South African Journal of Industrial Engineering
On-line version ISSN 1012-277X
SNYMAN, H.A.; KENNON, D.; SCHUTTE, C.S.L. and VON LEIPZIG, K.. A strategic frameworrk to utilise venture capital funding to develop manufacturing SMEs in South Africa. S. Afr. J. Ind. Eng. [online]. 2014, vol.25, n.2, pp. 161-181. ISSN 1012-277X.
SMEs contribute considerably to the national GDP and to private sector employment, but they struggle to gain access to the funding needed to support business sustainability and growth. Venture capital provides the necessary funding, but SMEs lack understanding of the business value curve utilised by financiers to gauge the risk-reward characteristics of an investment. Strategies need to convey how the business model will evolve in order to deliver on the strategic intent. A framework is proposed through which SMEs can develop a strategy aligned with investor requirements. As a case study, the framework is applied to the local tooling sector.