CEO Circle Launch & Investor Feedback March 2019
CEO Circle Launch & Investor Feedback
March 2019
OBJECTIVE
2
Use our collective resources as big business to stimulate the economy by helping mainly black entrepreneurs and small businesses scale and increase the attractiveness of investing in this sector
Decisions made to date
Fund of Funds vs
direct
Private equity vs
hybrid model Size of SMEs
Demographics of
entrepreneurs
Ecosystem
support
A Fund of Funds,
leveraging existing
expertise in the market
Already 340+
organizations in the
ecosystem. Focus on our
proprietary ecosystem and help scale companies
within our shareholder
and funder base
Hybrid mandate with
three pillars: Growth, VC and Impact
Target smaller SMEs (EV
<R100m) for investment,
and help scale
• 10 companies to >R500m,
• 200 SMEs• 5 world-class black
entrepreneurs*
50% investment in black African businesses, 25%
in Indian and Coloured
and 25% in white businesses
*Invest in 50, assume global average of 1:10 big successes
DIVERSE AND EXPERT BOARD, INVESTMENT COMMITTEE, AND EXECUTIVE TEAM IN PLACE
3
Investment Committee
Board
Exec Team
ADRIAN GORE JABU MABUZA DOLLY MOKGATLE NIGEL PAYNE JUDY DLAMINI LISA KLEIN BRIAN JOFFE
MICHAEL JORDAAN ALBERTINAH KEKANA ANDRE ROUX NAZEEM MARTIN
KETSO GORDHAN LUMKA MLAMBO KARABO NKOANA RYAN HARRISON CARYN WINTER CLAUDIA MANNING THIRU PATHER
R1.4bn fund investment strategy in three areasINVESTMENT MANDATE
Set bold goals to invest inand help scale
• 10 significant black businesses
• 200+ black SMEs
• 5 world class black entrepreneurs*
over the next 5 years
* Invest in 50, assume 1:10 will excel
IDEATION STARTUP EARLY EXPANSION GROWTH
Age of company
Size
and
com
plex
ity
Growth investments
Focus on capital appreciation for companies that don’t have access to traditional sources of capital
Provide financing to early-stage firms with high growth potentialProvide financing and
support toearly-stage entrepreneurs
and firms withhigh growth potential
VC and Incubation
Focus on providing equity and growth capital for
companies thatdon’t have access
to traditionalsources of capital
Growth Investments
Solve social and environmental challenges alongside financial return – including debt, turnaround and township
economy interventions
Impact and Support Investments
4
R725mCommitted
to date
0
20
40
60
80
-15
-10
-5
0
5
10
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
New listings Delistings Total listed
VERY FEW NEW COMPANIES ARE BEING BUILT
More delistings than listings since 2008
Overall JSE
AltX
54 delistings
52 listings
0
100
200
300
400
500
-40
-30
-20
-10
0
10
20
30
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
238 delistings
188 listings
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2004 2006 2008 2010 2012 2014 2016 2018 2020
Mar
ket
cap
CAG
R of
JSE
com
pani
es s
ince
list
ed
Year listed on JSE
Slow growth
26% had negative growth
28% grew at >20% CAGR
New companies are an important
engine of economic
growth
Market cap CAGR for JSE companies since listing, by initial market cap size 5Source: JSE Market Reports and Reuters database
PROPRIETARY ECOSYSTEM – LEVERAGE TO SCALE 10 COMPANIES TO R500 MILLION BUSINESSES
6
Funding
Mentoring
Access to market
S H A R E H O L D E R S
supplier supplier supplier supplier
VC GROWTH IMPACT
Investee Company
Investee Company
Investee Company
Investee Company
Investee Company
Investee Company
Investee Company
Investee Company
Investee Company
Personalised pathway
SELECTION PROCESS
Inaugural 2019 cohort(5-10 companies)
a. Introduce to capital providers
b. Access to markets through introductions to key executives and procurement officers in select companies
c. Match C-suite mentors and provide scale-up support
CEOs reports back on progress in Nov 2019
20% 3 year revenue CAGRAt least 5 years in operation
Strong leadership team with defined roles>R50m annual turnover
1
2
3
45
Submit list of companies
SA SME Fund applies initial filter
Endeavor run process – financial review, interviews, panels with industry experts
Mini Investment Memo and Diagnostic per company
CEO panel selects 2019 cohort
12
3
4
5
Inaugural 2019 cohort
WHAT IS REQUIRED FROM MEMBERS OF THE
8
List of SMEs from your supply chain that meet the selection criteriaDue: 12 April 2019
Committing to mentor the inaugural 2019 cohortDue: Q3 2019
Committing to provide the inaugural 2019 cohort access to chief procurement officer and key executives Due: Q3 2019
CEO Circle Launch & Investor Feedback
March 2019