SME Rise is the Johannesburg Stock Exchange (JSE) Group’s SME development solution. This initiative brings together private companies and growth solutions. Its main aim is to invest in the SME sector and help these businesses to create jobs and contribute meaningfully to the economy.
The JSE collaborates with several organisations working to introduce better policies for SMEs, including the National Agenda Steering Committee, the Start-up Act South Africa, Business Unity South Africa (BUSA) and the Department of Small Business Development.
SME Rise offers:
- The JSE Enterprise Accelerator
- SME Rise Funding Readiness Training
- SME Rise Capital Matching Roadshow
- JSE Private Placements
- AltX
- Think tanks
- Virtual speed coaching
This article will only highlight a few of the important solutions that SMEs should pay attention to.
The JSE Enterprise Accelerator
JSE Enterprise Accelerator was developed to fast-track the growth of South Africa’s private companies.
The programme offers participants an interactive environment based on one-on-one mentoring, webinars and master classes for businesses that show high-impact and high-growth. Entrepreneurs have the opportunity to focus on up to three key performance indicators that help businesses learn more about scaling, operations and capital and funding requirements. Because it strives to prepare SMEs for capital raising, each participating business will have tailored goals for its intended outcomes.
Interested businesses have to meet a specific set of requirements before applying.
The JSE SME Rise Capital Matching Initiative
The capital matching programme aims to connect SMEs with investors based on corresponding criteria. Through this, SMEs gain access to funding that can help a business grow and scale, while investors can invest their capital in high-potential projects.
Entrepreneurs can access invoice and purchase order financing, debt solutions, angel and venture capital, grant funding and Enterprise Supply Development (ESD) solutions. The only requirement is that these businesses be formally registered with a minimum of 12 months of operating history. The South African business needs to have a clear business model and growth strategy that demonstrates financial viability.
The programme consists of two stages, namely a funding readiness programme and a capital matching event.
In the funding readiness stage, businesses need to complete the six modules that consist of both online pre-recorded and live sessions. Additional guidance is provided online, but the goal is to support the business to become pitch-ready and access funding.
During the capital matching event, businesses that are funding-ready are matched with a minimum of four funders who take a look at their pitch decks. From that point on, the businesses meet directly with the funders and discuss the way forward.
Capital matching sponsors include Business Partners, African Bank, AltVest, Creative Growth Capital, Edge Growth, Endeavor, Black Business Council, Wesgro, SourceFin and ESquare.
JSE Private Placement
JSE Private Placement, or JPP as it is often referred to, offers a single fintech platform that is a catalyst for connecting private companies seeking finance with qualified and suitable investors.
The digital matching platform is ideal for those seeking equity or debt from investors. It is a simple, fast and cost-effective way of raising private capital.
Entrepreneurs can apply for funding by submitting their information in the online application form, along with a copy of their business plan, pitch deck or info memorandum.
AltX or Alternative Exchange
For SMEs that don’t quite fit within the Private Placement offering, there is the alternative exchange. Commonly referred to as AltX, it is a parallel market focused on providing good quality, small and medium-sized high-growth companies with a growth path and access to capital.
Similar to listing on the JSE, listing on the AltX has several advantages. These include:
- Access to a large investor pool
- The opportunity to position the company for greater growth.
- Improved opportunities for profiling
- Enhanced relationships with stakeholders, including banks, suppliers and even customers.
- Attract and retain better talent through share options.
There are many requirements to listing on the AltX, and although the benefits are unmistakable, not every business should be on the exchange. The decision to list your company’s shares on a stock exchange is significant. You have to think about how it will shape your company’s future. It also increases your obligations to external parties, including investors.
Therefore, make an honest and realistic assessment of your company after fully considering all the alternative routes by which your business might achieve its goals.
