel, which will determine whether it qualifies to form part of the Pre-Incubation Programme;

5. Applicants who have passed the evaluation successfully will be invited to pre-incubate their business ideas and locate their businesses at the Maxum Pre-Incubation premises at The Innovation Hub in Pretoria with the objective to eventually be linked with venture capitalists to fund their new businesses.

Very importantly, all entrepreneurs who would like to participate should take note of the following critical dates:

* Deadline for receipt of PowerPoint applications: 2 February 2009
* Successful applicants will be invited to present their idea at a Business Beat

Function: 9 February 2009

* Business Beat Function that will link entrepreneurs with key stakeholders in the process: 16 February 2009
* Deadline for receipt of business plans/proposals for submission into the Maxum Pre-Incubation

Programme: 1 March 2009

* Notification of winners of this competition: 31 March 2009

Why form part of the Maxum Pre-Incubation Programme?

With an 80% success track record of companies who have been part of Maxum and who are still in operation as successful businesses, there is no doubt that Maxum Business Incubator is the place to be. So grab this chance with both hands and enter now. For more information, e-mail Busi Ngwenya on bngwenya@theinnovationhub.com, call 012-844 0084, or visit http://www.maxum.co.za.