Venture Capital and Entrepreneurship: The Cost and Resolution of Investment Readiness

Danai Zana
MBA Student, WITS Business School, University of the Witwatersrand, Johannesburg, South Africa.

Brian Barnard
Researcher, WITS Business School, University of the Witwatersrand, Johannesburg, South Africa; and is the corresponding author. E-mail: barnard.b@polka.co.za

The study examines Investment Readiness (IR) within Venture Capital (VC) markets and the cost and resolution thereof. IR impacts VC markets, and the efficiency thereof, in a number of ways. The factors and issues that are raised and considered as part of IR include entrepreneurs' experience and business acumen, the quality of opportunities, the perspective of VC firms, the perspective of entrepreneurs, the quality of IR content and services, IR assistance, moderation and accreditation and awareness. In general, IR solutions need to consider cost, quality, coverage or pervasiveness, awareness and assistance. The matter of IR assistance to improve IR requires an in-depth cost-benefit analysis. IR assistance raises the issue of the seriousness of entrepreneurs. The method and technique available to improve IR at no negative impact, typically implies running additional pipelines on the side. There is definitely room and place for technology, also IR metrics as technology, to assist with IR. IR metrics can be further integrated with technology and professional assistance to offer a comprehensive IR tool and solution. This may also be the beginning of turning IR into a competitive advantage. IR metrics should be considered and regarded against their accompanying and corresponding accuracy and success rates, also when considering subsequent and successive IR assessment. IR metrics or IR metric systems can further be secured through moderation. The industry can consider working towards an industry-accepted IR standard. Cost estimates to improve IR equally reveals whether the system is not overextended, requiring rather a focus on quality.

Introduction
Investment Readiness (IR) comprises a significant burden to Venture Capital (VC) markets and forms a principal factor of VC market efficiency. VC bankers frequently refer to IR when explaining the high proposal rejection ratios typical of VC (Mason, 2009; and Mason and Kwok, 2010). VC bankers also spend-and given the approval/rejection ratios, consequently waste-a lot of time on screening opportunities presented to them (Dietz, 2003). The level of IR in a VC market should equally be proportional to the level of entrepreneurship quality in the market.

IR typically spans three dimensions: financial literacy or equity aversion, investability, and presentational failings (Mason and Kwok, 2010). Opportunities are predominantly rejected because of shortcomings of the entrepreneur or because of shortcomings of the business (Mason and Kwok, 2010; and Hazenberg et al., 2015). Shortcomings with regard to the attributes of entrepreneurs include lack of knowledge and expertise to turn the idea into a viable business, unrealistic expectations (e.g., overly optimistic and unsubstantiated), and personal qualities (lack of integrity, vision or commitment; and high need for control of the business) (Feeney et al., 1999; Mason and Kwok, 2010; and Silver et al., 2010). Shortcomings of the business include poor management team (e.g., balance, experience, discipline, and teamwork), poor profit potential for the level of risk, under-capitalized, and insufficient information provided (Mason and Harrison, 2004; and Vasilescu, 2009). The remedies correspondingly are information provision and support, and include business development and expert input (Mason and Harrison, 2004; Mason and Kwok, 2010; and McAdam and Marlow, 2011).

The purpose of the study is to further investigate IR within VC markets and its resolution. A principal question relates to the most optimal method to address, deal with, and resolve IR. Is IR resolution optimal? It involves understanding the actual cost of IR, also to the industry, the allocation of IR as task and the optimization of IR as process. Understanding the actual cost of IR, and how it affects the industry, considering the ways in which IR can be addressed and to whom it can and should be assigned and evaluating methods to improve, optimize and standardize its processes and handling, should help to better understand how to deal with it and thus improve IR in the market.

The study addresses the following research question: What are the premises of optimal IR resolution? In this regard, it covers the following sub-questions:
What is the cost of IR to the VC market?
How should IR as task be allocated and resolved? Of the market participants and stakeholders, who is in the best position to deal with IR?
How can IR be optimized and standardized?
The study contributes to both VC and entrepreneurship literature. It reflects on the quality of VC and entrepreneurship resident in the market. The study mainly focuses on the perceptions of experienced venture capitalists and angel investors regarding investment resolution and its resolution. The study assumes experienced venture capitalists and angel investors are in the best position to reflect on IR and its resolution. Although relevant and important, the views of other stakeholders of IR are not considered as crucial for the study.

Literature Review
Interventions into the VC market have historically focused on supply-side weaknesses. Government intervention programs have focused more on improving business access to finance, through stimulating business angel investment activity and creating new investment vehicles (Mason and Kwok, 2010), thereby implying that the inefficiencies in the market arise due to the unavailability of sufficient sources of capital for growing businesses. However, recent indicators have shown that demand-side weaknesses also adversely affect access to finance. Investors and business angel investors in particular, often find that they cannot invest in as many businesses as they are prepared to invest in, due to the low quality of potential investees that they are presented with (Mason and Harrison, 2002; and Mason and Kwok, 2010). Many of the opportunities that are presented to investors are not investment ready, resulting in investors deeming the opportunities unworthy of funding.

Definition of Investment Readiness
There is no set definition for IR, but the term is generally used in the context of raising external equity finance (Mason and Kwok, 2010) and is typically used with reference to an inability by potential investees to meet the minimum requirements for investment, as sought by investors. Silver et al. (2010) define IR as a set of processes carried out in efforts to make businesses viable prospects for investors. A potential investee is considered to be investment ready, when investors perceive that the company has the appropriate attributes that make it an investible proposition for the type of funding being sought (Gregory et al., 2012). IR is not only an assessment of how investors perceive the business to be but is also based on the entrepreneur's understanding of the finance market and its mechanisms (Hazenberg et al., 2015). Entrepreneurs are often unwilling to seek equity finance for fear of losing control of their business, a mindset often referred to as 'equity aversion'. Entrepreneurs would rather impede their business growth than lose control to external actors (Silver et al., 2010).

IR is neither one-dimensional nor resolved through the improvement of only one attribute of a business but may involve the improvement of various elements of a business. IR covers all aspects of a business, as they relate to the business's perceived investability and include such factors as management team skills, the clarity with which the opportunity is defined, the business model, route to market, governance arrangements and presentation (Mason and Harrison, 2004). Mason and Kwok (2010) state that IR comprises of three parts, namely, equity aversion, investability and presentational failings. Failure by entrepreneurs and their businesses to meet any of these parts, or a combination of them, may be taken as evidence that the business is not yet investment ready.

Equity aversion is consistent with the 'Pecking order' theory, which states that entrepreneurs often prefer debt as a form of financing, relative to equity (Mason and Kwok, 2010; and Silver et al., 2010), as they are unwilling to cede ownership and control of their businesses in exchange for financing. Equity aversion also arises from a lack of understanding by entrepreneurs of the various sources of finance that are available to growing businesses, and their respective advantages and disadvantages (Van Auken, 2001; and Mason and Harrison, 2004). Mason and Kwok (2010) argue that more entrepreneurs would choose equity finance, if they had greater knowledge of the role of different types of financing in business development, thereby providing investors with a larger pool of potentially investable opportunities to assess for investment viability.

The concept of investability relates to those companies that do choose to seek equity finance and must thus meet the specific investment criteria of the investors from whom they seek financing. The high rejection rates of investors definitively show that most businesses do not meet these requirements (Mason and Kwok, 2010). This rejection partially arises from information asymmetry, as businesses are usually assessed on whether they fit individual investor's unique investment criteria, based on such features as sector, business stage, investment size and location (Mason and Kwok, 2010). However, many business angel investors choose to remain anonymous and entrepreneurs are thus unable to determine whether an investor is appropriate for their business pitch or not, prior to their presentation. Potentially investable companies may thus be rejected on this basis, but it will not necessarily be as a result of the business not being investment ready. Subsequent to screening businesses for fit with their criteria, investors further assess potential investees on various elements of the business, such as marketing, finance, and the skills and structure of its management team, as well as on the characteristics and personal qualities of the entrepreneurs themselves, such as their knowledge and expertise regarding the viability of the business, any unrealistic expectations, and their integrity or commitment (Feeney et al., 1999; Vasilescu, 2009; and Mason and Kwok, 2010). Shortcomings at this stage of the business assessment process may be considered as indications that the business is not investment ready.

Presentational failings concern the presentation of the overall written business plan as well as the oral presentation by the entrepreneur. Deficiencies in the information provided in business proposals and in any other written documents aimed at investors as well as poor verbal presentations by business owners are unlikely to be met with favorable reactions from investors (Mason and Harrison, 2003; and Mason and Kwok, 2010). Mason and Kwok (2010) further stated that investors are frustrated by business plans that lack the generic information expected to be found in any investment proposal. As regards the verbal presentation, Mason and Harrison (2003) stated that entrepreneurs need to focus on making the business case rather than focusing on the product or technology, as well as ensuring that they impart all the information that investors want to know. Impression management is also important, as failure by an entrepreneur to sell their opportunity convincingly, leaves investors with the perception that the entrepreneur is incompetent (Mason and Harrison, 2003), thereby compromising what may otherwise be a viable business idea.

In summary, IR encompasses both a business's attributes and the entrepreneur's knowledge, characteristics and qualities, including presentational skills. IR is a combination of factors, all of which must be addressed to resolve the demand-side inefficiencies present in the VC market. Any interventions aimed at improving IR should thus be designed to cover all these elements.

Developing Investment Readiness
IR enables investors to avoid wasting resources on unviable business ventures (Silver et al., 2010). Therefore, demand-side initiatives aimed at increasing the availability of investable opportunities should be designed around what investors find to be the typical shortcomings of the opportunities they are presented with. IR programs should be designed to raise the quality of potential investees and address the issues of equity aversion, investability and presentational shortcomings (Mason and Kwok, 2010). Mason and Kwok (2010) further proposed that IR programs should comprise of two parts: information provision and support, which are further broken down into five more specific elements. It has been ascertained that entrepreneurs are not well-versed on the different forms of financing, on investors' requirements and criteria when assessing investment opportunities, nor on how to present their business proposals convincingly. Any program aimed at resolving IR should thus involve knowledge-sharing, and the promulgation of information regarding financing options (Vasilescu, 2009), satisfying investor requirements, and conducting presentations that are both informative and captivating. Subsequent to receiving the aforementioned information, entrepreneurs then need to be provided with assistance in meeting these standards.

Mason and Kwok (2010) proposed that IR programs should comprise five elements, namely, an information session to fill the knowledge gap on equity as a form of financing, an investment-ready review, an investment-ready development program, an investment-ready presentation review and investment networking. Such a program would serve to impart knowledge to entrepreneurs, support business venture development to a level that renders them strong contenders for equity financing, and then ultimately connect investment-ready opportunities with appropriate investors.

The VC market is characterized by information asymmetry, as investors lack information regarding the venture's potential for success, and the entrepreneur's commitment, while the entrepreneur risks losing control of their business, and cannot be certain as to the security of the investment (McAdam and Marlow, 2011). McAdam and Marlow (2011) further stated that the technical and entrepreneurial skills of business owners often are not matched by the managerial and presentation skills required to convince investors that their businesses are viable and investment ready, and that this information gap can be overcome by the creation of a business plan through which investors can perceive the IR of a business. In their study on what investors look for in a business plan, Mason and Stark (2004) found that the information presented in the business plan plays a pivotal role in whether entrepreneurs will be successful in their pursuit for financing, regardless of the form of financing. It thus follows that IR programs should include support regarding the generation of articulate business plans which contain credible information.

