‘Under Promise and Over Deliver’ – Andile Khumalo’s Advice for Accessing Funding

Updated on 31 July 2018

Subscription - Articles

Andile Khumalo

It’s important to understand what funders want when you want to approach them, advises Andile Khumalo, former chief investment officer at MSG Afrika Investment Holdings.

Khumalo who is also the co-founder of radio station POWER FM 98.7 and former radio host of POWER Business, is one of the speakers at the FundEX event to be held on Thursday 16 August 2018 at the Riversands Incubation Hub in Johannesburg.

Access to funding

A report released by Finfind this year, revealed that one of the biggest challenges faced by SMEs is finding funders and choosing the right funding product.

The report also revealed that the market is large and dispersed, making it difficult for funders to find the right business to fund.

The funder data set included 148 funders who provided 328 different finance products. A filtered amount of 11 033 completed funding requests was analysed from the total 2017 Finfind data set.

In the report it, for example, says 44% of the total SMME funding requests are for amounts of less than R250,000.

“Whilst many funders claim to offer funding for requests under R1m, most SMMEs battle to raise funding in this range. Funding for between R250 000 to R1m represents the highest percentage of the loan sizes requested by SMMEs, as well as the highest offered by funders,” reads the report.

It gives you credibility if you are realistic about how you will do things. Under promise and over deliver

Advice on seeking funding

Khumalo is also the founder of initiatives like I Am An Entrepreneur, a platform where emerging entrepreneurs can get mentorship and learn from those who’ve done it before.

Five years ago before the birth of the radio station, Khumalo and his colleagues approached the Industrial Development Corporation and the National Empowerment Fund to start Power FM 98.7. Several months later they secured the funding.

According to Khumalo, different types of funders want different things. “A commercial bank would be concerned with security, for example. A government bank would be concerned with the social economic impact your business is going to make.”

He advises that your application for funding should stand out. “You have to ask yourself ‘is your proposition sound and strong? Is it compelling?’”

Khumalo adds: “Understand what a funder wants and what’s important to them.”

He also said that funders want their money back.

“You must be able to tell them how they are going to get their money back. Be realistic about it; don’t lie.

“It gives you credibility if you are realistic about how you will do things. Under promise and over deliver.”

We measure the success of FundEX against the number of entrepreneurs who secure funding after the event

Connecting SMMEs with funders

Last year’s FundEX event had more than 600 entrepreneurs attending to learn about how to seek funding for business expansion. The event also presents an opportunity for entrepreneurs to get introduced to different funders.

“We measure the success of FundEX against the number of entrepreneurs who secure funding after the event,” says Jenny Retief, CEO of the Riversands Incubation Hub. “Contrary to popular belief, there is funding available and what it takes to access this capital.”

While Riversands does not provide funding, the organisation plays a role in bridging the gap between entrepreneurs and many players in the funding space. Entrepreneurs will get a chance to interact with a variety of funders including bankers, government funders and alternative funding platforms in the funders’ lounge during FundEX.

Beyond the one-day event, FundEX will give an opportunity for ten entrepreneurs to work with a finance coach with insights from funding experts.

“We will walk this funding journey with these selected entrepreneurs. Those interested can apply at the FundEX when attending, for the ‘fast-track’ process,” says Retief.

More on FundEX

The theme of FundEX 2018 is “Secrets of scale”. Other speakers include Andrew Maren, Managing Director of Profit Share Partners, Abu Cassim, Director of Jozi Angels, Regina Gouden, Gauteng North Provincial Manager for Retail Relationship Banking at Nedbank, Trevor Conradie, Regional Investment Director: Southern Africa at GroFin, Vije Vijendranath, Co-Founder and CEO of Tapsnapp, and Marang Marekimane, Founder of Business Process Mechanics.

The one-day event runs from 09:00 to 16:00. Tickets are available online and are priced at R350 per person. Riversands Incubation Hub is located off William Nicol Drive near Dainfern.

Get Weekly 5-Minutes Business Advice

Subscribe to receive actionable business tips and resources.

Subscription - Articles

Feeling Stuck?

icon