67 Things we like about businesses we invest in

67 Things we like about businesses we invest in

The essence of Mandela Day is about taking action, inspiring change, and making every day a Mandela Day. Our company’s name, Hlayisani Capital, is from a Tsonga word meaning to nurture and to grow. It is especially important in South Africa at the moment for all citizens to come together and nurture and grow those things that build our society and make them stronger. We need to rebuild businesses. We need to create jobs to give the unemployed youth of South Africa a chance at a brighter future, where they can make a meaningful contribution through adequate employment.

The South African government describes Mandela Day as a global movement for positive change that begins with small actions. As each person acts, they fuel momentum toward positive change, raising awareness and expanding the reach of Mr Mandela’s values – fighting injustice, helping people in need and practicing reconciliation. We wholeheartedly support this.

In the same way as small actions lead to big powerful positive change, we are unapologetically passionate about small and medium enterprises’ (SMEs) ability to contribute to positive change. By investing in SMEs, we believe we are making a positive contribution to society. We work to grow these SMEs and eventually see them operate as successful larger businesses, allowing us to reach even more SMEs than before, creating a positive cycle of growth and prosperity.

Our team has put together a list of principles we look for when investing into SMEs. While this list is not exhaustive, we do not expect businesses to fulfil every single one. Any of these principles which have been put into practice are positive signs for a business that are likely to get us interested and even excited. If you are a potential SME looking for investment, you can use these as tips to consider while you are building your business, and as you plan to raise funding. These principles apply generally to business, and you should consider them whether you are raising capital from Hlayisani Capital or elsewhere. We hope that our efforts in this regard will be useful to South African society.

The thematic summary of the 67 items (full list at the end of article) are as follows:

1. Don’t build a solution and then look for a problem. Build something that serves society.
   Technology has made it possible to build internationally relevant businesses from anywhere. South African entrepreneurs have the right DNA to go global.
2. You need to be able to communicate your business model clearly in a manner easily digestible for investors who are not necessarily subject matter experts. Understand your business at the micro level, and from a helicopter view perspective to facilitate this.
3. Adam Smith said it: “Growth is more important than scale”. But make sure your unit economics stack up or eventually will stack up, in order to appeal to investors.
4. Beyond the team’s technical ability, leaders specifically need to be able to anticipate what is beyond the obvious down the road.
5. Mike Tyson’s “everyone has a strategy, til you get hit in the face” applies. There is no shame in failure, only in not trying. Build a team of people willing to try, fail, learn and endure.
6. There is strength in diversity.
7. Watch the wallet.
8. There is always a competitor looking to eat your lunch. Know where they are relative to you, what they eat, when they eat, what makes them sick, what condiments they like/dislike (you need to read between the lines on this one). In other words, keep your friends close and your enemies closer. But never lose sight of your customer and their needs as none of your competitors will ever pay your bills.
9. Protect your investors’ interests by implementing proper systems of governance and ensure your interests are aligned.

As we build the globally relevant and prosperous South Africa we wish to see, we hope that our contribution makes a positive difference. If you think that your business fits our investment mandate, we would like to hear from you. Please contact us, or complete our application form on https://hlayisani.com/apply/.

Best,
The Hlayisani Team

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