WDB Seed Fund continues to creatively address funding scarcity
At a time when South Africa faces a number of significant economic challenges from slow growth to high unemployment, creating suitable funding opportunities for entrepreneurs and small businesses has never been more important. “The question of funding is not just about entrepreneurs getting the support they need to grow their businesses but also about ensuring meaningful enterprise and supplier development,” says Donna Rachelson, Group CEO of Seed Engine, incorporating Seed Academy and the WDB Seed Fund.
According to findings from Seed Academy’s recent Real State of Entrepreneurship in South Africa 2017 survey, access to funding remains a substantial barrier to growth for many growth stage businesses. Rachelson says it was this common context that led to the creation of the WDB Seed Fund – an investment fund that develops sustainable businesses to impact the South African economy through focusing on the “missing middle” (growth stage businesses), and the development of black women and youth entrepreneurs in particular.
Created by Seed Engine, WDB Investment Holdings and Grovest, the WDB Seed Fund provides access to funds, markets, high level mentorship and business support to investee companies, whilst simultaneously offering significant tax benefits for corporate and individual investors. As a section 12J fund, the WDB Seed Fund offers an efficient tax structure that allows investors to deduct the full amount of their investment into the fund from their taxable income in the year in which the investment was made. In addition, investment into the fund qualifies as ED and SD spend which then count toward the corporate BBBEE scorecard. “The WDB Seed Fund goes beyond ticking all the right boxes. The Fund goes a step further to enable meaningful transformation by creating impactful entrepreneurs and empowering suppliers to effectively compete in supply chains,” explains Rachelson.
Support for black women and youth entrepreneurs remains fundamental to unlocking South Africa’s entrepreneurial potential. Seed Academy is making strides in this area through the AccelerateHer programme, a joint initiative of WDB and Seed Academy. Through the three-month intensive training and development programme Seed Academy is able to identify high potential entrepreneurs and businesses and equip them to be funding ready, thus creating a pipeline for the WDB Seed Fund. Following the immense success of the inaugural programme, recruitment for the second AccelerateHer is now underway. Selected entrepreneurs are eligible for access to development opportunities through Shell’s Enterprise and Supplier Development programme and stand the chance of being rewarded R50,000 towards their business. Black, female entrepreneurs aged between 18 and 35 with a business idea aligned to Shell’s value chain are invited to submit their entries online at www.seedengine.co.za/accelerateher, before 30 October 2017.
Even more recently Seed Academy partnered with SAB Lerumo and Ndalo Media to assist 23 female black-owned businesses undergo an intensive enterprise and supplier development programme. As with AccelerateHer, the programme is a pipeline for the fund, and one promising business was identified to be put forward to the WDB Seed Fund after undergoing three months of skills development and training which included master classes in B2B selling, labour standards, supply chain management, marketing, funding and pitching.
“While we are seeing some improvements, women entrepreneurs are still underrepresented in relation to the population – a statistic Seed Engine through Seed Academy and the WDB Seed Fund aims to change by providing necessary funding opportunities for promising small and early-stage business to become sustainable and successful enterprises,” concludes Rachelson.