New technological ventures: start-up financing trends in South Africa

Abstract

Financing the new technological venture in the developed world is well researched and documented. The focus by international researchers and authorities in this field has been on the funding trends of high-tech enterprises through venture capital (VC) fund organizations, either in the private sector of the economy or through Government backed institutions.Research was conducted by the University of Pretoria on technological entrepreneurship in an emerging economic region. Data was gathered through questionnaires from entrepreneurs in technology based businesses operating in KwaZulu-Natal, which is one of nine provinces of South Africa. The data was analyzed statistically and significant relationships between environmental predictors and dependent variables such as start-up financing by the founder(s) and by external parties were identified. The findings help to understand the funding needs of a typical technological entrepreneur who establishes his or her new medium technology based enterprise in a developing society, as well as environmental effects on this aspect of the venture creation process. The findings could be useful to VC funding firms and organizations in emerging countries in their strategic planning and policy decisions.