SA needs to get over its venture capital block
Globally, growth in turnover for companies backed by venture capital is five times higher than for small and midsize companies, while average growth in employment is twice as high, writes Hlumelo Biko
South Africa has a strange relationship with capital. We hate people who have it but don’t share it, and idolise those who flaunt it and promise to share it with us. Those who control capital are highly regarded, yet treated with suspicion. Our future, however, requires us to overcome our ambivalence to capital and place money in the hands of a new class of venture capitalists. This is the surest way to successfully realise a fresh industrial development strategy.
Though their role in an economy is often simultaneously glamorised, demonised and misunderstood, venture-capital firms act as intermediaries between capital providers and start-ups in the investment chain. It’s a get-richer-slowly scheme for already-wealthy people, but also the most efficient way to use old money to create new money. ..
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