Knife Capital sets up R100 million VC company for small businesses

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Knife Capital has announced a new venture capital company that will facilitate investments worth a total of R100 million in local innovation-driven small businesses.

KNF Ventures, a SARS-approved section 12J  company, accelerate the growth of scalable businesses to generate enhanced returns for investors.

“We are taking our learnings in the local venture investment space over the last 10 years, partnering with value-adding investors and utilising the SARS section 12J VCC regime to create something unique,” Knife Capital co-founder  Keet van Zyl said in a statement.

KNF Ventures will select businesses with expertise in their respective industries and contribute Knife Capital’s business building skills along with the diversified experience of credible investors who have come on board as part of the investor network as well as mentoring and networking sessions.

“Exploiting IP is one of the key strategies that businesses can rely upon to improve their competitiveness, but most South African innovation-driven companies we come across have not adequately taken advantage of their knowledge base,” Van Zyl added.

According to Knife Capital, KNF will be based on the style and success of previous funds and investments it has managed where investors achieved superior returns and investees enjoyed accelerated growth.

“KNF will find, make, grow and realise scalable investments while aiming for a minimum of 40% annualised return on investments,” it added. “The targeted investment capital is R100 million but initial closing will be smaller to start taking advantage of impending investment opportunities.”

The minimum participation amount per investor is R1 million.

An added bonus for investors is that section J27 provides a tax incentive which allows individuals, companies and trusts investing through approved section 12J venture capital companies like KNF to deduct the full amount of their investment from taxable income.

[Image – CC 2.0 by Rocío Lara]

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