Platform connects investors and Venture Capital companies

A recently launched online platform - The 12J Marketplace - has made it much easier for South African investors to access information on the most active Section 12J Venture Capital Companies (VCC) in the country. It will also provide users with the ability to process their investments online in the very near future.

First of its kind,12J Marketplace could become a valuable learning resource for financial advisors, wealth managers, high-net-worth individuals, broker consultants and asset managers.

As part of their education and awareness campaign 12J Marketplace will provide broker consultants with experience in specific VCCs, to offer support services and engage with advisors, individuals and fund managers on related matters.

Whether and at what rate a success fee per annum of funds raised will be levied is still under consideration. 

The broker consultants will be assigned to their respective VCC at the inaugural 12J Marketplace Conference on 2 August 2018 at ZAR X in Bryanston and will continue in this role until 1 March 2019. 

And as the offering makes it easier for vested parties to connect, advisors will find the process of investing in VCCs on behalf of their clients a much more efficient affair.

Furthermore, in recognising the value such meeting points can bring to its members, The Financial Planning Institute of South Africa (FPI) have come out in great support of the initiative. Not only will FPI members gain entry to the conference at a reduced rate, they will also have preferential booking privileges.

“The conference will be an excellent opportunity for investors and advisors to interact with VCC in the lead up to the February 2019 tax year-end,” says Jonty Sacks Section 12J Specialist and partner at the financial advisory firm, Jaltech. 

While most of the interest in investing in VCCs has come from high net worth individuals and their financial advisors, Sacks believes that there is an untapped market in institutional funds.

The 12J Marketplace conference will include presentations by14 VCCs as well as breakaway sessions for those looking to actively take advantage of the tax benefits of Section 12J investing. 

The conference has been limited to 300 persons for advisors to have the opportunity to engage more directly with the VCCs, and to better understand the benefits it brings. 

Section 12J offers an incentive to local taxpayers investing in these VCC vehicles. The amount of the tax incentive is equal to the marginal tax rate of the investor and the amount invested.For example, an investor at a 45% marginal tax rate who invests R1 million will receive a tax benefit of approximately R450 000. For the investor, that means that he/she can invest R1 million with the exposure of only R550 000. 

Independent financial advisors know that it is crucial for them to stay at the top of their game and keep abreast of the latest industry developments. 

To ensure that financial advisors maintain their Fit and Proper status the Financial Sector Conduct Authority has placed stronger emphasis on the Continuous Professional Development points that advisors are required to maintain each year. 

As part of this emphasis of CPD compliance, the FPI is hosting a webinar to instill a greater understanding of Section 12J. 

Industry players feel strongly about the positive contribution S12J VCC projects will have on the development of South Africa, as the private sector utilises it to build infrastructure, which leads to job creation and skills development. 

In a similar vein proceeds from the conference will go to the Youth Employment Service campaign, a social compact launched by President Cyril Ramaphosa with the aim of creating 1 million jobs for the young people of South Africa.