A proportion of businesses that are rejected on the basis of not being investment ready, have the potential to become viable investment opportunities, if they receive appropriate support. However, this support comes with associated costs that entrepreneurs may not be able to afford, and that investors may be unwilling to cover. Investors are thus more likely to reject investment proposals that are not deemed to be investment-ready at first glance, and focus on those that require less investigation and support. Mason and Harrison (2004) further stated that business plans that either fail to provide the requisite information, or are poorly presented, will only serve to increase investors' skepticism in an already imperfectlyinformed market. This serves to further solidify the notion that IR programs must include business plan support.

Mason and Kwok (2010) concluded by recommending that IR programs should ideally be delivered by consultants and experienced practitioners who are familiar with the requirements and expectations of investors. IR is a long-term process and IR programs will not only be expensive but will also require commitment from both the program practitioners and the program beneficiaries (Mason and Kwok, 2010).

Investment Readiness Mediums
The VC industry plays a significant role in innovation, the creation of new industries, products and services, the subsequent creation of new jobs, and ultimately facilitates economic growth and development (Mason and Harrison, 2004; and Proimos and Murray, 2006). It follows then that IR programs should be a concern not only in the private sector but also at a governmental level. Government intervention to improve efficiency in the VC market is typically focused on the supply of finance to business ventures (Mason and Kwok, 2010), rather than on assisting firms to ensure that they are investable. Demand-side deficiencies compromise supply-side interventions' potential for success. Therefore, demandside initiatives aimed at improving the quality of deal flow should accompany supply-side interventions (Mason and Kwok, 2010). Following the recognition of demand-side inefficiencies in the VC market, various programs and initiatives have been introduced in an attempt to render the market more efficient. These initiatives include government programs, business incubators, and Business Angel Networks (BANs).

Government Programs
The general consensus amongst policy makers is that VC is a matter for the private sector, therefore the key objective of public policy is to facilitate and encourage the development of private sector activity in the VC market (McGlue, 2002). Government intervention into the VC industry has predominantly been supply-side, such as tax incentives for investors, changes to legislation to remove constraints on the advertisement of investment opportunities, and coinvestment schemes with private sector investors (Mason, 2009). However, a number of governments have recognized the importance of IR as a tool for rectifying some of the failures in the VC market, and have embarked on the implementation of IR programs aimed at addressing demand-side inefficiencies. Mason and Harrison (2004) listed the United Kingdom (UK), Australia and New Zealand as some of the jurisdictions where governments have implemented investment-ready programs. Mason and Harrison (2004) further provided a review of LINC Scotland's 'trial marriage' scheme which operated under the Scottish Office and which the authors believe was able to provide efficient business development support at low cost.

The LINC Scotland trial marriage scheme was created in response to the identification by investors of business opportunities that had investment potential but required significant support to enable them to be at a level where they could attract equity funding (Mason and Harrison, 2004). The need for support arose from the companies either being unable to afford the cost of fixing a problem and investors being unwilling to cover the cost, or from companies requiring an overhaul of certain elements such as their financial systems or management teams. The scheme provided each company with a small grant to cover the cost of rectifying the problem hindering its potential as an investable business venture. If an investor subsequently invested in the business, the company paid back the grant to LINC Scotland. The trial marriage scheme supported six companies, which resulted in five investments, and the development of one licensing agreement (Mason and Harrison, 2004). One criticism of government intervention in the VC industry has been that public sector funding is too small, and suffers from constraints due to having a ceiling on how much can be invested in any business (Mason, 2009). As the grants provided in this initiative were provided to resolve specific problems, there was no need for follow-on funding, therefore the criticism of government intervention did not apply, and a case could thus be made for the appropriateness of government intervention. The case of LINC Scotland's trial marriage scheme thus provides some evidence that government intervention in the demand-side of the VC market has the potential to yield success in narrowing the investment-ready gap.

Business Angel Networks
BANs act as a bridge between entrepreneurs in need of financing and angel investors in need of investment opportunities, while maintaining the investors' desire for anonymity (Mason, 2009). Business angels are more 'hands-on' than other investors, typically conducting their own due diligence of potential investment opportunities, negotiating investment terms directly with the entrepreneur, and devoting some of their own time to the daily business operations. BANs therefore serve to connect entrepreneurs with knowledgeable participants in the VC market, who are able to assist them to achieve investment-ready status. BANs also enable entrepreneurs to benefit from advice, and directing to more appropriate sources of assistance and feedback, from investors who did not invest (Mason, 2009). A significant benefit of BANs is thus their ability to facilitate the education of entrepreneurs. Mason (2009) noted that an additional benefit of BANs is that they operate on a local or regional scale. This serves to lower the barrier to financing that is often created by location, as the majority of investors prefer to invest locally. Through connecting entrepreneurs with investors who are able to impart advice and potential funding, BANs indirectly assist entrepreneurs with a channel through which they can discover resources and tools, to aid them in improving their IR.

Business Incubators
The information asymmetry that characterizes the VC market means that investors need a significant amount of convincing to persuade them to invest in businesses without track records and whose future profitability is uncertain. Tenancy in a business incubator can be seen as a signal of a business's potential for long-term existence (McAdam and Marlow, 2011). Business incubators advance entrepreneurs and early stage start-up companies, through providing financial and managerial support, and through providing entrepreneurs with access to a network of professional client advisors (CAs) and potential investors (Carayannis and von Zedtwitz, 2005; and McAdam and Marlow, 2011). Carayannis and von Zedtwitz also noted that business incubators differentiate themselves from business angels through the institutionalization of their services.

In their study of the role of business incubators in assisting entrepreneurs to make sense of IR status, McAdam and Marlow (2011) found that the placement of entrepreneurs within a business incubator reduced the information asymmetry between entrepreneurs and appropriate investors, as CAs, due to their networks and more intimate knowledge of specific investors' requirements, were able to match entrepreneurs with investors that had some knowledge of the product area, and/or a history of similar or related investments. The study also found that CAs assisted entrepreneurs with drafting investor-appropriate business plans, and acted as impression managers, coaching entrepreneurs on how to deliver convincing verbal presentations for specific investors. Business incubators thus enable entrepreneurs to improve the quality of some of their business-specific attributes, as they relate to IR.

Investment Readiness Appraisal
Research has shown that the IR gap has hindered the ability of the VC market to function as designed and various interventions are needed to correct the demand-side failures plaguing the industry. Improved IR status places a company in a position where investors are more confident about its potential for success and deem it to be a viable investment opportunity. However, studies have shown that individual investors' perceptions of what constitutes IR are different and are reflective of intuitive assessments (Fellnhofer, 2015). Fellnhofer (2015) further stated that entrepreneurs and investors also tend to differ in their awareness of IR. This lack of consensus raises questions around how IR can be evaluated formally, thereby satisfying all parties involved in potential investment transactions.

In their study on Accreditation in the Context and Framework of Evaluation Activities within the European Higher Education, Schwarz and Westerheijden (2004) found that accreditation as an evaluation tool carries most credibility in society due to its attributes of independent, non-political, academic and expert opinion. Accreditation is defined as a process, based on professional judgment, for evaluating whether an institution or program meets specified standards of quality (Prados et al., 2005). Prados et al. (2005) further stated that accreditation signals that the accredited institution or program meets a minimum level of competence in its chosen field, thereby serving to protect the consumers of the institution or program's products or services. Institutions providing IR programs and initiatives can thus serve as accreditation agencies of sort, with graduation from the programs and initiatives serving as a trustworthy indicator of the quality of the investment opportunities.

Charities strongly depend on the public's trust, as donors cannot be completely sure of how their donations will be used (Bekkers, 2003). Bekkers (2003) further stated that a system of accreditation can be an instrument for signaling a charity's trustworthiness to the public. Although the VC industry cannot be described as charitable, the information asymmetry inherent in the industry means that a high level of credibility and trust often underlies investors' decisions to finance companies (Fellnhofer, 2015). A system of IR accreditation could thus ease some of the wariness that investors may have regarding new ventures and their lack of credible track record.

An accreditation system requires a means of measuring and evaluating both qualitative and quantitative elements, expert knowledge, independent evaluation, and comprehensive assessment (Balci, 1998)-all attributes which can be found in well-designed IR programs. An accreditation system also incurs costs, and a means of covering such costs needs to be determined. There are various ways of covering accreditation costs, such as the government covering all costs, or institutions covering marginal costs and the government covering fixed costs (Schwarz and Westerheijden, 2004). Therefore, a system of IR accreditation needs to be carefully designed to ensure that both investors and entrepreneurs can derive maximum benefit from the system and at a reasonable cost.

IR has specific areas of focus that can be targeted and improved. Common areas of IR revolve around shortcomings on the part of the entrepreneur, or the business. To a large extent, IR is also systematic in nature. If certain aspects of an opportunity are secured, the opportunity has high likelihood of being seen as investment ready. IR relates to the experience or development of the entrepreneur-more experienced entrepreneurs are likely to be more knowledgeable with regard to the requirements of investors, and are bound to struggle less with ensuring opportunity IR. IR also relates to entrepreneurship and market culture- perceptions of VC and entrepreneurship culture are likely to affect general IR levels. There are a number of IR stakeholders in the entrepreneurship and VC marketplace, including government, angel networks and business incubators. VC constitutes a prominent arbiter of IR because it forms a significant first point of contact to the market for many entrepreneurs. The cost of IR likely has a fundamental indirect component and is bound to affect the entrepreneurship and VC industry and the market as a whole. Methods like accreditation may raise the IR quality bar within the industry. Policy and culture should shape perceptions regarding IR and impact the accepted method of resolve of IR.

The literature review concludes with the following research question: What are the premises of optimal IR resolution? In this regard, it covers the following sub-questions:
What is the cost of IR to the VC market?
How should IR as task be allocated and resolved? Of the market participants and stakeholders, who is in the best position to deal with IR?
How can IR be optimized and standardized?

Data and Methodology
In order to further study IR, semi-structured interviews (see Appendix) were carried out with experienced venture capitalists, angels, and professional consultants, and purposive sampling was used. 10 experienced said professionals were interviewed, all with experience (significantly) in excess of three years. Sampling was not constrained according to industry or particular focus, as the impact thereof on the study was deemed negligible. Participants were identified through professional and business networks. Interviews on average lasted one hour. Interviews were recorded, transcribed, coded, and further analyzed.

Results
What is the Cost of Investment Readiness to the Venture Capital Market?
The Impact of IR on the VC Market
IR is a major problem of the VC market and has a marked impact on the market's effectiveness. A lack of IR is a huge obstacle to investing as it leads to a reduction in the volume of good opportunities available for investment thereby reducing the amount of investment that takes place in the market and rendering the market inefficient. One of the frustrations of venture capitalists is that most of the entrepreneurs that approach them for funding are not investmentready. Entrepreneurs may feel that they are investment-ready, but they often are not. There are a number of reasons why entrepreneurs may not be investment-ready, including not having full knowledge of what they are doing, over or underestimating certain aspects of the funding required, and not understanding who or what is in the VC market, and what each option offers. Lack of IR makes the VC market weary, as investors typically do not know what they are dealing with, and have to spend time trying to figure potential opportunities out. This lack of preparedness creates unease amongst investors which results in the entire investment process stalling.

The South African VC market itself is not well developed or defined. Some VC firms are closer to private equity while the true venture capitalists are really angels with access to formalized funds. The South African VC market is also somewhat isolated, hence there is a lack of competition among entrepreneurs looking for VC money. This forms a negative cycle as there are not enough good entrepreneurs, so there is not enough investment, which adds to the level of difficulty for entrepreneurs to become investment ready.

Improving IR would thus increase the efficiency of the VC market and the entrepreneurial ecosystem as a whole. The more prepared (investment-ready) entrepreneurs are, the less time it will take to exchange information and establish relationships with investors.

