Time to recognise the lifeblood of SA’s economy

Catherine Townshend, Growth Capital Solutions RMB

Nick Riley, Head of Investment Banking and Principal Investments at Investec

Lynette Ntuli, the Founder and CEO of Innate Investment Solutions

Entrepreneurs and the businesses they create are arguably the underpin to any well-functioning country in today’s dynamic, fluid and ever-evolving world; they are the lifeblood of an economy’s ability to continually reform, reinvent and evolve.

That’s according to Nick Riley, Head of Investment Banking and Principal Investments at Investec, and Lynette Ntuli, the founder and CEO of Innate Investment Solutions, who were talking ahead of the SAVCA Industry Awards – an annual initiative, proudly sponsored by Investec and supported by Sanlam Investments, showcasing the high quality of local companies that received venture capital and private equity investment and their wide-reaching economic impact as a result of this investment.

“South Africa is in the infancy stages of its economic evolution and transformation, and while policy and environmental enablement has long been the focus where inclusive economic growth is involved, it is time to acknowledge that our market place still requires a focus on innovation, product development and responsive service to the needs of our diverse population,” says Ntuli, who is one of the nine senior business leaders that make up the esteemed judging panel for this year’s SAVCA Industry Awards.

“Entrepreneurs in our country not only see these gaps and opportunities first, but their agility and creativity also enables them to close and meet them.”

Echoing Ntuli’s sentiments is fellow judge Riley: “Entrepreneurs and business are two critical elements to growth which are fundamental to driving social and economic opportunity.”

Riley, however, notes that the environment in South Africa is not always conducive for entrepreneurs and small businesses to thrive. “Small business should be the biggest employer in a country, but the reality in South Africa is that there is too much red-tape and bureaucracy for local entrepreneurs to start new businesses, coupled with limited incentives available for new businesses.

“Small business and entrepreneurship will not, in isolation, drive economic growth. There needs to be an efficient state, business friendly environment and certainty around policy. Within this environment, small business and entrepreneurship will thrive, creating jobs and opportunity. These are drivers to create equality, alleviate poverty and contribute to a sustainable environment,” notes Riley.

This is where venture capital can play a vital support role, says Catherine Townshend, Growth Capital Solutions RMB and SAVCA Industry Awards judge. “By providing a company with expansion capital, different to the terms and conditions of traditional financing methods, venture capital enables these fast-growing businesses to accelerate investment in the talent and development capabilities necessary to realise their vision, while benefiting from the networks and partnership that investors offer,” she notes.

Townshend, Riley and Ntuli, along with six other renowned business leaders and captains of industry –Craig Beney; Andre Roux; Andre Rousseau; Anne Keppler; Dr David Makovah; and Ketso Gordhan – are responsible for determining this year’s SAVCA Industry Award winners, which will be announced at a gala dinner to be held on 7 November at the Hilton Sandton in Johannesburg.

“Recognition of great founders and promising companies promotes the asset-class, illustrates the talent and capabilities we have in our market and highlights the importance and need for venture capital in the country to stimulate growth which in turn drives economic transformation,” says Townshend.

“This is particularly pertinent in a market that is warming to the role that private equity and venture capital can play in building successful businesses,” adds Ntuli.

“The SAVCA Industry Awards therefore provides a platform to show the meaningful contribution of private equity and venture capital financiers to businesses, among others, and the growing importance of this asset class within the economy,” Riley concludes.