Senior auditor Brian Mthembu is passionate about start-ups
Brian believes that South Africa has some great business ideas, but that red tape is holding it back.
Brian Mthembu is currently doing his virtual secondment with a firm based in the United States. He is contracted as a senior audit consultant by SAPRO, which sources talent from all around the world for international clients or companies.
These days, you can work for a firm based overseas from the comfort of your own home. This creates many opportunities if you have the necessary technical expertise and are able to work for a company abroad.
“Even before the pandemic people could have virtual conferences, so this is quite similar to that,” says Brian. “In my case, I work with managers in that firm and we communicate through Microsoft Teams. This has been an eye-opening experience and opened up my mind to a lot of things.”
He adds that there are special purpose acquisition companies (SPACs) in the US that make it very easy to raise capital. Funding is very dear to Brian because he is currently trying to raise capital for his own business, an engineering firm. “I would describe myself as quite an adventurous guy. Yes, I am a CA, but I like to venture into different paths such as the engineering firm I am trying to start.”
He believes that South African SMEs don’t get the necessary support they need and that it is very difficult to get financing in South Africa. “It is much easier to get funding in the US because there is far less red tape,” he says. “The US SPACs market managed to raise billions in 2020, which means even companies that are not operational (just registered) are able to approach the US stock exchange for funding and get it, as long as the mandate is appealing to investors. This is not possible here.”
He highlights that SMEs are the backbone of the economy: they employ many people and if you support those small businesses, you support the country’s growth. He has also noticed that it is much easier to get funding for a company that is already operational than it is to get funding for an SME.
Brian says it is a pity that he is not physically in the US and had he been, he would probably have secured funding for his business by now. But this isn’t his first venture; he is also a keen investor.
“I took an interest in investing during my university days and decided to register an investment company then. The company still exists, and I do own some stock on the JSE with the hopes of capital appreciation or dividends,” he says. Brian is also a registered tax practitioner and offers tax services through his consulting business.
If the engineering firm is a success and is profitable, Brian hopes to become a funder for other start-ups. “My business partner and I strongly believe in not realising too much debt. The idea is to get a loan for the business and pay it off as quickly as possible. Once that happens, we will take our earnings and grow the business together with providing funding to other start-ups,” he says.
South Africa aspires to be a developed nation and a developed nation has a certain way of doing things. The most successful start-ups in South Africa were started by people who went overseas and saw something that was not available back home, he says, which is why exposure is so important: “South Africans are sitting on some of the greatest ideas, but don’t know it yet, because they don’t know better.”