SABTIA draws the crowds, proving incubation is alive

Thivash Moodley of TMi Consulting during their "elevator pitch" to a panel of venture capitalists at SABTIA. Thivash Moodley of TMi Consulting and Eon de Koker of Techsolutions, who made presentations to the VC panel.

The first International SABTIA (SA Business and Technology Incubation Association) conference held at Misty Hills in September this year attracted over 100 local and international incubator professionals and interested parties. And two of the three start-ups afforded an opportunity of an "elevator pitch" to a panel of venture capitalist hailed from the Hub's maxum Business Incubator - TMi Consulting (Pty) Ltd and Techsolutions (Pty) Ltd.

The pitch from Thivash Moodley of TMi Consulting focused on funding required for the 3rd phase design and development of a vehicle simulator project. The pitch highlighted the business opportunity, the technology, the potential market, the investment required, as well as forecasted sales, ROI and an exit strategy.

While the VC guru's liked the idea and acknowledged that TMi Consulting understood the market requirements and had the technical capability, they declined funding because of:

• a perceived limited local market for the product which would require international sales expansion
• a strong possibility of product imitations from countries such as China, Brasil, or India, and
• a greater interest by VCs in funding product commercialisation than prototype development.

The feedback from the VC panel will assist TMi Consulting in assessing market needs and product affordability during their 3rd phase project planning. "We will not abandon the project based on their feedback, but rather turn to other funding mechanisms like SPII, the NRF's Innovation Fund, or entering into joint ventures with other companies and/or future customers. This has been a good learning experience for us and has given us a better understanding of how venture capitalists consider a business opportunity," according to Moodley.

In addition to maxum tenants participating in the SABTIA programme, maxum's Incubation Operations Manager Martin Manmohan chaired one of the sessions, while Incubation Manager Jill Sawers and the Hub's Marketing and Business Development Manager, Martin Yuill, presented papers on on "Starting an Incubator" and "How to effectively and successfully market an Incubator" respectively.

Of interest also, was Dr Norman Kaderlan's presentation on "Angels and Devils - In search for the ideal investor" in which he identified three types of entrepreneurs. Dr Kaderlan is the Adjunct Professor at the University of Texas in the US and President of the Technology Innovation Group. He referred to entrepreneurs as: lifestyle entrepreneurs (typical "Mom and Pop"-type business with 5-10 people), empire builders (the entrepreneur who buys back his share from the venture capitalists that provided funding) and serial entrepreneurs (those that create and sell businesses). In his experience, investors are more focused on supporting the serial entrepreneurs, as their exit strategies are clear and therefore less of a risk in terms of investment funding.

For more information on SABTIA visit their website at www.sabtia.org.za or if you are interested in the programmes or activities of the maxum Business Incubator at the Hub, click on www.theinnovationhub.com/maxum.cfm to find out more.

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