Domenic Carosa’s Future Capital Development Fund has invested in two online start-ups – a memorial site for people and pets and an event registration and ticketing platform.
Imorial.com, which allows users to create free online memorials, has been operating for more than two years and operates on both a business-to-customer model and a business-to-business model.
The company describes itself as “so much more than a simple death notice… It is here that you can create for free an everlasting tribute, a memory, of someone special you have loved and lost.”
The other start-up FCDF has invested in is EventArc.com, a self-service online event registration and ticketing platform, which has generated more than $4 million in transactions since launching late last year.
FDCF invests in young but established internet companies, which have already established a substantial customer base and are revenue-generating.
FCDF founder Carosa says he chooses to invest in businesses that have been operating for at least a year, with existing revenue and customers, because they’re a “less risky proposition” due to their proven track record.
“We look for businesses that are basically disruptive, so businesses that challenge an existing income or marketplace,” he says.
Carosa says he selected Imorial.com because it works within an existing market but operates on the internet, thereby challenging the more traditional channels for memorials such as newspapers.
“I also like businesses in which a major component of their revenue is derived from transactions, not just advertising, because these businesses often have a much stronger business case than those that are purely advertised-focused,” he says.
“With regard to EventArc.com, it very much caters to the long-tail in the event management and ticketing space. Many companies and organisations are still using Excel spreadsheets to manage their events but EventArc.com simplifies that entire process [by allowing users to manage their own events].”
EventArc.com’s high profile customers include John Howard and Kevin Rudd, both of whom have used the site to run, manage and ticket their events.
Carosa says start-ups looking to attract funding in any form must ensure they don’t overpromise in their proposition.
“Be realistic about your expectations. Start-ups are typically run by enthusiastic entrepreneurs who, by their very nature, are very optimistic individuals,” he says.
Corosa says overly optimistic entrepreneurs often develop business plans with “hockey stick projections” to impress potential investors, but these projections are often viewed as unrealistic.
Hockey stick projections refer to the graph of a start-up’s projected revenue growth line, which is typically flat for a short period and then rises sharply, taking on the appearance of a hockey stick.