The impact investing market now stands at around US$715 billion globally and this figure is climbing steadily[i].What’s more, 43% of impact investors have funds allocated to Africa, with 52% of investors planning to increase their African investment over the next five years[ii]. With South Africa being the largest market for impact investing within Southern Africa[iii], are our social entrepreneurs ready for this investment?
Ashleigh Sibanda, Programme Manager: Business Incubation at business growth specialists Fetola explains that investment readiness refers to the capacity of an enterprise to understand and meet the specific needs and expectations of investors. “While there are thousands of social enterprises in the country, not all of them possess this. In fact, the World Bank cites this as one of the reasons why social enterprises fail[iv] ”
She notes some of the elements of investment readiness that many social entrepreneurs lack:
- A clear business model that encapsulates the business strategy and aids investors in evaluating enterprises that are of interest to them.
- A defined finance strategy that shows the entrepreneur’s financial management ability. This appeals to potential investor since it mitigates the risk involved in their investment.
- A clear and viable financial model forecasting the company’s expenses, revenue, costs, and other elements to establish its viability for investors.
- A defined primary impact matrix since outputs, outcomes, and impact are key matrices for investors.
- Fundraising collateral such as a pitch deck and business model canvas which are used when reaching out to potential investors.
- A targeted investor database identifying a hit list of the investors that cater to their particular niche.
To help these businesses become investor-ready, Fetola, together with FNB, will be giving 50 entrepreneurs the opportunity to participate in the 2021 Social Entrepreneurship Impact Lab™(SEIL) programme. Running for the second year in a row, SEIL supports the growth and investment potential of organisations that are tackling social, environmental and economic issues in South Africa.
“Many entrepreneurs have no idea about where to even start when it comes to getting investment. Sadly, this is why so many small businesses fail within their first year. This programme provides this insight and helps entrepreneurs to fortify their foundation so they can be propelled forward,” concludes Sibanda.
The 18-month SEIL programme will be split into two phases. During the initial 12-months, 50 entrepreneurs will get access to practical business growth support along with an introduction to investment readiness. Twenty high potential enterprises will then be selected from the original 50 to receive six months of intensive investment readiness and growth acceleration support.
The deadline for applications to the 2021 SEIL programme has been extended to Wednesday, 1 December 2021. Click here to apply, or here for more information.
About Social Entrepreneurship Impact Lab™(SEIL)
SEIL is a dynamic, 18-month programme aimed at accelerating the growth of 50 South African social entrepreneurs wanting to scale their business models and improve their investment readiness. The programme is split into two phases. During the initial 12-months, entrepreneurs get access to targeted and practical business growth support along with an introduction to investment readiness. Twenty high potential enterprises will be selected from the original 50 to receive further investment readiness support during the six-month second phase. For more information, go to https://fetola.co.za/entrepreneurs/opportunities/social-entrepreneurship-impact-lab
[i] https://thegiin.org/assets/
GIIN%20Annual%20Impact%20Investor%20Survey%202020.pdf
[ii] https://thegiin.org/assets/GIIN%20Annual%20Impact%20Investor%20Survey%202020.pdf
[iii] https://thegiin.org/assets/documents/pub/Southern%20Africa/GIIN_SouthernAfrica.pdf
[iv] https://www.weforum.org/agenda/2017/06/3-reasons-why-social-enterprises-fail-and-what-we-can-learn-from-them/