Entrepreneurs in the Western Cape have access to a range of venture capital (VC) initiatives that are designed to improve and grow entrepreneurial activity and provide businesses in the region with funding and support. Although these initiatives, which are run by both government and the private sector, provide entrepreneurs with a vast range of necessary services, there still seems to be a need for the industry and government to work together and additional funding in the VC space.
These were the shared sentiments as funders, entrepreneurs, government and other role players gathered last week for the Western Cape Venture Forum event hosted by BUSINESS/PARTNERS and the Western Cape Economic Development Partnership (WCEDP.) The purpose of the event was to connect role-players within the private sector, government and the entrepreneurial community in order to establish a viable, collective, and sustainable solution to bridge the current funding gap.
Dewald Gaigher, BUSINESS/PARTNERS Chief Operating Officer, Western Cape, said that as a company that has operated in the entrepreneurial space for over 30 years, it is very familiar with the issues experienced within the industry. “The availability of funding and lack of collaboration seem to be the main challenge experienced in the region. The industry as a whole should therefore work together in order to create a solution that is suitable to all parties in the industry.”
The discussion panel included Western Cape Government Minister of Economic Opportunities (MEC) Alan Winde; Christina Pinto, Chief Director: Innovation Priorities and Instrument at the Department of Science and Technology; and Venture Capital experts - Brett Commaille of AngelHub Ventures and Keet van Zyl of Knife Capital and Gaigher.
Van Zyl agreed with Gaigher’s sentiment that it is important to note that entrepreneurship does not happen in a vacuum, and all role-players within the industry have a responsibility. Quoting a SiMODiSA report to be launched in July, he presented some of the constraints inhibiting the development of effectively functioning entrepreneurial ecosystems in South Africa which include skills deficits, hindering of regulations and policies, limited availability of venture and SME funding, a disconnect between the private and public sector and a low tolerance of risk and failure. “The report delivers an excellent blueprint on what needs to be done in order to overcome these constraints,” and concluded by saying that they are slowly but surely getting it right.
Venture Capital specialist, Commaille, indicated that there has been many initiatives which have been well-intended with the correct goal in mind, but the wrong strings attached. He believes that there is thus a need for government to involve the private sector at the conception phase of the various public sector initiatives.
Pinto agreed that government instruments require a certain level of harmonisation between the public and private sector, and there should be an agreement on how the various instruments work and fit in.
The Western Cape Minister of Economic Opportunities, Alan Winde, expressed the importance of skills development, and stated that while this is not a regional government mandate, the departments are doing much in the entrepreneurial space when it comes to skills development. He mentioned that a significant amount is being spent across departments in this regard, and that reducing regulatory red-tape was also an area of focus for his department.
“Trust between the private and public sector is another item we need to address, and I think the fact that the WCEDP – the product of a long process of engagement – has brought us all here tonight is testament to exactly what the organisation was tasked to do,” he concluded.
There was broad consensus that although similar conversations have taken place in the past, the timing is now right to explore the possibility of a regional fund, built on a collaborative model between government and private sector to run as a trial, starting with a small contribution from each side.