VC money is fundamentally managed by people who are under pressure to deliver returns, and who are evaluated based on these returns. Venture capitalists thus look for high-risk, highreturn opportunities. However, when entrepreneurs present half-baked opportunities, investors struggle to adapt to the nature of the risk and the reality of the VC market. Investing in the opportunities thus becomes too much of a leap of faith, thereby restricting the VC market.

Improved IR would speed up the investment process and improve the scope of the VC market's pipeline. Currently, 90% of the VC market's pipeline is not investment-ready, so improving IR would increase this figure. Improved IR would also lead to entrepreneurs having all the right investment requirements in place, which in turn would attract further investment into the VC market, by reducing risk-adversity in the market. The more and better the number of opportunities that are investment-ready, the better for the VC market-the greater the transaction rate will be, the greater the volume of the market will be, and the more efficient the market will be. The higher the transaction rate, the more cash will flow into the VC market, to take advantage of the fact that the market is efficient. Improved IR will thus allow the VC market to grow naturally.

Ideal Conditions: Under ideal IR, there would be more VC firms, and the South African VC market would approximate and operate more like the mature VC markets in Europe or the US. The VC market would move from more of an angel type of market to more of a true VC market, with more high-volume and low touch investments. Investment would be more free and less risk adverse, and more opportunities or investments would succeed.

The VC process is currently a shotgun approach, as entrepreneurs, unclear on VC firms' investment mandates, send their opportunities to every single VC firm they can locate- regardless of the firm's focus. VC firms need to clearly define their focus so that when entrepreneurs do their research, they can understand which firms to approach. VC firms also do not provide clear documentation on IR. IR documentation must be more clearly defined, and must be adapted for every opportunity stage. In addition to the provision of IR documentation, there should be an arbitrator, regulator, broker or go-between, to help entrepreneurs prepare and find the most suitable VC firm(s). An ideal VC market would be able to mentor and assist entrepreneurs on the holistic aspects of IR and opportunities, giving entrepreneurs advice and drawing their attention to the points that they may be missing.

An ideal VC market consists of VC teams made up of people that are experienced in starting and running businesses-people that are able to evaluate opportunities based on experience. Experienced executives in the market should be deeply involved in the VC market. The experience of the investor-together with his background-determines how accommodating he is, and how much he expects with regard to IR. The investor may relate to the entrepreneur and understand where he is coming from, particularly if he (the investor) is, or has been, an entrepreneur himself. The investor will be more accommodating, in not expecting perfect answers.

Existing IR Services
There is a significant number of IR services and programs available in the VC market, and the support structures are growing. (1) There are incubators, accelerators, business schools, and business and support services and programs for Small and Medium-sized Enterprises (SME). (2) There are brokers and consultants that do pre-due-diligence, and that help with IR. (3) An abundance of IR content exists online, as well as online processes to test IR. (4) There are also books available for entrepreneurs to read. (5) There are hybrid VC firms that tend to both investment and IR or advisory services, as well as selection programs that screen and take in candidates looking for VC funding. (6) Some major companies and banks are also involved in providing IR services. (7) More informally, there are consultants and angels who can offer advice-whether solicited or unsolicited, paid or unpaid. Entrepreneurs can also help themselves by identifying mentors who would be able to offer guidance.

Although IR services are provided in the VC market, few of these services approach IR from the mindset of venture capitalists, particularly in certain areas of VC, such as early stage. The focus tends to be on entrepreneurs that are further down the line, than those that are just starting out with their ideas. The quality of IR programs and services is also an issue, with the issue exacerbated by the fact that there is no real standard for IR. Business and start-up experience is needed, to assist entrepreneurs get their opportunities off the ground, and this experience is often lacking.

Pre-IR Opportunities: Venture capitalists generally do not give hard "no's," because they do not want to lose the potential deal or pipeline. The VC firm may be willing to back the entrepreneur and/or his team under certain circumstances and conditions, even if the opportunity is not really investment ready. Venture capitalists normally provide entrepreneurs with advice and point them in the right direction-either other VC firms or angel investors- if they cannot help the entrepreneurs themselves. Depending on the type of investor, the investor themselves and the opportunity, VC firms may be more reluctant and angel investors may be more willing, to take a chance on opportunities that are not investment ready.

Despite all this, a significant number of opportunities that are not investment-ready are discarded because VC firms are not willing to take the high risk. VC firms prefer to look at opportunities that are investment ready. Whether an idea or opportunity gets discarded also depends on the entrepreneur. The entrepreneur's idea may be great, but the entrepreneur themselves may not be able to run with, implement, and make the idea a success. If the investor does not have confidence in the entrepreneur, he will not invest. The ability and willingness of the entrepreneur to work with the investor, can also affect IR and perceptions of IR: Whether the entrepreneur is open to the criticism and suggestions of the investor, whether the entrepreneur can establish a working relationship with the investor, and whether the entrepreneur can align with the investor. VC firms and angel investors may be willing to invest in and work on opportunities that are not investment-ready, if they see potential. Thus, having a good idea may be more important than IR per se, as the investor will look past the pre-IR, and focus more on the opportunity and its potential. In this sense, IR is also much about the quality of opportunities. It is the quality of opportunities that gets them through, regardless of their IR. An investor may go with a high-quality, poor-IR opportunity, and discard a low-quality, moderate-IR opportunity.

IR Timelines
The length of time taken to get an opportunity investment-ready is largely dependent on the opportunity itself and the entrepreneur(s) behind it. It depends on how much is wrong with the opportunity-how many (poor or unsubstantiated) assumptions are embedded in it. It also depends on how advanced and developed the idea or concept is and how far the idea is from a product prototype. Some opportunities cannot be recovered because there is no product or market or the entrepreneur is already insolvent. If there are not too many issues with an opportunity, it can be ready for investment in a few weeks. If it involves management, leadership, business development and growth, understanding of the market, or soft skills development, IR can take much longer.

An IR professional needs to determine what is missing and what is still required regarding the IR of an opportunity as well as what factors the entrepreneur does not know or does not have ready that would contribute to IR. The time that it takes to get an opportunity IR is thus greatly dependent on the entrepreneur, how open he or she is to input, and how willing he or she is to cooperate and incorporate suggestions. Attaining IR thus becomes an iterative process of giving feedback and tasks to the entrepreneur and reviewing the tasks once completed. Consequently, IR can take anywhere between one month to three years to achieve.

Insufficient or Incomplete Information and Details and Assumptions: Insufficient or incomplete information, details and assumptions constitute the bulk of the time to attain IR.

The length of time taken varies from case to case and depends on what is in place and what is missing: a good product and competitive advantage, a good sales strategy, environmental and competitor analyses, a good company structure, a good exit plan, financial models, a marketing plan, etc. The length of time to resolve these issues is further dependent on how long it takes the entrepreneur to respond to the requests and recommendations of the investor.

Entrepreneurs' Expectations and Equity Adversity: The issues mentioned stem from a disconnect between the entrepreneurs' valuations of their businesses and those performed by investors as well as ignorance on the entrepreneurs' part regarding equity and financing. Entrepreneurs' expectations are often ungrounded and unrealistic and their valuations are based on exceptional cases or success stories. Correcting entrepreneurs' expectations and equity adversity depends on the maturity of the entrepreneurs and their knowledge, awareness or exposure-whether they have been exposed to the VC process or have heard about it and thus have some insight and more realistic expectations. These issues can thus be resolved in as little as one meeting, through a plain, straightforward and upfront discussion that spells out the rules and conditions and that constitutes a case of "take it, or leave it".

Poor Presentation: Presentation forms part of first impressions and is equally seen by investors as a filter or check. Poor presentation can be fatal for entrepreneurs and their opportunities and can mean termination, i.e., no further discussions or meetings. Presentation issues mainly stem from a lack of understanding by entrepreneurs of the nature of their business and their Unique Value Proposition (UVP). In order to resolve presentation issues, these underlying issues must thus be addressed. Assuming these underlying issues are in place, presentation issues can take as little as a week to resolve through coaching the entrepreneur on how to present, or simply getting someone else with better presentation skills to lead the presentation. Presentation issues related to a lack of understanding, however, will take a much longer time to resolve.

Poor Setup (Management): Few opportunities have perfect management teams. Management is generally poor and entrepreneurs typically do not have all the structures in place. The entrepreneur as the central point of contact and the person investors' deal with is far more important than the set up of the management team. However, management is still an important requirement for VC firms and where venture capitalists feel there is potential for the management team to grow, they will assist the entrepreneur, by helping to put the right management structures in place. Identifying issues of poor management setup is easy and can be fixed by a conversation. Putting the management team together, however, will take longer, as it will not only be a matter of sourcing appropriately skilled people but also dealing with the entrepreneur's mindset regarding any fear, hesitation, or pride he or she may have. Unique Value Proposition or Lacking Business Plan or Model: The UVP is the foundation of an opportunity and a fundamental component of IR. However, the UVP is also often a weakness for entrepreneurs. VC firms may be unwilling to further work with an entrepreneur and help them reach IR, if the UVP is lacking. Venture capitalists can act as a guide for entrepreneurs but they cannot discover the business opportunity for them. The requirements do differ between consultants and venture capitalists. Venture capitalists will turn away or turn down opportunities without UVPs whereas consultants are more willing to assist and help work on certain aspects (thereof). It is difficult to correct the UVP as it either does or does not exist. Where the UVP exists but is not properly articulated, it is easier to fix. However, because the UVP is such a fundamental component, it can take as much as six months to three years to crystallize an opportunity well.

Availability of IR Content and IR Awareness of Entrepreneurs
IR content and templates are readily available on the Internet. There are specific platforms, like Finfind, that connect entrepreneurs and investors, and VC firms' websites, where they provide guidelines specific to their unique requirements. Social media platforms such as Twitter, also serve as online sources for information. In addition to online resources, entrepreneurs can attend seminars through institutions and universities, complete courses and attend industry conferences and talks.

There is a major gap in terms of entrepreneurs' awareness of IR and the perception among entrepreneurs is that IR is easy. Early stage entrepreneurs in particular are not investmentready and often have not received advice on IR and how to ensure that they are investment ready. Entrepreneurs know and are aware of the basic requirements and components of IR, such as a business plan, the target market, a marketing plan, financial reports, etc. Yet, they still fail to put forth and present a UVP. Based on this, it can be said that IR guidelines are inadequate and are failing.

The Cost of IR
Correcting or improving IR involves a lot of time and people's time is scarcer than money. A lot of time is spent on getting the UVP right and in place and understanding what the core business is about. The venture capitalist, consultant or adviser spends the majority of their time checking all of the entrepreneur's assumptions regarding the market and the UVP. After that the business plan and presentation then become easier to perfect. Based on this, the more articulate and accurate the entrepreneur is in terms of UVP, the less time will be wasted trying to resolve its issues.

The time taken to correct or improve IR is also dependent on the entrepreneur's background and mindset. The more commercially-or business-oriented the entrepreneur is, and the more receptive he or she is to the advice and recommendations made to him (her), the shorter the time taken to correct or improve his (her) IR, and the lower the cost.

How the Cost of IR Is Currently Recovered: The cost of IR is shared between the entrepreneur and the investor. The required investment typically involves time and money. The entrepreneur carries most of the cost of IR as readiness is seen as a pre-investment issue. However, investors incur IR costs through performing due diligence, as well as through the opportunity cost associated with the other opportunities that they may forgo while focusing on assisting an entrepreneur to become investment ready.

If there is significant work that needs to be done to get an opportunity investment-ready, e.g., to gain a better understanding of the business concept, or to conduct some market research, the investor may request that the entrepreneur do the work, and may be willing to fund it, in exchange for rights to the opportunity. The cost to the investor is often written off as the cost of seeking opportunities. The harder the investor has to work to understand the opportunity, the higher the return he or she expects, and the more equity the entrepreneur has to give up. The cost of IR is thus often only recovered when the opportunity succeeds.

