High-profile South African venture capital firm, Knife Capital, has become the latest firm to establish a 12J Venture Capital Company with the launch of KNF Ventures. The firm’s goal is to raise R100 million or $65 million to invest in innovation-driven startups which show significant potential to scale, thereby delivering investors annualized returns of 40% or more. The minimum commitment threshold for investor participation is being set at R1 million.
In the statement announcing the launch, Keet van Zyl, CEO of KNF Ventures and co-founder of Knife Capital noted that by combining the knowledge, contact networks with the fresh funding, KNF Ventures is well-positioned to push the growth of its investee companies. “We are taking our learnings in the local venture investment space over the last ten years, partnering with value-adding investors and utilizing the SARS section 12J VCC regime to create something unique.”
12J Venture Capital Companies take advantage of a South African Government-implemented tax incentive designed to help the country’s SMEs with access to equity finance by encouraging more investment in privately-owned entrepreneurial businesses. Individuals, companies and trusts investing through approved section 12J venture capital companies can deduct the full amount of their investment from taxable income.