Section 12J investment

[Tomtomtom]

Anyone made a Section 12J investment yet? Where, when, why? And how's it going?

 

[Thor]

I have not.

Still have to save up a bit more before I can become a venture capitalist.

 

[Tomtomtom]

The minimums are pretty crazy but it's not clear to me we're missing much as retail investors.

Check out Anuva. http://anuvainvestments.co.za/

http://anuvainvestments.co.za/wp-co...uva-Investments-Pty-Financials-Ltd-2016-6.pdf

I don't have a financial background. So I'm confused as to where the return is coming from. A R5 million dividend, targeted at 8%, but cash-flow for 2016 suggests the underlying business earned R20 million repairing TVs and fridges, and spent R22 million paying staff and suppliers. R2.4 million current assets, R12 million in liabilities.

So the cash dividend must have come from cash investments made by later entrants -- and was justified by a paper "fair" re-valuation of the underlying business, or whatever.

Smells a little Ponzi to me. Am I doing it wrong?

 

[Thor]

The minimums are pretty crazy but it's not clear to me we're missing much as retail investors.

Check out Anuva. http://anuvainvestments.co.za/

http://anuvainvestments.co.za/wp-co...uva-Investments-Pty-Financials-Ltd-2016-6.pdf

I don't have a financial background. So I'm confused as to where the return is coming from. A R5 million dividend, targeted at 8%, but but cash-flow for 2016 suggests the underlying business earned R20 million repairing TVs and fridges, and spent R22 million paying staff and suppliers. R2.4 million current assets, R12 million in liabilities.

So the cash dividend must have come from cash investments made by later entrants -- and was justified by a paper "fair" re-valuation of the underlying business, or whatever.

That screams Ponzi at me.

Am I doing it wrong?

If I am not mistaken this was a initiative made by SA Gov to stimulate investments in startups so Venture Capital companies needed money thus the Gov created a Tax initiative that if you invest in a Section 12J VCC you can claim the tax back in return you are taking a high risk investment since the investments of the VCC has a higher bust rate potential.

I also think Section 12J is only available until 2021

 

[Dubai]

Where do we find venture capitalist companies to invest?

 

[saturnz]

I don't have a financial background.

LOL, and you want to tell me what to do

 

[Thor]

Where do we find venture capitalist companies to invest?

There's a few in SA who are Section 12J

Grovest.co.za being a trusted one.

 

[stealthywealth.co.za]

I interviewed someone who has done some Section 12J investing - you can check it here http://www.stealthywealth.co.za/2017/01/section-12j-investing.html.

I also tried to put together a Section 12J directory with information on all the Section 12J companies - http://www.invest12j.co.za. Some companies were happy to provide info, but some declined - so it's only a partial directory for now...

Anuva is quite nice in the sense that they let you invest on a monthly basis (only company I know which allows this. May go some way to overcoming the minimum investment hurdle.)

 

[ele33]

So you guys have maxed out your S11(k) deductions?
Or do you guys just have a greater risk appetite?
Shorter investment horizon?

 

[Thor]

I interviewed someone who has done some Section 12J investing - you can check it here http://www.stealthywealth.co.za/2017/01/section-12j-investing.html.

I also tried to put together a Section 12J directory with information on all the Section 12J companies - http://www.invest12j.co.za. Some companies were happy to provide info, but some declined - so it's only a partial directory for now...

Anuva is quite nice in the sense that they let you invest on a monthly basis (only company I know which allows this. May go some way to overcoming the minimum investment hurdle.)

I like the site stealthy - referring to the sec 12

 

[JStrike]

Anyone made a Section 12J investment yet? Where, when, why? And how's it going?

Yep. I invested through GrowVest (Well, the Family Office did)

 

[ele33]

Yep. I invested through GrowVest (Well, the Family Office did)

What has the returns like if you don't mind me asking?

 

[JStrike]

What has the returns like if you don't mind me asking?

I'm not too sure actually. The Family Office manages it.
These things tend to not have yearly returns i.e
Year 1: Fund buys (or sometimes invests in) various companies
Year 2 : Do nothing (Companies undergo turnaround plans etc)
Year 3 : Do nothing (Companies undergo turnaround plans etc)
Year 4 : Do nothing (Companies undergo turnaround plans etc)
Year 5 : Start exiting companies (Sale of companies or IPO)
Year 6 : Finish exiting companies (Sale of companies or IPO)

You hope to make 4x your money over the 6 year period. Of course you have a pretty decent chance of losing all your money too

 

[ele33]

I'm not too sure actually. The Family Office manages it.
These things tend to not have yearly returns i.e
Year 1: Fund buys (or sometimes invests in) various companies
Year 2 : Do nothing (Companies undergo turnaround plans etc)
Year 3 : Do nothing (Companies undergo turnaround plans etc)
Year 4 : Do nothing (Companies undergo turnaround plans etc)
Year 5 : Start exiting companies (Sale of companies or IPO)
Year 6 : Finish exiting companies (Sale of companies or IPO)

You hope to make 4x your money over the 6 year period. Of course you have a pretty decent chance of losing all your money too

Thanks - I have to decide between my RA and one of these before the tax year ends

 

[Tomtomtom]

So you guys have maxed out your S11(k) deductions?
Or do you guys just have a greater risk appetite?
Shorter investment horizon?

Wouldn't necessarily want to max out RA deductions before taking advantage of it. Might not be wise, but if you have some speculative money why not speculate tax-free?

But I'd like to hear some stories and see some track records etc. because right now the space is a bit too "pioneering" looking for me. (I know that's the point of VC, but I'd like the VC company itself to have a track record at least!)

 

[Tomtomtom]

I'm not too sure actually. The Family Office manages it.
These things tend to not have yearly returns

The Anuva one I linked to earlier "targets" dividend payouts. Which strikes me as strange. But I'm expecting companies to come along and stretch the definition of VC... not necessarily a bad thing.

 

[JStrike]

The Anuva one I linked to earlier "targets" dividend payouts. Which strikes me as strange. But I'm expecting companies to come along and stretch the definition of VC... not necessarily a bad thing.

A bit strange. But yeah, it makes sense that companies would start stretching the definition a bit