The Industrial Development Corporation specialises in funding businesses. It is a self-funding state-owned national development financial institution providing finance to entrepreneurs in competitive industries.
The corporation's main aim is to contribute to the creation of balanced, sustainable economic growth in Africa and the economic empowerment of South Africans.
Different business units fund different kinds of businesses and industries.
But you need a powerful business idea to apply for IDC finance because it focuses on bigger projects requiring finance of at least R1million.
How does its venture capital investment work?
Venture capital finance provided as direct equity, quasi-equity and shareholder loan funds up to R30million a project.
The IDC usually takes a minority stake in the business, but will exit in the medium term.
The size and nature of the IDC's equity holding will be determined by the amount of money required to finance the business. Value, risk and returns will also play a role.
The IDC will consider economic merit and the viability of the business when you apply for finance. Your business must show it can sustain itself.
The IDC will aim to earn a return equivalent to the risk. Though it does not seek control of your business, it will play a significant role with strategic input and by sitting in on board meetings.
It gives entrepreneurs handsome incentives to share in the growth of the business. It expects entrepreneurs to be fully committed to the business and to contribute a significant amount of the investment.
The product must be aimed at a clearly defined market and show a clear advantage over competitors. The product or service should aim at high market growth. And the business must show potential for profitability within a reasonable time, and create jobs.
As a development agency, it is prepared to take a bigger risk than banks and other financing institutions. Another advantage is that it monitors the business and provides help to make sure it does not fail.
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