Directory Of Section 12J Companies - Knife Capital
|COMPANY NAME||Knife Capital|
|NUMBER OF SARS APPROVED SECTION 12J FUNDS||
- KNF Ventures
|ABOUT||By leveraging Knowledge, Networks & Funding, KNF Ventures accelerates the growth of South African innovation-driven SMEs and generates enhanced returns for investors. Targeted annualised IRR: 40%. KNF has an active investor base that mainly consists of South African entrepreneurs who generated wealth by founding, growing and exiting their own high-growth entrepreneurial ventures. KNF responsibly applies funding to take advantage of windows of opportunity for investee companies to close growth gaps and create sustainable exit-ready businesses. KNF is managed by Knife Capital – a leading Southern African venture capital firm focusing on technology-enabled ventures.
INVESTMENT MANDATE: R1m to R10m investment in post-revenue stage co's that require funding for growth/ expansion.
Q&A With Knife Capital
Let's hear a little more about the company, some history, where you are now, and what you see for the future?
HISTORY: KNF Ventures evolved from a collaboration between the Knife Capital team, Bob Skinstad and SkyBound Capital to create an alternative investment product for high net worth individuals that combines growth equity with capital preservation principles. KNF is managed by Knife Capital (also managing Mark Shuttleworth's HBD VC portfolio) and our curated deal pipeline includes companies from our Grindstone Accelerator.
WHERE ARE WE NOW? KNF had a successful first close in August 2016 with an active entrepreneurial investor base and we are working towards a February 2017 second closing. We signed a few term sheets with exciting scale-up companies and are finalising the due diligence exercises/ negotiations. Portfolio companies will be announced/ disclosed soon.
FUTURE: Our aim is to leverage Knowledge, Networks & Funding to accelerate the growth of South African innovation-driven SMEs and generate enhanced returns for investors. Targeted annualised IRR: 40%. So the future is focused on partnering with entrepreneurs, investing in great SMEs and adding value as an active investor through the growth phase to achieve a successful realisation strategy for all stakeholders.
What type of investor should invest in your funds?
For us it is about more than the tax break. Sure, it is a good incentive as investors start the investment process in a favourable IRR position due to the immediate tax benefit. But we want investors to be part of the journey. Ideally they need to have an entrepreneurial nature and be prepared to assist portfolio companies with their skill-set/ networks where suitable, and also be interested to learn more about the Venture Capital process. We have an amazing investor base so far of private investors and institutions that we are extremely proud of. So there needs to be a mutual fit on investment philosophy and the like. Minimum investment is R1 million.
What sets you apart from other venture capital companies?
Successful exits and track record in the local VC industry. KNF is based on the style and success of previous funds and investments managed by Knife Capital where investors achieved superior returns and investees enjoyed accelerated growth. The core management team has been working together for 10 years now and we've assisted many companies with growth and liquidity interventions. It is easier to invest in private companies in South Africa than it is to unlock value from these investments, but we facilitated lucrative VC exits of local technology companies to the likes of General Electric, Visa and Garmin, and assisted entrepreneurs with portfolio MBO's.
What are your fees?
2.5% management fee + 20% carried interest (profit share).
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