As much as small businesses in SA constantly face challenges in raising capital to grow their businesses, something needs to be said about the people that actually run these businesses.
While most business owners would like millions of rand to scale up their brilliant ideas, how many of those entrepreneurs can actually be trusted as good custodians of funds?
In recent history, questionable governance practices at shared workspace company WeWork by founder Adam Neumann resulted in the firm losing three-quarters of its value, going from $45bn to below $10bn in a short time.
In the SA context, Reuel Khoza, former Nedbank chair and chair of private equity firm Hlayisani Growth Fund, says there are many holes that need to be plugged in the governance structures of small businesses.
Understandably, entrepreneurs are often saddled with so many tasks and responsibilities that dealing with these issues becomes an afterthought, Khoza says. Having good governance in place would actually help many business to handle day-to-day operations and growth much easier.
Whatever your position, being a custodian of funding is an important job. Funds such as HGF or the Public Investment Corporation are made up of public funds. These are usually not high net worth individuals but rather ordinary people looking for ways to grow wealth in a struggling economy.
So the next time a team of dynamic and somewhat idealistic start-up founders decide to pitch their business for funding, it would be good to spare a thought for the responsibility that actually comes with it.
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