People 'n' Issues

SA startups ‘not so cool’

June 26th, 2015
A local startup company may sound like the way to go. But, according to a recent survey, there are numerous factors that could make it more difficult to get off the ground than it sounds.
Successful applauding executives sitting at the table

South Africa’s Startup industry isn’t always as glamorous as it’s sometimes made out to be, according to a new survey by Ventureburn.  Employees and founders of startups are often paid below-market salaries, get close to zero benefits and are subject to high-pressure environments. Moreover, just 17% of startups are profitable, with only three percent of startups making it to the sought-after venture capital investment stages.

But this begs the question: why is creating and working for startups an increasingly popular option? Although entrepreneurs will make it big if their startup succeeds, making money doesn’t appear to be the primary driver for many of them. The survey reveals that entrepreneurs are generally driven by the need to “innovate”, “be a pioneer”, or for reasons of “personal development”. Many also start their own fledgling companies because they have spotted a “gap in the market”.

These are the findings of a new Ventureburn survey, which aims to reveal the “true picture of SA’s startup landscape”. Another key finding of the survey is that the startup industry has seen a surge in black entrepreneurs, more than that recorded by any other startup survey to date.


The Ventureburn Startup Survey partnered with First National Bank (FNB), investment advisory firm Clifftop Colony and analytics company Qurio to poll just under 200 tech startups. Each of the startups was asked 42 questions, ranging from funding, the profile of their founders, to their revenues and the everyday challenges they face.

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