Finding a co-founder is one of those things that can happen in an instant or it can take months of fruitless searching. While a lot of it depends on an entrepreneur’s networks and specific requirements, it seems there is also an element of luck involved, and not everyone is fortunate enough to find their co-founder in a chance meeting. Indeed, some entrepreneurs go to great lengths to find the perfect co-founder. Melbourne-based entrepreneur Marc Harrison offered a $2,000 bounty during his hunt for tech co-founders, while Sydneysider Ryan Wardell set up Cofounder Speed Date following his own struggle to find a sidekick. Even start-up powerhouses like Pollenizer have been known to put the feelers out for co-founders. Earlier this week, Pollenizer said it was seeking co-founders for four of its start-ups. And these start-ups aren’t duds either. One would involve a partnership with a Skype co-founder while the other would involve working with the former chief executive of CareerOne. It’s also worth noting an increasing number of accelerators have specific requirements regarding co-founders. In January, StartupSmart spoke to Australian start-up 7write.com about its struggle to find a third co-founder after being selected as a finalist for Startupbootcamp Amsterdam. On its website, Startupbootcamp Amsterdam says it prefers teams with three or more founders. “You can apply with two founders but to really accelerate your start-up we prefer a strong team of three people,” it says. Closer to home, Melbourne-based start-up accelerator AngelCube recently announced it won’t be taking on sole founders in future rounds. “I think we’ve learnt some lessons from the last round,” AngelCube co-founder Adrian Stone told StartupSmart in April. “We had too many sole founders and quickly realised being a sole founder is too much of a big task… [in a three-month program]. “[We realised] our program is not going to happen for a sole founder. We’re looking much more at teams. “I think what we’ve learnt is one founder is too few and four is too many. The jury’s out on whether two or three is right.” This means more start-ups are scrambling to find good talent, and find it fast. One entrepreneur facing this predicament is Tablo Publishing founder Ash Davies, who was named Best Young Entrepreneur at the 2013 StartupSmart Awards in March. Tablo Publishing helps authors publish their work from anywhere in the world and reach a global network of iBookstores. Davies, who has been accepted into the AngelCube program, told StartupSmart he is looking for a tech co-founder. “I am now four weeks into [the program] and working very hard and am at the point now where I could go a lot further if I had someone alongside me,” Davies says. “I’m looking for someone with great technical skills who can build applications but also someone with a strong sense of vision. “The biggest thing I’m looking for is someone who is able to learn fast.” Davies admits it is a tough process. “It’s like dating. You’ve got to match the personality as much as the skills,” he says. So how does one find a co-founder? StartupSmart spoke to Pollenizer co-founder Mick Liubinskas to determine what’s involved. Show your face Liubinskas says Australian start-ups don’t have the luxury of waiting for the right person to present themselves, so if you need a co-founder you have to make it happen. “Being in Australia we don’t have what the Valley or Israel have, where you can find lots and lots of co-founders waiting to take the risk,” he says. “The challenge is talented people who won’t take the risk or people who will take the risk but aren’t talented. “You want to find someone who’s so good they could possibly do it by themselves. The thing I encourage people to do is go to as many events as possible.” Conduct a trial “Say to people, ‘Hey, when we have a cup of coffee let’s sketch out one idea’,” Liubinskas says. “Try to work together as quickly as you can but don’t make [the project] so small that people can give it up easily. Be very aware that’s not going to give you [what you need].” Make them an offer “You have to have a clear idea and pitch it very strongly. Be specific about what you do and drive it as much as you can. You also need to put out an attractive offer,” Liubinskas says. “If you’re a non-technical person who’s really trying to get started, you may have to give them more equity. “You also need to make sure any equity is vested and that should apply to you as well. At Pollenizer, everyone’s equity for effort is earned over time.” Do as much as you can beforehand Finding any kind of co-founder is difficult, says Liubinskas, but finding a tech co-founder is particularly tricky because they are in such high demand and therefore receive lots of offers. In this situation, Liubinskas says entrepreneurs should attempt to do as much of the work as they can on their own. “Good entrepreneurs will always find a way and that’s part of the fun,” he says. “There are a lot of platforms where you can do manual testing without building a product. Once you actually start building, everything can actually slow down. “The more progress you can make in building a product, the more attractive it’s going to be for a co-founder and the easier it is for them to know what they need to build.” Take your time While it can be tempting to hire the first person who looks your way, Liubinskas says entrepreneurs must ensure the co-founder they choose is the right one for their start-up. “It’s tough with so much competition around… Do it slowly and carefully rather than doing it recklessly – that’s the main thing,” he says.
