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Knife Capital launches new Accelerator for post-revenue startups

I can’t say this surprises me. South African growth equity fund manager Knife Capital has launched a later-stage business accelerator in Cape Town.

Knife Capital manages Mark Shuttleworth’s HBD Venture Capital’s South African portfolio of investments and was named the South African venture capitalist of the Year in 2012 and 2013 by Acquisition International Magazine.

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The news comes from this year’s Global Forum on Innovation and Technology Entrepreneurship currently taking in place in South Africa.

According to Knife, the point of the programme is to “assist post-revenue high-growth technology enabled SMEs to become sustainable and fundable”.

Acceleration programmes and startup competitions are beginning to take off in the Silicon Cape region. Most of the time companies that benefit from these events and initiatives are pre-revenue companies so it is interesting to see someone like Grindstone Accelerator come into the mix.

“Despite a flourishing startup scene producing companies with innovative technologies and great potential, there remains a significant gap for high-growth SMEs with proven revenue traction to scale and grow organically,” says Grindstone CEO Andrea Bӧhmert.

The programme backed by Knife Capital also has support from the Department of Trade and Industry. The hope is that it will assist 50 companies in the next three years through a range of “interventions designed to build a foundation for growth”.

This will also create relevant business networks and enable these companies to take advantage of market access opportunities. Company executives will also attend the Knife Capital investment course at the start of a programme in partnership with the UCT Graduate School of Business: Find–Make–Grow–Realise.

“We created the Grindstone Accelerator by effectively compressing our venture capital engagement model of aggressively growing a company for 3-5 years into an intense 9-month programme” says Eben van Heerden, Knife Capital CEO.

The Grindstone advisory board comprises of experienced venture capitalists, entrepreneurs and industry experts such as Julia Fourie, Rapelang Rabana and Guy Lundy.

The accelerator is hoping to help businesses solve the problems that come with trying scale up such as accelerated growth, fund-raising, taking advantage of M&A opportunities, securing international partnerships, sharpening their business model and executing on their plan.

It seems Knife would also like to position Grindstone as a potential investor using its deal flow pipeline, which allows the accelerator to do a thorough due diligence on the participating companies while they are on the programme.

“We’re long-term partners in helping these companies grow,” van Heerden said.

Knife Capital has developed a proprietary scale-up gap assessment tool where each company gets measured and assessed against industry benchmarks for various metrics. This tool will be adopted by Grindstone as the acceleration roadmap for each SME. A detailed action plan is then derived and through exposure to top subject matter experts, Grindstone will actively work with the companies to close execution gaps. The aggregated analytics provide Grindstone with unique insights into growth inhibitors of high-growth companies and enable them to measure the growth that is engineered.

How do you get signed up? It starts with a survey apparently — so fill that out.

The application and selection process will only kick off in Aug 2013 with an “interactive Funding Readiness Workshop” aimed at providing tangible information to 50 SMEs about the various financing options. Out of these 50, 20 will be chosen for the UCT GSB early-stage investment course (run by Knife) and gap analysis bootcamp, where 10 companies will be selected as participants for the first year of the programme.

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