Kingson Capital's new fund for Entrepreneurs, SME's and Corporates
Kingson Capital is a Section 12J Venture Capital Company that says that they are committed to providing venture capital for companies.
Studies have shown that simply investing capital, without any supplementary business support, is not a compelling driver for SME’s to reach their next growth phase, allowing them to become fully sustainable businesses, the company said on Tuesday.
Both investors and corporates understand the importance of Enterprise and Supplier Development from the B-BBEE codes, but often lack an optimal structure that can facilitate meaningful economic transformation, driving not only sustainable, but also stable growth.
The organisation’s newly launched High-Growth Tech and Black-Owned SME Fund has the ability to facilitate a blended investment return structure for corporate investors, allowing them to not only score B-BBEE points under both the Enterprise Development and Supplier scorecards, but also expose the corporate investor to a whole new class of assets through its Tech Fund.
“When it comes to sound, future-focused investments, it is critically important that we establish exactly where our investment funds are being used, “says Gavin Reardon, Kingson’s founder.
“Investing in meaningful economic transformation within black-owned businesses, when paired with business support, has the potential to take the SME far beyond the survivalist stage and into a profitable growth phase, with far-reaching economic ripple effects for all involved.”
The Fund also apparently allows investors to benefit from a third party Guarantee Facility for any debt instruments issued.
Perhaps the most compelling aspect of the Fund is that investors are able to reap the benefits of the Section 12J allowances available through the Income Tax Act, because as a Section 12J VCC, all investments with Kingson are fully tax deductible in the tax year that they are made.
This means that any future returns for investors can be enhanced, whilst the capital at risk can be lowered.
The structure of the Fund is a holistic, co-ordinated and innovative approach, bringing together key elements of success. The Fund will create symmetry between the Enterprise Development and Supplier Development components of the B-BBEE codes.
Funds allocated under Enterprise Development will be deployed in terms of Kingson’s existing mandate, viz. high growth, tech-enabled businesses.
Funds allocated under Supplier Development will be deployed in terms of the agreed mandate for each individual corporate, which, in broader terms, means that they will be invested with suppliers who are more than 51% black-owned who possess the potential to add significant value to the corporate’s supply chain.
As a consequence of Kingson’s expertise, the ability to scale such business support allows for rapid deployment of funds.
By pairing SME’s whose product offering has the potential to change the current landscape and existing business models with investors and corporates intent on cultivating measurable socio-economic growth, key players from both sides will see progressively larger revenue returns across the board on their bottom lines.