16 \ Feature \ January 2013
www.GatewayToAfrica.com
“Just having ideas is not enough. People have ideas every single day. It’s all about execution.” - Haji Chana, Chairman and CEO of HcCapital “Let’s say for argument’s sake we didn’t deal with the student market and we used an open market, and used parents [as a] potential in that market. They’re not that tech savvy, they don’t specifically have smart phones, and the traction to get people on board would be a lot more difficult.” Studentology’s revenue sits in the transactional procedure that occurs with use of the app. “So our projections now – obviously with assistance from Mamba group – our target is to have 100,000 students using the app [in its first year]. The average spend per month of a student is about 250 Rand [US$30] and we take between 3 and 5 per cent profit per transaction.” “What we’ve projected at the end of year one [with this new investment], our turnover should be around R6m [US$696,500]. So year two our end target is to have 500,000 users, which makes it a very profitable business.” With regards to an investment from the Mamba Mentors, Minnaar explains, “we decided on a 45 per cent equity split on a ratchet model. If we hit certain targets or milestones by the end of the year, the company gets 10 per cent back. So there’s a growth model plugged into that to ensure that after 3 years, whatever they’ve invested in could be returned.” On the high-risk nature of angel investments, Chana confesses to being “very picky”. “Angel investments are on a personal level,” he explains. “What’s important is they have to be a good fit…there has to be a good relationship
between myself and the founder.” “Just having ideas is not enough. People have ideas every single day. It’s all about execution… Having capital is just not enough. You [need to] know how you take that capital and optimise that capital and how you execute it.” As his potential “angel”, Chana praises Minnaar’s attributes. “He’s not depending on anyone, he’s making his own fortunes. You have to have that tenacity and persistence.” Still though, there is much to consider before investing. “It’s not just the money,” Chana continues. “Can I mentor him, can I be a strategic investor? In investment terms it’s called smart money. It’s not just writing a cheque...I personally am an entrepreneur as well. I have my own
company, what we do is build ideas within our own company itself.” So what does Haji Chana consider to be the three things somebody needs to get to the final stage? “First the ideas have to be innovative or disruptive. Disrupt an old traditional media. Second thing is, it has the potential to be a large business. And the third thing is, it’s the founder and the team, and I normally like to invest in companies of two people, because it’s better to have two founders, and not one.”
For more information see: siliconcape.com mambamentors.com studentology.co.za