Venture Capital is a Collaborative Sport
Moving beyond Co-opetition. . .
We are what is generally described as emerging, diverse VC fund, our maiden fund, the Technology, Impact & Innovation Fund (TIIF), is at first close. Our greatest drive over the last year, has been to secure great deal-flow, with strong potential for exit-flow.
Exit-flow is the potential to off-set one’s position in any particular investment to a willing and receptive third party, usually also an investment house, in the form of a trade-deal.
No single venture fund can or will have access to all the quality deal-flow available in any ecosystem, innovation, as we have seen over the years, will largely happen at the periphery, from unlikely sources and outside of the traditional networks forged over time. New and disruptive opportunities seldom come from the same sources and networks as they have in the past.
Within the South African ecosystem, most of all Private Equity Capital favours a particular few from a very narrow base of investors. Anyone who knows and has followed the venture space within the South African ecosystem, will know that we have a handful of old-world (largely 10- to 15-year-old VC/PE) ventures.
Managers in these firms are largely lacking in melanin, usually male, with one or two firms with some female participation. They all either graduated from WITS, Stellenbosch University, University of Cape Town, or University of Pretoria. This allows for a very narrow social network, and even small deal-flow network.
As part of a cohort of emerging, younger, and new age VCs, IsimoVest Venture Capital Partners, is dedicated to casting the net wide, finding opportunity in collaboration with ventures that would traditionally be understood as competition.
Our aim in this ecosystem is to contribute, meaningfully to its growth and development — ensuring that entrepreneurs from all walks of life gain access to financial capital, social capital, and experienced skilled resources to grow their businesses. The need to work with others is therefore imperative, to allow for this, and further enable emerging fund managers access to the best deal-flow available.
We have found that collaboration, allows us to participate in far greater opportunities that we would have been able to. It also improves the quality of a deal, as we use the different skills, insights, and know-how of the collaborating entities to raise the quality of the deal.
Ultimately, we are de-risking the deal and venture for each other as collaborators.
This is even more important when looking at opportunities across the African continent, where diversity is a double edge sword.
For collaboration to be a realise — honesty, trust and openness need to be the fundamental drivers. There cannot be hidden agendas.
All information needs to be shared equally, and fundamentally respect each other as separate entities, partners, and collaborators.
True collaboration looks to create value, not just for the collaborators, but for the entrepreneurs in the venture, and the economy as a whole.
As it has been shown before, that diverse teams, will outperform mono-culture venture teams, collaborating venture capital firms will outperform that ones focused on competing with participants in the ecosystem.
