It’s never been a better time to flex those entrepreneurial muscles! The Global Entrepreneurship Monitor report 2021/22 released by the Stellenbosch Business School shows that there has been a dramatic rise in early-stage entrepreneurial activity among young South Africans. The pesky part is finding business funding. We’re here to step in, as always. Read about some of the ways to find business funding for young entrepreneurs in South Africa.
Types of Business Funding for Young Entrepreneurs
South Africa seems to take youth entrepreneurship seriously. A quick desktop search reveals many government organisations, foundations and private incubators keen to walk alongside you on your entrepreneurial journey. Let’s delve into some of their offerings.
Government Grants and Programmes
As far as government programmes go, we list a few to investigate.
The Youth Technology Innovation Fund
This is part of the Technology Innovation Agency and an initiative of the Department of Science and Technology. Essentially this fund wants push innovation and discovery. It is accessible to those aged between 18 and 30 years old. Qualifying entrepreneurs can’t be funded by any other Technology Innovation Fund, however.
National Youth Development Agency’s (NYDA’s) Grant Programme
Youth entrepreneurs between 18 and 35 years old, take heed! The NYDA Grant provides fledgling entrepreneurs to access both financial and non-financial business development. Businesses can be formal or informal (a spaza shop owner qualifies too). Applicants needn’t have any other source of capital. However, they must show that their business is commercially viable.
IDC Young Entrepreneurs Campaign
Meanwhile, the Industrial Development Cooperation has set aside R1- billion to fund youth-owned businesses. The organisation has the following criteria:
- A sound business plan
- Over 50% ownership by those under 35
- Businesses operating or expanding in South Africa
- Businesses that demonstrate that they have economic sustainability and are able to derive profits from their operations
- Broad-Based Black Economic Empowerment certification from an accredited verification agency, where applicable.
The Youth Challenge Fund (YCF)
Another opportunity is this fund run by the Small Enterprise Finance Agency. It was launched to prevent so many youth businesses failing. The number is pretty high. About 5 in 7 in the first year.
The fund encourages the establishment and growth of youth-owned businesses, particularly in the digital realm.
Additional requirements are that the grantee must be involved in the day-to-day operation and management of the business. The applicant must also participate in business development support and a mentorship programme.
Private Sector Funding for Young Entrepreneurs
Angel investors, incubators, seed funding. Cool names, yes. But even cooler assistance for budding entrepreneurs in South Africa. We look at two in particular.
This is an angel investor network in Johannesburg. Jozi Angels invest their personal funds in early-stage innovators. Furthermore, the investors help companies grow by bringing knowledge, networks and capital.
This business incubator strives to build sustainable, high-impact companies that address challenges in agriculture, climate, and health. It helps students with ideas and entrepreneurs in their early stages of business and nurtures them to achieve their full potential.
Navigating the Funding Landscape as a Young Business Owner
All things considered, there are many things involved in your entrepreneurial quest, whether you run a smaller micro-business or a larger start-up business. It helps to brush up on your presentation, proposal writing, budgeting, and marketing skills. Here’s a mini questionnaire. If you can answer in the affirmative to most of the questions, you’re on your way.
- Does your team have the passion, technical & business skills required?
- Is the solution innovative or novel & have a strong value proposition?
- Are you targeting a sizeable market and how will the solution be scaled to service it?
- Does the problem exist and does the solution solve that problem?
- Do you have an indication of product-market fit? In other words, are there paying customers?
Calling youth entrepreneurs in South Africa! We’ve partnered with Merchant Capital to offer your start-up solutions that actually work for you.
That’s why qualified applicants will receive their flexiadvance in less than 24 hours. It’s a real advantage to have business funding partners who understand your unique business needs as intimately as Payflex does.