Angel investors come to rescue of start-ups

Two technology entrepreneurs detail their experiences of raising funding for their projects:

Tendai Joe, founder of Whenpages, an events website based in Pretoria, opted to do without any external funding.

"I started Whenpages with zero capital. I had an idea, an old laptop, my BlackBerry and my social networking profiles [which] I would use to network and look for developers and designers to join me.

"However, there were things that needed money, like hosting and domain name reservation. After some frustrations, I decided to invest in attracting the best talent."

Joe did this in February and has spent about R25000 on his project, excluding time, internet access, networking travel costs and equipment.

He said he raised the funds by offering his friends a stake in the start-up.

"One friend agreed to invest a substantial amount.It took him 10 minutes to see the potential in the concept and buy into it. He invested about R20000."

Whenpages will allow users to create, share, and discover events. Joe said it was unique in that it included a live blogging feature, making it easy to create an event and then stream it via text and photos as it happens.

"When a user is preparing a trip - say to Cape Town from Europe - they must be able to easily discover events in Cape Town, as well as event hot spots in Cape Town, with just a click of a button," said Joe.

He said Whenpages will make money by creating partnerships with companies . He is also looking at developing apps for Apple's iOS, Google's Android and other platforms.

Joe said he was seeking referrals before launching Whenpages later this month, after which he will start approaching venture capital firms for funding.

Three years ago, Sheraan Amod established Personera in Cape Town with the backing of angel investors - affluent individuals with cash to spend.

Personera connects the online and the offline world via Facebook, allowing users to easily create personalised print media and branded merchandise in the internet browser.

"I approached the internet entrepreneur and angel investor Vinny Lingham without an introduction, and convinced him to hear my business plan," said Amod.

"He decided to invest in the company with two partners.

"Angel investors have a greater appetite for risk and investing at the early stage, so it's generally easier to raise capital from those individuals than from more conservative venture capital funds."

Amod said that on meeting investors he made sure he was ready with a business plan and had spent lots of time researching the industry.

"If you are trying to convince investors to put their money behind a business, they would expect you to be an expert in that space."

Lingham and his partners invested $125000 in the start-up. This was followed by a $1.4-million cash injection last year from Hasso Plattner Ventures Africa, a R350-million venture capital fund. Personera also convinced 4Di Capital, an early-stage technology venture capital firm, to invest.

Today, Personera is "near-profitable but not yet there, as we made a recent decision to grow our team and invest further in our technology platform", said Amod.