Melbourne start-up OneTouch, which offers technology that allows businesses to scan and process documents such as pay slips and tax returns, has kicked off a tour of Silicon Valley for investors and customers after snaring $150,000 in funding. The business secured the cash from Adrian Stone, founder of tech incubator AngelCube, which recently won StartupSmart’s Best Start-up Investor award, and high-profile economist Nicholas Gruen, who has previously backed Aussie start-ups Kaggle and BiNu. Fresh from the funding injection, OneTouch, founded in 2011 by Hany Pham and John Schagen (pictured below), is currently traversing California’s tech scene in the hope of striking further partnerships to help boost the business. OneTouch is in the US as part of the Advance Innovation program, which picked 25 Australian start-ups for the sought-after Silicon Valley tour last month. The business has developed B2B-focused software that automatically reads and captures information from any document, such as pay slips, tax returns and receipts. Pham, who has a team of developers in Melbourne and offshore, tells StartupSmart the idea originates from his background as a mortgage broker, where he had to deal with a large volume of documents. “We wanted to create software that could read and process these documents – it’s now possibly a bigger deal than we first thought,” he says from San Francisco. Above: Hany Pham and John Schagen. “The feedback (in the US) has been that it’s solving a real problem in managing documents. I don’t need to go too much into the problem because people understand it.” “This kind of technology is very popular right now, as is enterprise software.” Pham says he has put $200,000 of his own money into the business in order to develop and iterate the technology. He has since used his connections to strike a deal with Connective, the second largest mortgage aggregator in Australia, which linked OneTouch to more than 1600 brokers. “We’ll look to target any industry that involves a lot of documents – it’s still early days,” he says. “We’re toying with a subscription model and a cost-per-page model. It will depend on the feedback.” Pham says the strength of his personal relationships with Stone and Gruen opened the doorway to the $150,000 investment. “Adrian is very free and willing to help start-ups and after we had evidence of traction, which was people interested in it, he agreed to back us,” he says. “Nick expressed an interest right away. I didn’t show him a PowerPoint slide – I guess he’s mainly investing in me and John.” “With B2B enterprise software, there’s a clear revenue model – it’s not like launching a rocket and hoping for the best.” “It’s clear who our customer is and we demonstrated to Nick that we are the right guys to back. I’ve got a strong sales background and John has a strong software background.” “We’ve got a reasonable runway with capital now. I will probably want to raise a series A here in Silicon Valley, but it’s more important to build networks for customers. We want to build a tailored model for the US market.”
Melbourne-based start-up accelerator AngelCube has made several small changes to its program, including distancing itself from start-ups with sole founders, after opening applications for 2013. AngelCube, named Best Start-up Investor at the 2013 StartupSmart Awards, offers seed capital, mentorship, connections and opportunities to web start-ups. Applications for the 2013 program will close next week on April 12. Once applications have closed, 20 finalists will be chosen to pitch to a selection panel of high-profile tech players. From those 20, AngelCube will select eight start-ups to participate. The program is completed over a three-month period, after which the start-ups head to the United States to pitch to a roomful of investors. There are a number of noteworthy start-ups in the AngelCube fold, including Kickfolio, which raised $100,000 from US investors before being accepted into US-based accelerator 500 Startups. Kickfolio is now closing a Series A funding round. Other AngelCube success stories include LIFX, Broccol-e-games and shopping recommendation engine Giveable, which has raised $150,000. According to AngelCube co-founder Adrian Stone, about half of AngelCube’s graduate companies go on to raise follow-on funding from Australian and overseas investors within six months of completing the program. Successful applicants for this year’s program will receive $20,000 in seed funding, six months of free desk space and access to a group of more than 50 mentors. Mentors include RetailMeNot founders Guy King and Bevan Clark, Pollenizer co-founder Mick Luibinskas and Nic Hodges of MediaComm. Stone told StartupSmart AngelCube will be doing a few things differently this year. “I think we’ve learnt some lessons from the last round,” Stone says. “We had too many sole founders and quickly realised being a sole founder is too much of a big task… [in a three-month program],” he says. “[We realised] our program is not going to happen for a sole founder. We’re looking much more at teams. “I think what we’ve learnt is one founder is too few and four is too many. The jury’s out on whether two or three is right.” Stone also admits the net needs to be cast a little wider this year. “A lot of the ideas were probably too small [last year]. They focused on a niche market in Australia only. If you have a niche market and your market is Australia, that’s not what we’d call a scalable start-up,” he says. “So we’re looking for big ideas.” Stone is quick to point out the program won’t be easy. “Anyone would love somebody to hold their hand. We’ve realised that is probably counterproductive,” he says. “It’s not our job to build these companies. It’s their job to prove they’re entrepreneurs, and we produce a great environment to help them bloom and succeed. “There’ll be fewer sessions in the weeks. [Last year,] we had too many people in and out, talking to our start-ups and distracting them from the game of building their business. “The second thing is, our start-ups started pitching their ideas too early. “This year, we want them to focus on ensuring they have product-market fit by talking to customers and then start pitching to investors.”
The co-founder of Melbourne-based incubator AngelCube says he makes a conscious effort to recruit female mentors, but believes more can be done to entice women into the industry.
Melbourne Population: 4.07 million Start-up survival rate: 74.3% (2007 to 2009)
AngelCube co-founder Andrew Birt says he’s impressed by the quality of applicants for the incubator’s next start-up round, saying it reflects Melbourne’s maturing start-up ecosystem.
AngelCube, the Melbourne-based incubator, will open applications for its second round of start-ups tomorrow, increasing its intake to eight teams, with a special interest in marketplace concepts and software-as-a-service.
Pollenizer-backed start-up Pygg has raised $600,000 in six months from a host of investors, including Yahoo!7 chief Rohan Lund and Tim Howard of Seven Network’s Vividwireless.
Tech start-ups need to build up their brand and achieve market traction before they can secure funding, according to the co-founder of Melbourne-based tech incubator Angel Cube.
Serial entrepreneur Andrew Birt is looking for Melbourne-based start-ups to become the first group of participants for his latest venture AngelCube, an early stage incubator for web-based businesses.