Johannesburg - Running a startup in South Africa is not a “glamorous” business, according to a survey released by Ventureburn.
The Ventureburn Startup Survey, which partnered with First National Bank (FNB), investment advisory firm Clifftop Colony and analytics company Qurio, surveyed just under 200 local tech startups to develop better picture of who these businesses are.
Ventureburn said each of the startups was asked 42 questions, ranging from funding to their revenues.
The survey also defined a tech startup as a company with annual revenues of below R20m and staff numbers of between 1 and 100. Ventureburn also said the survey sample size also assumes a population of 5 000 tech startups in South Africa, with a 95% confidence level and a 7% margin of error.
And according to some chief results of the study, startup employees and founders “are often paid below-market salaries, get close to zero benefits and are subject to high-pressure environments”. Other key findings include that the local startup industry has experienced “a surge in black entrepreneurs, more than that recorded by any other startup survey to date”.
“Moreover, just 17% of startups are profitable, with only 3% of startups making it to the sought-after venture capital investment stages,” said a statement regarding the study.
Key motivations for startups, though, include that entrepreneurs are driven by the need to "innovate", "be a pioneer", or for reasons of "personal development".
View some of the survey’s findings in the infographic below: