Grindstone is Knife Capital's year-long entrepreneurial development programme to assist post-revenue scalable innovation-driven businesses in accelerating strategy execution. The programme has been developed as a result of interactions with thousands of South African companies where it is evident that most are not sufficiently prepared and positioned to:
- Cope with accelerated growth
- Pass an investor due diligence
- Raise adequate growth funding
- Take full advantage of M&A opportunities
- Secure international partnerships
A general lack of awareness of the gaps in their business value chain lead some potentially high-growth SMEs to never address the issues that are holding them back in a systematic and measurable manner.
Grindstone supplies 10 companies annually with knowledge, networks and funding readiness through growth measurement, gap analysis and deep interventions designed to build a foundation for growth, transfer skills, create relevant business networks and enable these companies to take advantage of market access opportunities. Business support resources and services will include elements of training, corporate advisory, coaching, mentorship and funding.
Through Grindstone, Knife Capital forms long-term partnerships with scale-up entrepreneurs for a shared upside. The business model is a combination of a capital growth incentive from investing in some participating companies cultivated through the programme (on arm's-length funding terms), and market-related transaction fees if third party investment is secured. Programme partners contribute in services, time and sponsorship.
The twelve Companies from Grindstone-2 are:
Cognadev - Innovative assessment & people development techniques to identify and leverage talent
Comunity - Helping companies connect simply and authentically with people - through a platform that enables rich mobile apps to run everywhere.
Electrum Payments - Customised banking & payment system software
Mobinomics - Creating integrated software-intensive operating systems for telcos, cities and organisations
MPULL - Scalable B2B marketing/ lead generation agency
Nona Creative - Web design, development and online marketing boutique. Internet things done right!
PayFast - Secure, online payment processing for South Africa
SeaMonster - Creating visual stories & interactive experiences via augmented reality, animation & games
SensiCardiac - Accurate cardiac murmur assessment solution
Shopstar - Allows anyone to easily create & manage their own online shop
TaxTim - Digital tax assistant who makes taxes quick and easy
WhereIsMyTransport - Transport platform solution for smart cities in emerging economies
The ten Companies from Grindstone-1 are:
Apurimac Media - Marketing with Intelligence
Eluminary Inc - Specialist automation software
Framework One - Business evolution through automation
iKubu - Computer vision and radar technologies
iono.fm - Personalised internet radio
TR3DENT - Professional Data Visualisation
ViewProtect - Armed transparent security barriers
OfficeBox - Cheapest stationery guaranteed
Okuhle Media - Media, TV production & audience engaging content
One Moja - Simple financial products for African markets
Between June 2013 and June 2014, these ten Grindstone companies:
- Created 43 new direct jobs;
- Added R43 million in revenue across the ten companies;
- Grew by 61% year-on-year in revenue;
- Increased their number of key customers by 120%;
- Doubled their company valuations on average;
- Increased their mastering of business fundamentals index by 20% - from 65% to 78%.
10 Companies will be selected to participate in the year-long Grindstone acceleration programme for 2015/16 but additional spaces can be made available on request.
Selection criteria for the programme are:
- Existing South African SMEs
- Post-revenue with positive customer testimonials and traction
- High growth potential in search of achieving scalability
- Profile and passion of the management team
- Vision for the future
- Market attractiveness
- SA Job creation ability and 'success story' potential
A 2-Day networking and growth workshop will be held every quarter where all the Grindstone companies will participate in strategic review of key business functions. Partnerships with leading independent subject experts will ensure that the programme delivers thought-provoking business insights. Key gaps will then be closed to mitigate risks and facilitate growth in one-on-one sessions with each company. Baseline growth indicators will be developed at the beginning of the programme and progress across these metrics will be constantly measured. Company specific interactions are developed and implemented to achieve measurable growth and put the companies onto a sustainable growth platform for their individual strategic growth paths. Companies will graduate with a Closing Data Room that includes all documentation that was developed throughout the programme. Grindstone will continue to provide access to networks and ad-hoc advisory services to all programme graduates to enhance market access.