A strategic framework to utilise venture capital funding to develop manufacturing SMEs in South Africa

Snyman, Hendrik Andries ; Kennon, Denzil ; Schutte, Cornelius S. L. ; Von Leipzig, Konrad (2014-08)

CITATION: Snyman, H. A., Kennon, D., Schutte, C. S. L. & Von Leipzig, K. 2014. A strategic framework to utilise venture capital funding to develop manufacturing SMEs in South Africa. South African Journal of Industrial Engineering, 25(2):161-181, doi:10.7166/25-2-816.

The original publication is available at http://sajie.journals.ac.za


SMEs contribute considerably to the national GDP and to private sector employment, but they struggle to gain access to the funding needed to support business sustainability and growth. Venture capital provides the necessary funding, but SMEs lack understanding of the business value curve utilised by financiers to gauge the risk-reward characteristics of an investment. Strategies need to convey how the business model will evolve in order to deliver on the strategic intent. A framework is proposed through which SMEs can develop a strategy aligned with investor requirements. As a case study, the framework is applied to the local tooling sector.

SMEs dra betekenisvol by tot die nasionale BBP en werkskepping in die private sektor, maar SMEs sukkel om toegang te kry tot befondsing wat nodig is vir groei en volhoubaarheid. Waagkapitaal kan die nodige befondsing verskaf, maar SMEs benodig kennis van die besigheidswaarde kurwe, wat deur beleggers gebruik word om die risiko-opbrengs van ’n belegging te assesseer. Strategieë moet oordra hoe die besigheidsmodel die strategiese intensie gaan aflewer. ’n Raamwerk word voorgestel waardeur die SME ’n strategie kan ontwikkel wat belyn is met die vereistes van beleggers. As gevallestudie word die raamwerk toegepas op die plaaslike gereedskap sektor.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/97616
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