IR and Potential of Opportunities
Investors are typically reluctant to pursue opportunities that are not investment-ready, choosing instead to give advice to these entrepreneurs and instructing them to come back when they have implemented the necessary changes or improvements. This cycle is often repeated, until the opportunity is investment ready. Investors will, however, work on an opportunity that is not investment ready, if the opportunity shows significant potential with a road-map to successful product development within a reasonable time-frame. The investor will consider the risk-return ratio of the opportunity and will expect higher returns than usual, as the opportunity will take more time and effort. Given the high number of opportunities that are not investment ready and that lack significant potential, few opportunities are ultimately advanced.

Risk Proportion of Opportunities That Are Pre-Investment-Ready: Opportunities that are pre-IR are considered high risk, given the fact that very few of them eventually attain IR or show progress. Angel investors are more willing than VC firms to work with opportunities that are pre-IR although it must be noted that the opportunity's success in becoming investmentready, is dependent on how much effort the entrepreneur himself puts in as well as the quality of the opportunity. The number of opportunities that eventually attain IR, is in the region of 10 to 20%. At the same time, it is becoming easier to attain IR, due to all the online resources and IR professionals available.

Investment in IR comes with both gains and losses. On the downside, investors run the risk of getting involved in and tied down by an opportunity that struggles to make progress, thus wasting their time, while the entrepreneur may bear significant monetary costs. However, on the upside, entrepreneurs will benefit through saving time on trying to become investmentready by themselves, as well as through receiving funding quicker.

Impact of Investment in IR
Expenditure on IR is risky as it is incurred in the hope of earning a positive return in the future. Investment in and subsidizing of IR are a necessary cost of start-ups. The investment and subsidization should, however, be targeted and selective-rather than follow a blanket approach-to be effective. The focus should be on opportunities with potential. Investment in IR leads to an increase in entrepreneurial output and investment, and subsidization of IR is not necessarily negative: value is derived from various activities. There is value in interrogating ideas and opportunities to ensure they are viable. There is value in mentors, universities, departments, and institutions helping entrepreneurs to crystallize their ideas and thinking and verify, validate and substantiate their ideas. The experience that entrepreneurs gain through the process is an indirect benefit. From the investor's perspective, not all expenditure on IR leads to investment-ready opportunities and thus carries no financial benefit. However, the investor still learns and gains experience from this.

Government Versus Private Sector
Government does have a major role to play in terms of IR and can subsidize and support private sector IR work and initiatives. The private sector is unwilling to provide IR services out of its own pocket due to the risk profile that implies that it is unlikely that the costs will be recovered. Government subsidization can thus assist with the payment of IR experts and consultants, for example. Programs and initiatives provided by government tend to have quality issues. Government itself tends not to be very productive, efficient, or motivated, and will unlikely be able to maximize output. Thus, IR should ideally be spearheaded by the private sector with financial support from the government.

How Should Investment Readiness as Task Be Allocated and Resolved? Of the Market Participants and Stakeholders, Who Is in the Best Position to Deal with Investment Readiness?
Entrepreneurs Improving IR on Their Own
Entrepreneurs can improve IR on their own to the extent that they know what information to look for, but they will still require advice from experienced professionals to fully resolve a lack of IR. Entrepreneurs can educate themselves on IR through consulting online resources, attending workshops and seminars, and speaking to industry incumbents and people who are, or have been, entrepreneurs before. Entrepreneurs can always ask for advice and assistance, but they must drive the process of becoming investment-ready by themselves. An online IR assessment or test would assist entrepreneurs to gauge their IR and point out to them where they are lacking and what they need to correct, but they will still require assistance with the finer details and points. Essentially, to resolve a lack of IR, entrepreneurs need to understand what investors require and thus how to convince and attract them. By ensuring that they offer investors an attractive opportunity with a UVP, a clear business concept and a clear market as well as addressing any potential risks the investors may identify, entrepreneurs can improve their IR on their own. Entrepreneurs can thus improve their IR through a lot of general education.

IR and Market Participants
Incubators and Business Angel Networks: Incubators and BANs can be a good source of support for entrepreneurs although their usefulness in this regard is dependent on the quality of the professionals working within the institutions as well as their motivation for providing assistance. Incubators and BANs can convert unconscious incompetence to conscious incompetence through making entrepreneurs aware of where their knowledge is lacking and what they can do to remedy their individual situations thus assisting them to improve their IR. Incubators and BANs assist entrepreneurs to verify and validate their business concept premises and assumptions and get them up to standard. Even if they do not incubate the entrepreneurs themselves, incubators can offer IR services, such as formal courses and events aimed at improving the education and knowledge base of the entrepreneurs. Angels are also able to provide coaching and mentoring, although on a more informal basis.

IR Professionals: There is a vested interest for VC bankers and angel investors to ensure that more entrepreneurs become investment-ready, as increased IR will result in a larger pool of viable investments-both in quality and quantity-and lead to significant growth in the VC market. However, VC bankers in particular are in short supply and have a lot of demand on their time and would therefore want (to show) returns on time invested. VC bankers will thus only (want to) be involved with entrepreneurs that are sure to show results and from whom income or equity will virtually be guaranteed. VC firms can, however, provide specific guidelines that set out exactly what entrepreneurs need to do to increase their chances of investment.

While VC bankers may be unwilling to assist entrepreneurs with IR, if there is no significant potential for success, angel investors tend to be more willing to interface with young and unsophisticated entrepreneurs and guide them towards IR. Angel investors can provide advice which raises entrepreneurs' awareness and consciousness. As angel investors are more involved with entrepreneurs prior to IR, they may be better positioned to assist them to become investment ready.

There is a role for consultants to play in terms of improving IR. It is naive to expect entrepreneurs to know the entire IR process without training and with the short supply of VC bankers and angel investors available to assist with IR, consultants have a crucial role to play. Consultants can increase the level and quality of IR, through advice, experience, and access to resources. The fact that consultants are more knowledgeable and experienced than the entrepreneurs themselves, already serves as an indication of their potential to assist entrepreneurs in improving their IR. The issue with consultants, however, is that they will require payment for their services and this affects the number of entrepreneurs that they are able to assist. Entrepreneurs are generally unable to pay for consultants themselves and this suggests a role that government can step into and subsidize the payment of consultancy fees. Consultants do, however, need to have proven investment, management and/or entrepreneurship experience, in order to be truly useful to entrepreneurs.

Most Suitable Participant: IR is best dealt with through providing and making available to entrepreneurs, educational resources, forums, advice, support and mentoring. The Internet is possibly the best medium through which IR services can be provided as it allows for the widescale provision and dissemination of information. Ultimately, however, it is the responsibility of the entrepreneur to ensure that he attains an acceptable level of IR.

The best market participants to deliver IR are incubators, accelerators and angel investors who act as mentors. A VC firm with an advisory arm can also deliver IR. Still, a VC firm's main role is to evaluate and consider opportunities. Accelerators and incubators already have a framework designed to assist with IR and the provision of their services is institutionalized. Consultants also have a role to play in delivering IR, although, unless subsidized, their approach may be more profit-driven-their approach may be more focused on potential returns to keep the lights on, rather than on "free" or "unbiased" consultation (what is best for the entrepreneur; what the entrepreneur truly needs; meeting the entrepreneur where he is currently at). Incubators and accelerators are set up to get entrepreneurs through an incubation and development process and are more likely to be agnostic to the outcome. To maximize their usefulness, the incubators and accelerators must have the necessary skills and experience, as well as credibility and a good reputation, and it should be ensured that they (incubators and accelerators) are accessible to all. Good quality incubators will have the necessary skills, experience and consultants.

Aside from mentoring, angel investors may also assist stronger entrepreneurs that are able to more quickly get ahead on their own in terms of IR. This raises the point that there are different calibers of entrepreneurs that require different levels or forms of assistance when it comes to IR.

How Can Investment Readiness Be Optimized and Standardized?
Factors of IR
Most entrepreneurs find themselves lacking knowledge and certain skills and attributes that contribute towards IR when they initially seek out funding. Entrepreneurs tend to be too technically-oriented and not business-orientated enough. They overly focus on their product, and not enough on the commercial metrics: the UVP, competitive advantage, sustainability, competition, and protection of their concept. They lack understanding of their market, their customers, and why their customers would be interested in their product. On the other end of the spectrum, some entrepreneurs are not innovative enough and they lack a good business idea, model or strategy, and thus propose low-quality products. Entrepreneurs also tend to be unrealistic and lack reasonable expectations regarding the validity and value of their businesses, and the potential for success-they are not critical enough of themselves and their products. Entrepreneurs fail to think like investors and do not consider the factors that investors look at, such as investment risk and return, and the entrepreneur's own attributes, such as commitment, enthusiasm and unique thinking. Entrepreneurs fail to communicate and articulate their concepts and are unable to prove their concept and reason(s) for seeking funding.

IR and Business Acumen
Business acumen is generally lacking among entrepreneurs. They lack a certain basic understanding of business and management concepts and they do not necessarily know how to run a business. IR is heavily dependent on business acumen and entrepreneurs that lack business acumen are more likely to have their opportunities turned down: With cases where there is a lack of business acumen, it is almost always fatal. The business acumen that entrepreneurs should possess, cannot only be academic, but must also be experiential, gained either through running a business or working in industry.

Whether opportunities with entrepreneurs that lack business acumen can survive depends on the entrepreneur's personality (how teachable and open the entrepreneur is to input), and the investor's response: whether the entrepreneur can somehow circumvent his lack of business acumen and the investor responds positively to this. Some opportunities survive because the entrepreneur is persistent and his opportunity does not require a significant amount of funding.

Other opportunities survive because the idea is good and the product is strong. However, the idea may still require that someone else, other than the entrepreneur, implement it.

Assessing IR
It is possible to assess (aspects of) IR objectively and there are standard metrics that an IR test can incorporate and be based on. There are already some forms of IR assessment tools available in the market. An IR test would involve both quantitative and qualitative aspects and measures. Quantitative measures can be judged objectively, however, qualitative measures such as psychometrics and the behavioral traits of the entrepreneur are more subjective. Also, investors may still want to do their own due diligence. The fact that opportunities, industries and investors are diverse and differ in their requirements also renders it more difficult to create a generic IR metric. It may only be possible to standardize the questions of an IR test to a certain extent.

An IR assessment would also improve an entrepreneur's chances of securing investment as investors may be more willing to invest or engage with an entrepreneur if they knew that the opportunity has been pre-qualified to some extent. The assessment can be in the form of an initial online IR assessment and subsequently a team of professionals that take entrepreneurs through a formal and detailed assessment. If it is made mandatory to go through such a process, access must be reasonable. To be successful, multiple parties of investors need to come together and develop an IR standard that they are willing to subscribe to and that can then be championed, acclaimed and accredited. Some basic measure or level of IR can then at least be assessed or evaluated.

IR, Quality and Efficiency in the VC Market
VC firms in particular may lack the skills and resources needed to filter and search for opportunities and may be interested in something that can improve the quality of their pipeline. VC firms have limited resources, therefore, having a middleman or a broker that can match entrepreneurs with the right investors would improve the efficiency of the VC market. It is important for VC firms to invest in IR programs as the more they invest in incubators, tools and guidelines for entrepreneurs to become investment-ready, the better for the VC market in general.

Because most entrepreneurs go through or can access incubators, it should be ensured that all incubators adequately cover IR.

VC market efficiency can be improved by increasing and enhancing interaction and interaction spaces: building on the analogy of speed dating, having entrepreneurs and angel investors meet and have a discussion, to see if they fit together. If they do not fit, the entrepreneur simply moves on to the next investor. Similarly, the quality of angel investors can also be enhanced by more effort and focus on bringing them together and having more inter-activity between them. The quality of entrepreneurs can be improved through the compilation of concise and accessible guidelines which highlight all the concepts that entrepreneurs must understand, as well as through forums to assist with IR. The provision of online IR tests to help filter and pre-screen opportunities, will assist in streamlining the process and provide for a more efficient use of investors' time.

