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Early-stage venture capital in South Africa: Challenges and prospects

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  • Jones, Morgan
  • Mlambo, Chipo

Abstract

The aim of this paper is to assess which factors impact the development of early-stage venture capital in South Africa. Factors identified for other markets and countries are explored and their relative importance in South Africa determined from the perspective of market participants. These include venture capital and private equity fund managers, government institutions, intermediaries and university research coordinators. The study used both an online survey, to capture a broad representation of opinion, and interviews, for in-depth responses. There was broad consensus among respondents with regards to the key factors requiring attention, which include the lack of funds targeted at early-stage investments, the lack of specialised fund managers, and the low entrepreneurial skillsets in the country. Through a detailed analysis of the responses, certain measures are proposed that can enhance the development of early-stage venture capital in South Africa such as engaging more with angel investors and improving the cooperation between the different market players in the sector.

Suggested Citation

  • Jones, Morgan & Mlambo, Chipo, 2009. "Early-stage venture capital in South Africa: Challenges and prospects," MPRA Paper 42890, University Library of Munich, Germany, revised 21 Nov 2012.
    • Handle: RePEc:pra:mprapa:42890
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    References listed on IDEAS

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    Cited by:

    1. Plantinga, Paul & Adams, Rachel Margaret, 2019. "Open government and innovation for inclusive development: Competing values in policy development, co-creation, brokering and procurement," SocArXiv 4y6n9, Center for Open Science.
    2. Kamran Ahmed Siddiqui & Mohammad Emad Al-Shaikh & Ishtiaq Ahmed Bajwa & Omar Alenzi, 2021. "Venture capital challenges in Saudi Arabia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 291-302, March.

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    More about this item

    Keywords

    early-stage; venture capital; entrepreneurship; investment; South Africa;
    All these keywords.

    JEL classification:

    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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