HBD Venture Capital, the company started by Mark Shuttleworth, is growing up.
Formed six years ago in the heady days after his celebrated sale of digital verification company Thawte to Verisign, HBD was a determined champion of the little guy - the entrepreneur with a good idea or prototype invention that others didn't have the time or stomach for.
Not content with only a venture capital business, HBD launched Upstarts, an incubator focused on nurturing hi-tech start-up businesses; Springboard, which supported township entrepreneurs; and Big Idea conferences, which promoted entrepreneurship.
But five years on this has all changed. Under the whip of fast talking CEO Julia Long, the company has reorganised and refocused its efforts. "Back then we wanted to experiment a little, to try these things. But for a small company they proved incredibly time consuming. We needed focus."
So HBD is closing all the business units, except for HBD Venture Capital. But even this has been restructured. Its first fund, capitalised by R75m, was focused on funding companies with little or no track record. The second fund, which is now being marketed, will target companies with a more established track record. "There is a reason the early-stage market is underresourced - it's difficult to make a return there," says Long. "We knew this was the case, but because of our history [as entrepreneurs who made it big] we wanted to try."
But HBD has not turned its back on the early-stage market. "We will see through the investment in our eight companies. It may take up to seven years to realise a return - if at all," says Long.
Along with Stuart Kirkman, HBD CFO, Long is the only person left from the Thawte Consulting days when she headed the development team. It's not just loyalty that keeps her there. She loves the variety that comes with her current position.
Aside from running the company, she sits on HBD's investment committee. She is also a nonexecutive director of a number of HBD investments and she is a trustee on the Shuttleworth Foundation, a nonprofit organisation that supports innovation in education in Africa - "which incidentally has also been restructured".
What she doesn't like about the job is having to say no to hopeful entrepreneurs and being firm with those you have invested in and built relationships with. "Entrepreneurs don't all like to listen," she says with a broad smile.
Does it matter that a venture fund is being run by people with no experience in either venture capital or private equity investments? "Up until now, no. What was valuable was that, as entrepreneurs, we had gone through the same experiences. Where we needed other skills, we drew on consultants."
But now that the companies HBD invests in will have more than a "prototype and list of expenses", more financial skills are required. As the old team has slowly dispersed, Long has used the opportunity to recruit specialist financial skills. She is also brushing up her own knowledge by completing an honours in financial management. "It's more for the formal qualification. I've been applying the theory for years."
In her time with HBD, she has worked through close to 3 000 business plans. "You learn to spot the gems quickly - the experience has been more valuable than any MBA could be."
Though it's stimulating, her job is stressful and the pressure to deliver results is mounting. Instead of taking her frustrations home to her two children, she plays squash two to three times a week. "I'm very competitive and will fight for every point - even if I'm losing."
She'll need the stamina. HBD's new focus will make it harder, not easier, to find entrepreneurs. But because their funding is limited to smallish amounts - from R10m to R25m - other venture companies in search of bigger deals may push business their way. "We are still in a niche in the market, just a different one from before."