Government can assist with improving the VC market by ensuring quality Internet access to all. Government can also subsidize IR services but without getting directly involved in the process. The revision of small business taxation law would also aid in improving the VC market by ensuring that small businesses are not treated as mature businesses, simply because they attain a certain level of investment.

Streamlining and Standardizing IR Processes
Various measures can be taken to streamline the IR process. These measures include making crowd-funding and pitching solutions and platforms such as Kickstarter, more accessible and inclusive. IR can also be streamlined through education or systemization and assistance, i.e., providing certain guidelines to follow and helping entrepreneurs to meet those guidelines. Other measures include involving VC firms in the improvement of IR. IR can be broken up based on the industry and stage of the opportunity and different investors and specialists can get involved based on their preferences.

Having online IR content aids in the streamlining process as technology can then be used to help collect better responses to IR questions, explain IR questions and guide responses to IR questions. An online forum with mentors that entrepreneurs can interact with can be created, coupled with online references and IR examples that entrepreneurs can access. Technology can further impact IR by allowing rapid prototyping and increasingly permitting agility in product designs and products.

It was noted that some of the more successful VC markets have very stringent requirements and filters, whether formal or informal, and entrepreneurs do not make it through the door, if they cannot prove that they are investment ready. Entrepreneurs in those markets are aware that it may be a risk to their reputation to present an underdeveloped opportunity and that they may not get a chance to present their opportunity again. The success of these markets can be used as an argument in favor of introducing more stringent requirements in the South African VC market.

Views on systemization efforts, such as certification, accreditation, and subsidy or reward systems, were generally divided. Certification and accreditation would be useful in that they can save investors time on filtering opportunities. However, such processes would only be useful to the point that commonality among investors' requirements can be found. The subjective aspects of IR interfere with standardization efforts. The hurdles that entrepreneurs must scale as part of a standardized process may remove the entrepreneurial spirit to some extent. Certification and accreditation can be offered as options and optional, providing the entrepreneur with credits to be considered in his favor. However, to make certification and accreditation mandatory, would result in some VC firms dominating and ultimately bypassing the process. Mandatory certification and accreditation may also over-regulate the VC market and bury the VC process in administration and administrative processes.

Raising the bar would eliminate the time wasted evaluating opportunities as investors will be able to easily assess where exactly the entrepreneur is in terms of IR and filter the results accordingly. Despite its advantages, raising the bar does present some hurdles, the highest of which will most likely be enforcement. Raising the bar may render the IR process too stringent. Introducing a mandatory IR exam or some other form of assessment may be met with resistance from entrepreneurs and may deter some entrepreneurs from the entire investment process. Additionally, because entrepreneurs are often unable to pay for services, they would not be interested in such an assessment, unless it was free and would rather refer and revert to free online IR resources. Again, more subjective aspects of IR may be more difficult to assess and making such an assessment mandatory may not provide all the answers that investors seek, thus the assessment's effect may not have as positive an effect on IR as envisioned.

While one cannot deny the benefits of government support aimed at assisting entrepreneurs with covering the actual costs associated with entrepreneurship, some investors, etc. are against subsidies or reward systems (for both entrepreneurs and investors), as such systems may encourage the pursuit of entrepreneurship and investment for the wrong reasons. The belief is that entrepreneurs and VC firms should be naturally motivated and incentivized by the natural VC process, so that it is not necessary to introduce subsidies and/or reward systems.

Also, as a way of dealing with potential abuse of a subsidy system, one suggestion is to permit each entrepreneur at least one meeting with an IR professional, after which a detailed report on the entrepreneur's IR and IR progress is compiled. Based on their findings, the IR professional can then decide whether or not to recommend further subsidized meetings for the entrepreneur. Such a process would have the added benefit of acting as a filter and signaling the seriousness of the entrepreneur.

Certification and Accreditation
(Very formal) certification and accreditation (of entrepreneurs' IR directly) would add to the compliance requirements that entrepreneurs have to meet as well as increase the time to raise funding thereby rendering it more difficult to do business. Entrepreneurs may also be reluctant to share all their information for someone to certify, as they are extremely protective of their intellectual property.

A standard due diligence test can be used for certification and accreditation and the closer the test can be brought to the due diligence process that investors follow-and mimic its outcome-the more useful it will be. Again, investors would be more willing to look at opportunities that have been approved by an accredited consultant as this can act and serve as a form of pre-qualification and they would benefit from the time saved in filtering opportunities. The issue with this process, however, is that there is no standard against which consultants can be measured in terms of IR accreditation. Therefore, they may not be deemed credible. There may also be an aspect of subjectivity, as the consultant may not look at opportunities through the same lens as an investor. The role, duties and contribution of the consultant would thus need to be explicitly set out and resolved. Incubators may have this credibility and investment experience which may constitute and serve as a form of (informal) accreditation due to the internal processes that they put down and in place.

It is stressed that this process must not be made mandatory and certification should not get in the way of entrepreneurs approaching investors, especially those entrepreneurs who are able to articulate themselves well. The process should be treated as an option that will count in favor of entrepreneurs but that does not over-regulate them. The process should also allow for investors to access all screened opportunities that were rejected to counter the possibility of differences in their assessment and that of the accredited consultant(s). Again, the issue of cost exists. With entrepreneurs generally unable to pay and VC firms unwilling to pay for the service upfront, unless the opportunity has a high likelihood of being successful, the role that government can play in subsidizing these costs remains.

Impact of Quality Standards
The effectiveness of processes that seek to raise the bar in terms of IR will depend on the particular processes being used. Any IR process that helps with and contributes to the maturity of entrepreneurs will have a positive impact. Raising the bar relays a message to entrepreneurs that there are requirements that must be met before investment can be attained and there may be a need for the entrepreneur to put in more effort to ensure his opportunity meets these requirements. Raising the bar also creates opportunities for the entrepreneur to collaborate and improve his idea (increase its quality) through meeting with and receiving constructive criticism, advice and support from IR professionals and mentors. Raising the bar through formal assessment should not, however, be mandatory for investment as it may reduce the innovative and entrepreneurial flair of opportunities. Formal assessment should be a means to improve entrepreneurs' chances at investment not a potential hindrance. Stricter requirements coupled with detailed and clear feedback should benefit entrepreneurs and improve the quality of their opportunities. An administration and governing body that is supported by government, and that looks to manage and maintain IR guidelines, documentation, a forum, mentors, contact details of consultants and that may offer IR assistance itself would also have a positive impact on entrepreneurs and the opportunities they present.

Stricter requirements would be beneficial to the VC market, if they result in more entrepreneurs and opportunities being further down the line in terms of IR. The more concrete the proposals and the better opportunities are defined, the less time investors waste and the better for the VC market in general. However, the general consensus is that stricter requirements in terms of IR may negatively impact the VC market as it may render the process more onerous for VC firms and may increase their duties and responsibilities. Stricter requirements may also render entrepreneurs more apprehensive to present their opportunities and the VC market may miss out on opportunities that have potential and that may not actually have been that lacking in terms of IR. While stricter requirements may increase the quality of opportunities, any corresponding increase in regulation may result in a reduction in the number of opportunities that are presented to the market thereby hindering the market's growth.

Increasing Entrepreneurs' Awareness of IR
Awareness of IR among entrepreneurs can be increased in a number of ways, the most predominant of which is through education. IR awareness can be increased through the use of consultants that provide entrepreneurs with advice, feedback and support. Entrepreneurs may also learn from the experiences and advice of role models, mentors and other acclaimed people in the industry, as well as through the success stories of entrepreneurs that have gone through an IR process. Educational material, such as booklets and other guidelines prepared by experts, can also contribute to raising entrepreneurs' IR awareness levels together with the provision of IR workshops and other forums. Entrepreneurs should also have a natural curiosity and should demonstrate effort, commitment and initiative when it comes to IR and working towards learning about and improving their IR.

Improving Additional Aspects of IR
Overconfidence on the Side of the Entrepreneur: Overconfidence is not necessarily a problem and entrepreneurs that are slightly more overconfident are generally more successful. Overconfidence is only a problem when it leads to ignorance. Overconfidence is generally associated with arrogance, where the entrepreneur does not question his assumptions anymore. Overconfidence is thus dealt with through seniority with the more experienced investor interrogating the entrepreneur, asking difficult questions that will bring him back to earth and force him to think, reflect and consider his shortcomings. It is found that most entrepreneurs are humbled this way.

Improper Understanding of Equity and Financing: Venture capitalists will be concerned if an entrepreneur does not know what the VC firm requires. It is expected that the entrepreneur knows and understands how VC and equity work. That said, an improper understanding of equity and financing can be dealt with through education. It is not the duty of the investor to explain or teach this to entrepreneurs. There are, however, various platforms and sources of information that entrepreneurs can make use of.

Holistic Approach to IR
IR is best dealt with when the entrepreneur works on resolving it on his or her own, and then approach incubators and other IR professionals for the final touches. Entrepreneurs can work on their IR through consulting IR content, material, guidelines and tests-particularly those provided online. Outside of the entrepreneur working on their own, incubators and accelerators are in the best position to assist with IR. Incubators can also complement their general service offering with interaction and partnerships with investors and industry.

The entrepreneur should cover at least part of the cost of resolving IR to signal their commitment and seriousness in pursuing their opportunity. The entrepreneur can either pay upfront through deferred payment or through offering equity. Alternatively, the entrepreneur can consider an incubator or a VC firm with an advisory arm where the cost would be covered by the VC firm and then recovered through an equity share in the business. VC firms can also partner with incubators and accelerators and help share the costs around IR in anticipation of the pipeline and deal flow of opportunities that will come out of the incubator or accelerator. Finally, government can assist with covering the cost of IR through providing subsidies and supporting formal institutions such as incubators and accelerators. Government is in the position to gain most from the VC market and entrepreneurship particularly in terms of positive externalities and thus has the greatest hypothetical incentive to support IR initiatives.

Government, Culture and IR
Culture plays a major role in fostering the acceptance and rewarding of entrepreneurs. South Africa has a very innovative culture of solving problems, but has a conservative culture regarding risk-taking. Fear of failure, and negativity around failure, persist, which may discourage potential entrepreneurs from pursuing opportunities. There exists more of a corporate culture and mindset that encourages attending university and then seeking employment thereafter. Very few South Africans go to university to learn how to run a business and how to be entrepreneurial. Because very little focus is placed on including entrepreneurship in the education system curriculum, IR continues to be a major issue in the VC market, particularly as it pertains to a lack of knowledge.

The South African government encourages, and has designed policies aimed at supporting, entrepreneurship and SME development. However, there is still room for more to be done. Government policies, such as Section 12J of the Income Tax Act, have been well received, as well as permitting private banks to assist entrepreneurs with company and tax registration processes in one place. However, there is still a lot of unnecessary red tape that entrepreneurs and VC firms have to go through. For example, paying taxes is still a difficult process to endure, while labor laws can make employment processes burdensome for entrepreneurs. There is also a need for laws that tolerate failure, and allow an entrepreneur to close his business and move on, without having to deal with too many regulations. The government has attempted to support entrepreneurs and incubators through the provision of grants and incentives. However, the administration required to participate in these incentives is onerous, and the funding may not always be used for its intended purposes.

