Entrepreneurship and small, medium and micro enterprises (SMMEs) are often referred to as the lifeline of the South African economy.
Many businesses, however, fail in the first five years in their respective industries, with the common fault being a lack of funding and not having basic business acumen for the entrepreneurs to get their companies off the ground.
Mitchan Adams, the founder and CEO of Aions Creative Technology, says heritage can be as much about the future as it is about the past. He aims to make an impact by leaving a legacy of collective accountability.
As a venture builder (VB) that invests in South African start-ups, of which 70 to 80% fail within the first five years, Adams says he hopes VBs, with their approach that combines funding with mentorship, can turn the trend around and create a heritage of successful entrepreneurship rather than adding to the legacy of failures.
Adams, a serial entrepreneur, says a lack of funding and basic business acumen is the main reason start-ups fail, especially in disadvantaged communities that need the jobs and economic injection the most.
He says VBs are a bridge between venture capitalists, which provide funding but no business skills and incubators, which provide skills and possibly basic equipment but no funding.
A GEMS study of the overall entrepreneurial framework conditions in 50 countries, which includes sufficiency of financing, government-run support programmes, education, and commercial and legal infrastructure, shows that SA lags behind the average framework in every category.
Adams says that for mass impact, the government needs to be more involved and accountable.
“South African start-ups need funding and tax rebates to free up working capital. However the B-BBEE business transformation scheme isn’t being incentivised, and businesses aren’t being punished adequately enough for non-compliance,” Adams says.
In the start-ups that Aions has invested in, Adams says he fosters a culture of collective responsibility.
“I try to teach entrepreneurs and their employees to think about the long-term gains. When everyone buys into a company’s values and what the’’re trying to achieve collectively, the vision extends far beyond simply the next pay-day.“
“In a few years’ time, we’ll be able to measure the impact that VB models are making, in terms of both economic growth and social impact. Hopefully, part of that will be a new generation of entrepreneurs who will build successful businesses with employees who apply a collective mindset,” says Adams.
“If I could leave a legacy, I’d like it to be of an ethic that inspires everyone to work together to ensure not only their own and each others’ livelihoods but also the future of the company and, in the long run, economic growth on a national scale.”
BUSINESS REPORT