Initiative aims to boost SMEs

A new initiative to develop businesses has been launched by a top South African growth equity fund manager, Knife Capital.

The group has developed a later-stage business accelerator in Cape Town to assist post-revenue high-growth technology enabled Small Medium Enterprises (SMEs) to become sustainable and fundable.

Up until know, Cape Town entrepreneurs have exposed to regular start-up competitions, networking initiatives and business incubators such as the Bandwidth Barn, AngelHub and 88Mph.

Owners also declare that the Grindstone Accelerator is uniquely positioned to take the top SMEs to the next level.

Grindstone CEO Andrea Böhmert has called it part accelerator, part investor and part advisor.

“Despite a flourishing start-up scene producing companies with innovative technologies and great potential, there remains a significant gap for high-growth SMEs with proven revenue traction to scale and grow organically” says Bohmert. “On a daily basis we get funding requests from companies that are 80% ready but in need of closing some significant strategic and operational gaps before they can scale. Grindstone focuses on getting each of the participating companies closer to 100%.”

The Grindstone Accelerator is backed by Knife Capital with support from the Department of Trade and Industry (DTI).

It will assist 50 companies over the next 3 years via a range of interventions designed to build a foundation for growth, create relevant business networks and enable these companies to take advantage of market access opportunities. Company executives will also attend the Knife Capital investment course at the start of the programme in partnership with the University of Cape Town’s Graduate School of Business (UCT GSB).

Knife Capital manages Mark Shuttleworth’s HBD Venture Capital’s South African portfolio of investments and was named the South African venture capitalist of the Year in 2012 and 2013 by Acquisition International Magazine. The company boasts a significant track record of adding value to high-growth technology enabled companies, including Fundamo which was sold to VISA for $110m and CSense which was sold to General Electric. “We created the Grindstone Accelerator by effectively compressing our venture capital engagement model of aggressively growing a company for 3-5 years into an intense 9-month programme” says Eben van Heerden, Knife Capital CEO.

The application and selection process will kick off in Aug 2013 with an interactive Funding Readiness Workshop aimed at providing tangible information to 50 SMEs about the various financing options. 20 companies will then be shortlisted for the early-stage investment course and gap analysis bootcamp, where 10 companies will be selected as participants for the first year of the programme.

High-growth SMEs that are interested in joining the Grindstone Accelerator Programme can start by completing the Knife Capital SA Venture Funding Survey

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