To fully enable and support entrepreneurship, and thus improve IR, various measures must be undertaken by government. Government should focus on the education of entrepreneurs, from an early stage, across the entire spectrum of entrepreneurship-from basic to advanced entrepreneurship. Government should invest in universities, and aim to decrease the distance between universities and incubators, by providing resources for incubator infrastructure. Government should also place focus on the quality of the incubators and entrepreneurs that it supports, to ensure that its funding does not go to waste. Entrepreneurs should also be made aware of the support systems that are available to them, and government should aid this by supporting the provision of informative workshops, and developing networks that bring investors and entrepreneurs together.

Government intervention into entrepreneurship should be very specific, as a blanket or general approach will be ineffective. Government should support the establishment of a private-public body for entrepreneurs and entrepreneurship, that is run by seasoned entrepreneurs, and which could facilitate all of the activities detailed above. The governing body should cater to the different levels of entrepreneurs, and should create a network that has good coverage, easy access, and that is known and renowned. The governing body should organize and hold talks on entrepreneurship and entrepreneurship-related issues, as well as assist entrepreneurs to work through online material and guidelines on IR. Some of the governing body's activities, like training for example, can also be outsourced. Government's support of this governing body, as well as incubators, would assist in the issue of off-take for education and innovation, as entrepreneurs who go through the education process, can be guaranteed of support for their ventures, up until investment. To ensure the governing body's efficiency and credibility, it must be made clear how the body and its processes aim to impact and improve entrepreneurship, and the expected results. Additionally, it must also be clear how the governing body's efficiency and usefulness is to be evaluated. Furthermore, it must be clear to entrepreneurs what processes they must follow to receive assistance, what processes they must follow to succeed, and what successful entrepreneurs have done to facilitate their own success.

Discussion
Most entrepreneurs present half-baked opportunities and are not IR. Entrepreneurs lack in terms of knowledge and their expectations. A significant number of opportunities that are not IR are discarded because VC firms are not willing to take the high risk.

The time taken to correct or improve IR is also dependent on the entrepreneur's background and mindset: How commercially-or business-oriented the entrepreneur is, and how receptive he is to the advice and recommendations made to him.

Venture capitalists generally do not give hard "no's," because they do not want to lose the potential deal or pipeline. Venture capitalists normally provide entrepreneurs with advice and point them in the right direction. Investors are typically reluctant to pursue opportunities that are not investment ready, choosing instead to give advice to these entrepreneurs and instructing them to come back when they have implemented the necessary changes or improvements. This cycle is often repeated until the opportunity is investment ready.

The VC firm may be willing to back the entrepreneur under certain circumstances and conditions even if the opportunity is not really investment-ready, particularly if they see potential. Investors will work on an opportunity that is not investment-ready if the opportunity shows significant potential with a road-map to successful product development within a reasonable timeframe. Thus, having a good idea may be more important than IR per se and IR is also much about the quality of opportunities. An investor may go with a highquality, poor-IR opportunity and discard a low-quality, moderate-IR opportunity. The investor will consider the risk-return ratio of the opportunity and will expect higher returns than usual, as the opportunity will take more time and effort. VC firms may be more reluctant and angel investors may be more willing to take a chance on opportunities that are not investment ready.

An opportunity's potential in becoming IR is dependent on how much effort the entrepreneur himself puts into the work as well as the quality of the opportunity. Whether an idea or opportunity gets discarded also depends on the entrepreneur. The entrepreneur's idea may be great but the entrepreneur himself may not be the one that will make it a success. The ability and willingness of the entrepreneur to work with the investor (openness to criticism and suggestions, working relationship, ability to align), can also affect perceptions of IR.

IR depends on how advanced and developed the idea or concept is and how far the idea is from a product prototype. Some opportunities cannot be recovered because there is no product or market, or the entrepreneur is already insolvent. If there are not too many issues with an opportunity, it can be ready for investment in a few weeks. If it involves management, leadership, business development and growth, understanding of the market, or soft skills development, IR can take much longer.

An IR professional needs to determine what is missing and what is still required regarding the IR of an opportunity, as well as what factors the entrepreneur does not know or does not have ready that would contribute to IR. The time that it takes to get an opportunity IR is greatly dependent on the entrepreneur, how open he is to input, and how willing he is to cooperate and incorporate suggestions. Attaining IR becomes an iterative process of giving feedback and tasks to the entrepreneur and reviewing the tasks once completed.

Insufficient or incomplete information, details and assumptions constitute the bulk of the time to attain IR. Entrepreneurs' expectations are often ungrounded and unrealistic and their valuations are based on exceptional cases or success stories.

The UVP is the foundation of an opportunity and a fundamental component of IR. However, UVP is also often a weakness for entrepreneurs. VC firms may be unwilling to further work with an entrepreneur and help him reach IR, if the UVP is lacking. VC's can guide entrepreneurs but cannot discover the business opportunity for them. Consultants may be more willing to assist and help entrepreneurs work on certain aspects (of UVP). It is difficult to correct the UVP, as it either exists or does not exist. Where the UVP exists, but is not properly articulated, it is easier to fix.

Most entrepreneurs find themselves lacking knowledge as well as certain skills and attributes that contribute towards IR. Entrepreneurs tend to be too technically-oriented and not business-orientated enough. They focus too little on the commercial metrics. On the other end of the spectrum, some entrepreneurs are not innovative enough and they lack a good business idea, model or strategy, and thus propose low-quality products. Entrepreneurs also tend to be unrealistic and lack reasonable expectations. They are not critical enough. Entrepreneurs fail to think like investors and do not consider the factors that investors look at. Entrepreneurs fail to communicate and articulate their concepts and are unable to prove their concept and reason(s) for seeking funding.

Business acumen is generally lacking among entrepreneurs. They lack a certain basic understanding of business and management concepts and they do not necessarily know how to run a business. IR is heavily dependent on business acumen and entrepreneurs that lack business acumen are more likely to have their opportunities turned down. In short, entrepreneurs lack experience.

What Is the Cost of Investment Readiness to the Venture Capital Market?
IR is seen as a major problem. It impacts VC transaction rates, the volume of good opportunities and market volume, the amount of investment in the VC market, the effectiveness and efficiency of the VC market, players in the VC market as well as their sophistication, growth of the VC market, and market development, refinement, and maturity.

Competition lacks in the VC market, and this in turn impacts IR. Related to this, IR is also affected by the number of good entrepreneurs. There are too few quality high-risk, highreturn opportunities. Lack of IR results in shallow VC pipelines.

The cost of IR is shared between the entrepreneur and the investor. The entrepreneur generally carries most of the cost of IR because readiness is seen as a pre-investment issue. Investors incur IR costs through performing due diligence as well as through the opportunity cost associated with the other opportunities that they may forgo while focusing on and assisting an entrepreneur to become investment ready. If there is significant work that needs to be done to get an opportunity investment-ready, e.g., to gain a better understanding of the business concept or to conduct some market research, the investor may request that the entrepreneur do the work and may be willing to fund it, in exchange for rights to the opportunity. The cost to the investor is often written off as the cost of seeking opportunities. The harder the investor has to work to understand the opportunity, the higher the return he or she expects, and the more equity the entrepreneur has to give up. In principle, the cost of IR is mostly only recovered when the opportunity succeeds.

Opportunities that are pre-IR are considered high risk, given the fact that very few of them eventually attain IR

Subsidization: Expenditure on IR is risky as it is incurred in the hope of earning a positive return in the future. Investment in and subsidizing of IR is a necessary cost of start-ups and entrepreneurship. The investment and subsidization should, however, be targeted and selective. The focus should be on opportunities with potential. Some of the benefits of investment in IR are increased entrepreneurial output and gaining of experience.

How Should Investment Readiness as Task Be Allocated and Resolved? Of the Market Participants and Stakeholders, Who Is in the Best Position to Deal with Investment Readiness?
There is a significant number of IR services and programs available in the VC market and the support structures are growing. The most prominent are incubators, accelerators, business schools and business support services. There are brokers and consultants that do pre-duediligence and who help with IR.

With regard to IR assistance and material, IR content, templates and assessments are readily available online. There are specific entrepreneurship platforms, VC's websites provide guidelines specific to their unique requirements, social media platforms also serve as online sources for information, there are also books available and entrepreneurs can attend seminars, industry conferences and talks, and can complete courses. Some hybrid VC firms tend to invest in IR or advisory services. Selection programs screen and take in candidates looking for VC funding. Some major companies and banks are also involved in and providing IR services. More informally, there are consultants and angels who offer advice-whether solicited or unsolicited, paid or unpaid. Mentors equally offer guidance.

An ideal VC market would be able to mentor and assist entrepreneurs on the holistic aspects of IR and opportunities, giving entrepreneurs' advice and drawing their attention to the points that they may be missing.

An ideal VC market consists of VC teams made up of people that are experienced in starting and running businesses-people that are able to evaluate opportunities based on experience.

The focus mostly tends to be on entrepreneurs that are further down the line than those that are just starting out with their ideas.

There is a major gap in terms of entrepreneurs' awareness of IR. The perception among entrepreneurs is that IR is easy. Early stage entrepreneurs in particular are not IR and often have not received advice on IR and how to ensure that they are IR. Entrepreneurs know and are aware of the basic requirements and components of IR. Yet, they still fail to put forth and present a UVP. Based on this, it can be said that IR guidelines are inadequate and are failing.

Entrepreneurs can always ask for advice and assistance but they must drive the process of becoming investment-ready by themselves. At the same time, entrepreneurs can educate themselves on IR and can improve their IR on their own, (only) to the extent that they know what information to look for. They will still require advice from experienced professionals to fully resolve IR. Similarly, an online IR assessment or test would assist entrepreneurs to gauge their IR and would help point out to them where they are lacking and what they need to correct but they will still require assistance with the finer details.

The best market participants to deliver IR assistance are incubators, accelerators and angel investors who themselves act as mentors. Accelerators and incubators already have a framework designed to assist with IR and the provision of their services is institutionalized. To maximize their usefulness, incubators and accelerators must have the necessary skills and experience as well as credibility and a good reputation and it should be ensured that they are accessible to all. The extent to which incubators and BAN are a good source of support for entrepreneurs is dependent on the quality of the professionals working within the institutions as well as their motivation for providing assistance. Incubators and BANs can convert unconscious incompetence to conscious incompetence, through making entrepreneurs aware of where their knowledge is lacking. Incubators can also offer general IR services.

As angel investors are more involved with entrepreneurs prior to IR, they may be better positioned to assist them to become IR. There is a role for consultants to play in improving IR. It is naive to expect entrepreneurs to know the entire IR process without training. With the short supply of VC bankers and angel investors available to assist with IR, consultants have a crucial role to play. Consultants need to have proven investment, management and entrepreneurship experience. The issue with consultants is that they require payment for their services. Government can step in and subsidize the payment of consultation fees.

The duties of the consultant would need to be explicitly set out and resolved. Incubators may have the required and needed credibility and investment experience which constitute and serve as a form of informal accreditation due to their internal processes that they put down.

The government is really the candidate to gain most from the VC market as well as entrepreneurship prospering, particularly in terms of positive externalities, and thus has the greatest incentive to support IR initiatives.

How Can Investment Readiness Be Optimized and Standardized?
Any IR process that helps with and contributes to the maturity of entrepreneurs will have a positive impact.

Efficiency: A lot of time is spent on getting the UVP right and in place and understanding what the core business is about. The venture capitalist, consultant or adviser spends the majority of their time checking all of the entrepreneur's assumptions regarding the market and the UVP.

Specialization: Market participants can more clearly define their particular focus in a way that is visible and clear to entrepreneurs.

A form of broker can help entrepreneurs prepare and find the most suitable VC. VC's have limited resources, therefore, having a middleman or a broker that can match entrepreneurs with the right investors would help to improve the efficiency of the VC market.

There are different calibers of entrepreneurs and they require different levels or forms of assistance when it comes to IR. Stronger entrepreneurs may be able to more quickly get ahead on their own in terms of IR.

