Here is a picture of a South African investor: say your company turns over R2 million per year (in my mind then you are a micro industry, however you are now one step beyond seed financing, and probably in the realm of angel investors.)

In all likelihood you have generated cash by remorgaging your home. If you are stupid enough to go to your bank for a loan of say R500 000 to grow your business they will want
(1) the rest of your house as surety - that be the home of your spouse and kids
(2) require plus 50% of equity
(3) require that you work really hard at your tech plus doing the marketing, sales, productisation, etc
(4) make your own market and contacts
(5) earn a derisory amount of money they call salary.

The problem is that they only care about collateral - potential future earnings is not them. OK, so you don't do that.

You then try and find a South African investor or Angel. (There seem to be a lot of them now.) However, they do a permutation of the above, which looks like so
(1) 500 000 / 2 000 000 => 25% stake in the company
(2) they want to put someone on the board to erm, help you
(3) that person has no-idea about the markets that really interest you (ie US and EU)

The problem here is that investors factor the price / earnings ratio to be the same as risk. Quite frankly, what alternative do they have? (Here is advice to accountants aka investors in South Africa. You really do not want engineers working for you. They really do know what they are doing. What is needed is a vehicle in which they can get rewarded for doing their thing, and you get a return. Managing programmers is hard.)

As for universities in this country - they seem to get you to assign all IP to them before you even enter their hallowed halls. (That reminds me, most South African companies own the IP related to their trade as soon as you sign on. Not only that, they own all future IP too, even after you resign. Yes, they have to prove that you generated the IP while employed by them - they do not want you to have a good idea while employed, then resign - but they can keep you tied up in court for years.) US universities make a great deal of money from the benevolence of their graduates - this is surely not the case in South Africa, where people would want to get as far away from the grasping hands of their dons. But besides that, universities then outsource their 'commercialisation' to our tame VC crowd.

I have no idea how they do it overseas. But it can be done. The irony is that 25% of startups in Silicon Valley are originated by Indian, Brazilians or South Africans!

What do I suggest: never, ever, ever, ever, ever give over your company to anyone else. It may be sukkeling, but at least it is yours.

Whatever the case, the machine needs to be built to increase the price / earnings ratio above risk. This assumption assumes that companies offer more than just a body-shop type service and develop a product or in South Africa's case, a brand and loyal client base. That can only be done, in my view, through an incubator type approach. But a lot more than just provisioning an office block and calling that an incubator is required.

To treat high tech in this trivial way to to doom South Africa. However it is really difficult to make a $100 000 gamble as Andy von Bechtolsheim did with Google, is really hard when that will pay for your pension; or 100 houses. (Sergei Brin and von Bechtolsheim being of foreign origin.)