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Financing Instruments for
Technology Incubators
Presented by: Jeff Miller [email protected]
Chairman – Seed Engine Group @jeffmiller180
CEO - Grovest
Chairman of Seed Engine Group which is an entrepreneur training and incubation company.
CEO of Grovest.
Has been actively involved in the early stage venture capital eco system for the last number of years.
Jeff Miller
Access to
Markets Access to
Funding
Lack of
Mentorship
Capital
Challenges that incubators face
SEC 12J – South African Income Tax Act
Promulgated in January 2009 and ends in June 2021.
All amounts invested in a Sec 12J company qualify for a 100% deduction from taxable income in the year in which the investment was made.
Investments into a Sec 12J company are not subject to recoupment if held for 5 Years.
No one Investor can own more than 20% of the Sec 12J company.
No one Investment can represent more than 20% of the issued share capital of the Sec 12J company.
Currently 32 registered VCC’s.
Current Funds Under
Management
Venture Capital Company
Energy
Services provided by Sec 12J management company
Valuation of
Investment Portfolio
Capital Raising
Assisting with
strategy & budgeting
of investee
companies
Due Diligence of
potential
investments
Compliance and
Administration of
Section 12J
company
Corporate
Finance• Structuring
• Valuations
• Negotiations
S.E.E.D Fund will be a public unlisted section 12J Impact Investment Fund with its sole focus being investments in businesses:
• that can make a difference and who can generate social, environmental and economic value.
• that can become a sustainable business and positively impact the South African economy through job creation.
• preferential emphasis for black women and youth owned businesses that have the ability to create sustainable businesses with opportunities or job creation.
S.E.E.D aims to provide capital, technical business support to its investee companies, whilst promoting inclusive growth.
“Impact Investments are investments made into companies, organisations and funds with the intention to generate social, environmental and economic impact, alongside a financial return.”
- Global Impact Investing Network (GIIN)
S.E.E.D Fund Mandate
Seed Engine Entrepreneur Development
Fund
Impact investment Fund to Raise R100 million to be launched in June 2016
Targeted investors are corporates, foundations and philanthropists who:- Identify with impact investments- Support the entrepreneurial eco system in South Africa
Two types of Equity :- Ordinary Shares - Empowerment Shares
-Minimum investment is R5 million
Targeted returns of 30% IRR p.a.
WHY INVEST IN THE SEC 12J S.E.E.D
FUND
Structured Investment vehicle registered with the FSB , SARS with strong corporate governance and mandatory reporting. Board of directors, Investment Committee, Audit committee
Solution to the “MISSING MIDDLE “ – Funding of early stage businesses, that are in Incubator or coming out of incubation.
Incubators are the main source of deal flow.
Strong professional, experienced , hands on , management team that works with the investee companies – ALL THE TIME
Corporate venturing with the ability to invest in further investment rounds of portfolio companies.
Subscription for Empowerment Shares qualifies for ED and SD points
Corporates making an Investment in a portfolio of Investments
Investors receive a tax benefit of between 28% - 41%
MANAGE REAL ROI