IR should be broken up based on the industry and stage of the opportunity and different investors and specialists can get involved based on their preferences.

Investors, particularly VC's, may lack the skills and resources needed to filter and search for opportunities, and would be interested in something that can improve the quality of their pipeline.

Guidelines: Although it already generally exists, IR documentation and material should be made clear and should be adapted for each opportunity stage.

Concise and accessible guidelines should be compiled that highlight all the concepts that entrepreneurs must understand.

It must be clear to entrepreneurs what processes they must follow to receive assistance, what processes they must follow to succeed, and what successful entrepreneurs have done to facilitate their own success. VC's can provide specific guidelines that set out exactly what entrepreneurs need to do to increase their chances of investment.

Focus: Although IR services are provided in the VC market, few of these services approach IR from the mindset of VC's, particularly in certain areas of VC, such as early stage VC. To resolve a lack of IR, entrepreneurs also need to understand what investors look at and require.

IR Standards: The fact that there is no real standard for IR, is a shortcoming. Multiple parties of investors need to come together and develop an IR standard that they are willing to subscribe to and that can then be championed, acclaimed and accredited. At least some basic measure or level of IR can then be assessed or evaluated.

Entrepreneurs should also have a natural curiosity and should demonstrate effort, commitment and initiative when it comes to IR and working towards learning about and improving their IR. Some of the more successful VC markets have very stringent requirements and filters, whether formal or informal, and entrepreneurs do not make it through the door, if they cannot prove that they are IR. This may be something incubators, accelerators and consultants can pick up and run with-differentiation may come through maintaining higher standards.

Stricter requirements, coupled with detailed and clear feedback, should benefit entrepreneurs and improve the quality of their opportunities.

IR Metrics: It is possible to assess IR objectively and a standard IR metric would be possible. An IR test would involve both quantitative and qualitative aspects. Quantitative measures can be judged objectively. Qualitative measures may be more subjective. Investors may still want to do their own due diligence. The fact that opportunities, industries and investors are diverse and that investors differ in their requirements, render it more difficult to create a generic IR metric.

An IR assessment may improve an entrepreneur's chances of securing investment, as investors may be more willing to invest or engage with an entrepreneur, if they know that his opportunity has been pre-qualified to some extent. The assessment can be in the form of an initial online IR assessment, subsequently followed by a team of professionals that take entrepreneurs through a formal and detailed assessment.

One objection is that IR involves an aspect or degree of subjectivity, as an IR metric or consultant may not look at opportunities through the same lens as an investor. Also, more subjective aspects of IR may be more difficult to assess and IR assessments may not provide all the answers that investors seek. In this regard, it would be important to focus on what can be done and achieved and the likely accuracy and success rate that can be attained. Even though they may not be perfect, IR assessments or metrics are expected to attain high levels of success and thus can provide valuable support or first-tier services. The VC is under no obligation and may allow himself to be guided by the IR assessment.

Technology: With regard to IR metrics, technology can be used to help collect better, more comprehensive responses to IR questions, explain IR questions better and guide entrepreneurs' responses to IR questions.

Furthermore, an online forum with mentors that entrepreneurs can interact with can be created, coupled with online references and IR examples that entrepreneurs can access.

The Internet is possibly the best medium through which IR services can be provided as it allows for widescale and rapid dissemination of information.

The provision of online IR tests can help to filter and pre-screen opportunities and can assist in streamlining the process and providing for a more efficient use of investors' time.

Quality: The quality of IR programs and services is important. Business and start-up experience is needed to assist entrepreneurs get their opportunities off the ground and this experience is often lacking.

Development: It is important for VC's to invest in IR programs as the more they invest in incubators, tools and guidelines for entrepreneurs to become IR, the better for the VC market in general.

Assistance: Some of the best ways to deal with IR is through the provision of educational resources and forums, advice, support and mentoring to entrepreneurs. The IR process can be streamlined by making platforms more accessible and inclusive. Forums can assist with IR.

The IR process can also be streamlined through education-providing good quality guidelines to follow and helping entrepreneurs to meet those guidelines.

Another option to consider may be to permit each entrepreneur at least one subsidized meeting with an IR professional, after which a detailed report on the entrepreneur's IR and IR progress is compiled. Based on the meeting, the IR professional can then decide whether or not to recommend further subsidized meetings for the entrepreneur. Such a process would have the added benefit of acting as a filter and signaling the seriousness and readiness of the entrepreneur. Moderation of the process would ensure quality.

Interaction: VC market efficiency can be improved by enhancing and accelerating interaction between the various market participants-entrepreneurs and investors.

Certification and Accreditation: Certification and accreditation as systemization efforts may be useful in that they can save investors time by additionally helping to filter opportunities, provided that they are made optional rather than mandatory.

Asking difficult questions forces the entrepreneur to think, reflect and consider his shortcomings.

Awareness: Awareness of IR among entrepreneurs can be increased through education, consultants, role models, mentors, acclaimed industry-players, material and content, workshops, forums and success stories. Because many entrepreneurs go through incubators, it should be ensured that all incubators adequately cover IR. Also, given that most entrepreneurs have access to incubators, incubators can equally be an important key in providing general IR support to outsiders.

In general, awareness of IR relates much to (1) awareness of IR (entrepreneurship) support services, as the latter will automatically lead to the former, and (2) the prominence, renown, and popularity of such IR support services: A distinct, noted, and popular center will be frequented and makes it very easy to regulate what is provided and communicated to entrepreneurs as most (all) entrepreneurs by implication will access the center as a reference and resource point. A number of support centers are still acceptable, provided that their message and quality are on par. In very general terms, if it is known that entrepreneurs will access support services as part of their journey and that all such support services emphasize and stress IR. IR in principle should be far less of a problem.

Governing Body: An administration and governing body that is supported by government can greatly benefit IR services by looking to manage and maintain IR guidelines, documentation, a forum, mentors and contact details of consultants and can even consider offering IR assistance itself.

Government should support the establishment of a private-public body for entrepreneurs that is run by seasoned entrepreneurs and that could facilitate a number of IR activities detailed above. The governing body should cater to different levels of entrepreneurs and should create a network that has good coverage, easy access and is known. The governing body should organize and hold talks on entrepreneurship and entrepreneurship-related issues as well as assist entrepreneurs to work through online material and guidelines on IR. To ensure the governing body's efficiency and credibility, it must be made clear how the body and its processes aim to impact and improve entrepreneurship along with the expected results. It must also be clear how the governing body's efficiency and usefulness are to be evaluated.

Government: Government intervention into entrepreneurship should be very specific as a blanket or general approach will be ineffective. Government has a major role to play in terms of IR and can subsidize and support private sector IR work and initiatives. The private sector is unwilling to provide IR services out of its own pocket due to the underlying risk profile, which implies that it is unlikely that the costs will be recovered. For example, government subsidization can thus assist with the payment of IR experts and consultants. Programs and initiatives provided by the government tend to have quality issues. IR should ideally be spearheaded by the private sector with financial support from the government. Government can subsidize IR services but without getting directly involved in the process.

Specialization: Improving IR and VC market efficiency involves maximizing the ability to divert inefficient demands on their time away from VC's and to improve the quality of work the VC occupies himself with (freeing up the VC). Technology and consultants are key solutions in this regard.

Consultants: Consultants too are able to add value by removing some of the load and demands on VC's time. In this case, the experience and reputation of the consultant are crucial.

Perspective of the VC: As part of IR, a great emphasis is placed on understanding IR from the perspective of the VC and what the VC looks for. It is more a case of what the VC considers to be a great opportunity than what (the entrepreneur considers) would be a great opportunity.

Perspective of the Entrepreneur: With IR, both the views of VC's and entrepreneurs are relevant and should be considered. Adamant VC's commonly argue that a lot of content on IR is available and in that sense find it equally 'surprising' that entrepreneurs cannot and do not get IR right. More sympathetic angels and consultants argue that IR is not that easy, actually requires experience on the side of the entrepreneur and that the entrepreneur ultimately requires (and will always require) some assistance and hand holding. The views of entrepreneurs on IR metrics would be equally as valuable, particularly in terms of how they see IR, (the nature of) their knowledge and awareness of IR, their approach to IR, their view of the IR process and the aspects they commonly struggle with and desire assistance with. Focusing on the views of entrepreneurs themselves should help to build very effective and efficient IR assessment tools and systems.

Culture: IR is also impacted by culture-simply the recognized and known way of doing things, the market and industry requirements, and levels or standards of quality. This is multiplied by a recognized process or procedure and recognized market players like incubators and VC's. That is, also in an ideal sense, the procedures and requirements related to IR are well-known because certain key market players are well-known and well regarded.

Accreditation: Accreditation may be a way for market players like incubators and consultants to signal their competency and accomplishments to help with their reputation and differentiation. The accreditation of IR service providers may equally benefit entrepreneurs as it ensures quality of IR services.

Specifically with regard to entrepreneurs, participants were weary of formal systems of accreditation and evaluation. Informal systems were rather recommended. The issue raised is that formal systems may increase demands on the market and may shy away entrepreneurs. Informal systems as support systems that are not mandatory, but optional, may be as effective and helpful. Entrepreneurs may signal just as well through informal systems and informal systems may be sufficient for VC's, etc. to screen. Again, VC's can look at, and to, forms of accreditation, also informal, as a way to build optional, additional, on-the-side, high-IR pipelines.

General: Overall, the average quality of opportunities per entrepreneur and prevalent in the VC market significantly impacts and determines the extent of IR in the market. Factors to consider with regard to improving IR and providing IR services include cost, reach, coverage, pervasiveness, quality, and awareness. In this regard, and from this perspective, technology, education and incubators promise good results. Ultimately, technology seems and promises to be one of the cheapest and most effective solutions to improve IR. Although perhaps slower, education should be another effective solution, equally due to its pervasiveness. Similarly, though much quicker than education, incubators and support centers that offer general IR services, may also be simultaneously cost-effective and pervasive.

IR Assessment and Metrics
The current view is that an IR assessment or metric is possible to some extent. To a large extent, there are common aspects and parameters to consider and cover and that can be incorporated. There are objective and quantifiable aspects to IR to a large extent. However, there are also idiosyncratic and unique as well as subjective cases and aspects.

Also of relevance with regard to an IR metric is an industry or standard measure, all relevant stakeholders in the VC market agree to and come into agreement on.

Aspects like objectivity and comprehensiveness of the IR metric-of answers-are also considered as important. These points and factors point to the role technology can play as well as the opportunity to use technology to turn IR and IR management into a competitive advantage. There is room for a lot of investment and development in technology related to IR metrics. Firstly, using technology to make such an IR metric as comprehensive and userfriendly as possible thereby maximizing the assistance provided to the entrepreneur during and through the process and consequently maximizing the return accruable through the IR metric and the use of technology. A lot of assistance and references can be built into IR metrics and platforms to increase the comprehensiveness of entrepreneurs' understanding and answers and to steer and direct entrepreneurs as much as possible.

The performance and contribution of IR metrics should be considered in the context of their accuracy and success rates and moderation. The performance of IR metrics would involve the possibility/probability of both over-evaluating and under-evaluating entrepreneurs and their opportunities: (1) assessing an opportunity as IR, when it is not, and (2) assessing an opportunity as not IR, when it is. When considering both the generalities and intricacies in IR assessment, it is likely that IR metrics would have above average to generally high success rates. Regardless, it is still possible to moderate the IR metric, in order to reverse anomalies. The IR metric does not have to be perfect before it can add value for the VC and can offer a great source of guidance to the VC, on the side, with the VC under no obligation and still able to follow his own discretion and mind, and go with or against a recommendation.

