Shuttleworth’s Here Be Dragons offers online test for entrepreneurs

VENTURE capital company Here Be Dragons (HBD) is so keen to give its cash away that it is setting up a test on its website where companies can check if they qualify for funding.

HBD was founded by internet billionaire Mark Shuttleworth and its second round of funding still has R25m to invest in start-up businesses. To help entrepreneurs decide whether it is worth applying for funding , they can take the venture capital readiness test on www.hbd.com. The quick test is designed to tell potential applicants what they can expect from a partnership with a venture capital company and help them to apply.

“For prospective candidates it is important to know the ins and outs of venture capital before applying for backing, as it not necessarily the right solution at every stage of business or for all entrepreneurs,” said CEO Julia Fourie.

The test takes people through a number of important points to consider carefully before selling a stake in their company in return for cash and business mentoring.

It also sets out the criteria that HBD is looking for, to deter no- hoper companies from applying. Those questions include: “Will your revenue grow by at least 30% each year?” and “Are you prepared to part with a significant ownership stake in your business which may result in the loss of control?”

Those were tough choices that needed to be made before a company applied, Fourie said, but entrepreneurs who could answer yes to the majority of questions may be suitable candidates.

HDB has been trying to find more promising companies to invest in for months, and announced in March it wanted to inject R10m- R25m into businesses with innovative ideas and the potential to expand internationally. Finding a company to back would let it close Fund2 — created with R150m of Shuttleworth’s personal cash.

In return for its investment, HBD takes a stake of at least 25% and gives the company mentoring and marketing guidance.

HBD has backed companies including OrderTalk, which developed an online ordering solution for the food service industry, and has also put cash into Moyo, the African restaurant chain.

stonesl@bdfm.co.za