Ten of the best early stage entrepreneurs will secure launch funding and a chance to secure equity investment in a new competition called Seed Engine Business Accelerator.
The competition comes to fill a critical gap in South Africa. Early stage entrepreneurs are generally ignored as they only tend to attract funding once the business has existing revenues. The Seed Engine Business Accelerator initiative will sift out ten early stage entrepreneurs and give then an opportunity to convert their business ideas into commercial realities.
Marc Elias of Seed Engine said “The search is now on to find the ten best distinctive and disruptive business concepts that deserve a chance at success. We are looking for early stage entrepreneurs who have a big dream to fulfill.”
Once the final selection has been made, ten teams of entrepreneurs will begin a life-changing journey through a 13 week accelerator boot camp where they will each be given R100 000 start-up capital to convert their ideas into practical business plans ready for launch. The accelerator is a business and personal boot camp for entrepreneurs. The concept of accelerators has become a global phenomenon, driven by successful entrepreneurs and investors.
Entrepreneurs will be offered coaching, mentorship, work space and support and an opportunity to grow their concept into a business. On completion of the programme they will be introduced to potential investors via a presentation day so that they can attract additional funding. It is anticipated that the entrepreneurs will raise between R200 000 and R2 million for next round funding.
The Seed Engine accelerator model includes seven main features:
1. A highly competitive application process
2. Seed capital in exchange for equity
3. Focus on small teams, not necessarily one founder
4. Intensive mentoring and coaching and a fixed calendar of events
5. Ten ventures per accelerator programme
6. Introduction to investors for further funding
7. International exposure.
Elias continues, “Angel investors and venture capitalists take a keen interest in these accelerator programmes because they create a pipeline of investable companies, filter top talent and connect them to disruptive and innovative opportunities.
“The primary investment principle at any stage of investment is the assessment of risk. Typically, in the South African context, investors are known to have a low appetite for risk. Seed Engine has therefore developed its accelerator programme to significantly reduce the risk profile of the accelerator participants and improves their chances of success, as well as giving them the opportunity to raise additional capital for their ventures. 85% of entrepreneurs going through accelerator programmes in the USA are still trading after four years. It is also in the interest of Seed Engine to increase the likelihood that the underlying businesses are successful, as we will hold equity positions in all of the accelerator ventures.”
Entrepreneurs can enter by going to www.seedengine.co.za and completing the application process. Applications are open until the end of November 2012. The application should clarify points of difference, scalability, disruptive strategies and team details. The first activation will begin in February 2013.
The Seed Engine Accelerator is powered by proud supporters of entrepreneurship, as well as support for employment creation in South Africa.
Tiber, one of the largest private property owners and construction companies in South Africa, has provided Seed Engine with free rent for the first accelerator as well as assistance with the construction of the work space.
Redwood Capital Partners have provided Seed Engine with capital to develop the innovative work space and will be mentoring the entrepreneurs through the activation process.
Urban Everest, a coaching and leadership facilitation company have joined Seed Engine to develop the accelerator programme and coach the entrepreneurs.