As example, a moderated accuracy and success rate of 80%, which is believed to be more than attainable, would mean that VC's would agree with 80% of IR assessments and only need to review 20% of cases. The (evident) cost-benefit implications of this should be considered in greater depth. As a tool and system such an IR metric may already independently resolve and move forward a number of entrepreneurs and their opportunities, as cases, independent of VC's-without need for VC involvement. Of all cases evaluated and forwarded to the VC as IR, the VC will only disagree with 20% of these assessments, implying a strong pipeline of IR opportunities-most of the opportunities in the pipeline will be IR. 20% of opportunities that are not recommended to VC's, because of and over IR, would be IR opportunities. Furthermore, if it is assumed that rejection of opportunities on grounds of IR comes with (system/platform/technology generated) feedback, as well as experience (the entrepreneur learned through the process) and that an entrepreneur can resubmit to have his IR reassessed, the question and proposition are that the entrepreneur can likely (use technology to) further improve his IR and that he is likely to be assessed favorably during a subsequent assessment. This also demonstrates that professional assistance can complement an IR metric (as system). In short, the proposition would be that the accuracy and success rates of an IR metric can be improved on through subsequent assessments. It is again highlighted that technology may be used to add and attach feedback to IR metrics to increase the sophistication thereof even further.

IR metrics, coupled with technology and professional assistance, offer a simple, yet sophisticated IR tool and solution. IR metrics can be implemented as something "on the side" or in the "background" and at the "lower levels". It can be complemented with technology and professional consultants. Technology can introduce a lot of sophistication to IR metrics. The combination and integration of IR metrics, technology, and professional assistance, promise to be a comprehensive IR system.

Therefore, IR metrics and technology can be used to construct an optional, additional, onthe- side, high-IR pipeline for the VC. And technology allows a layered approach to (dealing with and resolving) IR, which should increase its cost-effectiveness.

Assistance
With IR, a prominent question is the extent of assistance to provide. The issue with IR is less the provision or availability of assistance but more the cost (and quality) thereof. Professional help with IR is readily available but is not free. Thus, it becomes an issue of the level of assistance and support to provide, and the likely benefits that can be expected from this. IR assistance also involves quality of support. In this regard, the universal view is that it should be a service provided by the private sector and not the public sector to ensure quality. Furthermore, even within the private sector, steps should be taken to ensure quality. IR assistance involves a trade-off between pervasiveness or exclusivity and cost, hypothetical levels of support (and thus cost) varies from unlimited support to each and all, to limited support (e.g., the first IR consultation is free, with additional support conditional on the progress and potential the candidate demonstrates); to public-private-partnerships (mostly focusing on further incentivizing the participation of consultants based on an equity sharing scheme, by subsidizing (some of) the risk to the consultant, and further supporting the consultant), to no government support, only private sector-based services and support.

Advancing IR assistance much hinges on: (1) the ability to utilize technology, (2) the ability to turn it into a competitive advantage (through technology), (3) a focus on the benefits or value proposition to VC's (for example, the value proposition of the IR consultant to the VC), and (4) a focus on the benefits and positive externalities of improved IR: the impact of intervention in terms of IR on opportunities and consequently on the VC market and economy. In the context of IR, technology, competitive advantage, and value proposition, are all means to increase the ability of the private sector to improve IR on its own, without support in the form of subsidies.

With regard to offering IR support, a cost-benefit analysis should consider: (1) the number of entrepreneurs to provide support to; (2) the cost of support (for example, an IR consultation session); (3) the ratio of entrepreneurs in general, and entrepreneurs that manage to get access to VC's or professional (private sector) assistance; (4) the likely or possible net increase in demands on the system when support is offered more freely or readily; and (5) the impact of such an IR program (freeing up VC's; improving the efficiency of the market; the quality of opportunities).

When overall market participation is relatively high and when the average quality of opportunities is relatively poor, screening, as an immediate, short-term solution to IR becomes necessary and important, and technology, for instance, offers a cheap and effective way of doing so.

One proposed option is to at least offer each entrepreneur a subsidized, free initial IR consultation with a professional IR consultant. Entrepreneurs may of course be requested and expected to first qualify, by completing a (very) basic, straightforward IR assessment, for instance. Further, subsidized support is conditional on the findings of the consultant, in terms of the readiness of the entrepreneur and the quality of his opportunity. One principal question pertains to the underlying seriousness of entrepreneurs in general: whether this (the above) essentially simply delineates an effective screening tool, in that the outcome is that a number of entrepreneurs are (unsurprisingly) turned down and sent back with feedback and homework, only to never return thereafter. Or, whether entrepreneurs ultimately see this as an opportunity, and are motivated, inspired, activated, propelled and triggered by this, so that they wish and plan to make use of the system (even) more. Put differently, whether a simultaneous decrease in opportunities and an increase in quality opportunities are implied or whether merely an increase in quality of opportunities is implied.

Very rudimentary, at a coarse estimate of 10,000 entrepreneurs in the market who are in true need of IR assistance, and at a cost of ZAR 1,000 ( ?$100) per consultation session, that would imply ZAR10 m ( ?$1 m) p.a., to provide each entrepreneur with at least one IR consultation session. It either assumes very low return (succession) rates-few entrepreneurs returning or qualifying for follow-up sessions-or poorly considers the need for subsequent follow-up consultation sessions. The estimated number of entrepreneurs may also be controversial, particularly when considering notions of necessity entrepreneurs, "copycat survivalist" entrepreneurs, "unlikely to succeed, unrealistic" start-ups, etc. The question also to consider then is to whom IR support extends to-which entrepreneurs to consider in this regard. Some VC experts anticipate and estimate the actual cost and ideal budget to provide IR support services at ZAR100 m ( ?$10 m) p.a., and assuming the funds are prudently spent. The estimate has important implications in any case: if the sense is that government (or whoever) will get the money back, and government does not spend the money, it means that government is not taking advantage of all its opportunities. On the other hand, if the sense is that government will not get the money back, it implies the system is flooded, likely overextended, and must rather be cleaned up (i.e., screening), and emphasis should be on improving quality first.

Conclusion
IR impacts the number of transactions, volume, number of investors, amount of investment, efficiency, growth, development, and maturity of the VC market.

Poor IR within the VC market implies that VC's are not efficiently used and applied.

It is simultaneously the belief that entrepreneurs should work on and resolve IR on their own and that they need assistance with IR. In this regard, the (in) experience and (lack of) business acumen of the entrepreneurs, play an important part.

IR services and content are generally pervasive (IR content is readily available online, and IR services generally abound), yet have questionable results. The adequacy, and also (particularly) the quality, thereof can thus be questioned.

The quality of opportunities-the average quality of opportunities per entrepreneur-and UVP, are important and key determinants of IR.

In general, IR solutions need to consider cost, quality, reach, coverage, or pervasiveness, awareness and assistance.

The issue and matter of IR assistance to improve IR requires an indepth cost-benefit analysis. The number of users, cost, benefits, and method should be considered. The analysis should also consider whether the system is not overworked and over-utilized, and thus rather requiring and mandating a focus on improving quality.

IR assistance raises the issue of the seriousness of entrepreneurs, and related to this, the motivation of entrepreneurs. Put differently, it is questioned whether adequate assistance may not equally be an antecedent of entrepreneurial activity.

Method and technique available to improve IR typically implies running additional pipelines on the side, also as a way to improve efficiency and raise the bar, without making it mandatory or restricting access-without making access more difficult. Such a form and type of exclusivity may also serve to raise the bar within the industry in a friendly and accommodating manner.

There is definitely room and a place for technology, also IR metrics as technology, to assist with IR. Even though it may require and imply significant research and development, IR metrics can be integrated with technology and personal, professional assistance, to offer a comprehensive IR tool and solution. This may also be the beginning of turning IR into a competitive advantage. The particular and peculiar aspects of IR metrics can and should be researched and studied further to fully understand the sources of complexity with regard to IR metrics and how to best deal with it. Also, within the context of IR and IR metrics, technology can (1) improve the comprehensiveness of IR metrics and the answers provided by entrepreneurs (2) guide entrepreneurs as users and (3) provide references, examples and feedback. IR metrics should be considered and regarded against their accompanying and corresponding accuracy and success rates, also when considering the use of technology to further improve the IR metrics, and when considering subsequent and successive IR assessment. IR metrics or IR metric systems (a combination and integration of IR metrics, technology, and professional assistance) can further secured through moderation.

The industry can also consider working towards an industry-accepted IR standard. With regard to IR, both the perspective of VC's and the perspective of entrepreneurs are important. It is emphasized that entrepreneurs should consider the perspective of VC's and what VC's consider. At the same time, it would be worthwhile and valuable to study entrepreneurs as users and customers of IR.

Moderation and accreditation can also further support and improve IR and would involve moderation and accreditation of IR services, and IR metrics or tools. In this regard, it is also questioned whether a (VC) governing body should not equally reside over and look after IR matters.

Awareness is an important aspect of IR and equally involves and accompanies a culture aspect. In this regard, the prominence and reputation-and thus reach or pervasiveness-of entrepreneurship support services and centers are important, as it determines and provides a contact point with entrepreneurs, and the extent, depth and reach thereof.

There is room for greater specialization within the VC market and with regard to IR. Increasing interaction between stakeholders and market participants is also a way to improve IR.

Scope for Future Research: Future research can further consider the following:

• IR, IR Metrics, Technology and Professional Assistance: The objective and subjective aspects of IR and IR metrics should be clearly delineated. The accuracy and success rates of IR metrics must be further studied. This particular aspect can be further extended by considering the impact of feedback on the accuracy and success rates of IR metrics through subsequent IR assessments. Attention can also be paid to how technology can improve IR metrics and their accuracy and success rates with emphasis on comprehensiveness, guidance and feedback. Furthermore, the integration of professional assistance with IR metrics and technology can be further researched.
• The Quality of IR-Related services: Aspects to cover would include the resident experience within IR support services, the quality already prevalent in existing IR support services, factors of and impacting the quality of IR support services and how quality of IR support services can be further improved.
• IR, Awareness and Culture: Both awareness and culture impact IR and awareness is also an outcome and consequence of culture. Here, culture can simply be narrowly viewed as general entrepreneurship practice. Of interest here is how awareness is and can be created. Awareness also pertains to a prominent entrepreneurship reference, or a similar network or platform, as a source of assistance, support and guidance. Perceptions in the context of awareness are relevant. The credibility, acceptance, and popularity (renown, regard, recognition, acclaim, prestige, and reputation) of such a support center or network would equally impact awareness of IR.
• IR and the Perspective of Entrepreneurs: How entrepreneurs see IR, IR requirements, IR assessments, IR assistance, and what entrepreneurs typically struggle with, with regard to the above. In essence, focusing on the entrepreneur as a customer to improve the quality of IR services.
• IR and the Perspective of VC's: When considering the importance of the perspective of VC's, what constitutes a good opportunity?
• IR, the Quality of Opportunities, and UVP: Within the context of IR, considering the quality of opportunities and UVP, and how these can be improved.
• IR and Assistance: Conducting a thorough cost-benefit analysis of providing IR assistance. This includes considering the number of entrepreneurs, the type of support to offer, the method and medium, the benefits accruable and the estimated cost. It also essentially entails the seriousness (or relative motivation) of entrepreneurs.
• The development of an industry-recognized IR standard.
• IR, Accreditation and Moderation: Accreditation and moderation within the context of IR involve the accreditation and moderation of (1) (the quality of) IR services and (2) IR metrics.
• IR and Competitive Advantage: From a strategic perspective, turning IR into a competitive advantage and building competitive advantage around IR.
• The Relevance and Adequacy of IR Content: In short, the anomaly is that IR content and services are abundant, yet IR can be described as lacking.
• IR and Governance: The relative need for a (VC) governing body to oversee IR.
• IR and Education: How best to impact IR through education.

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