Pitcher Partners


Startups and VCs welcome budget measures but concerned about government’s “overall strategy” for startups

5:45AM | Wednesday, 13 May

Startups and venture capitalists have welcomed the Abbott government’s push to reform employee share schemes and implement a crowdfunding equity scheme, but are worried the federal budget lumps startups and small businesses under the same banner.   John Dyson, founder and investment principal at Starfish Ventures, told StartupSmart it was good to hear Joe Hockey mention startups in his budget speech. However, he is concerned that government has once again assumed startups are similar to small business.   “I think there is definitely a disconnect between small business and the types of innovative companies we support – there’s no question about that,” he says.   “The government does put them in the same basket in my mind. But they have different needs and hot buttons and priorities. You’re doing an absolute disservice to both sectors if you try to treat them the same, because what will stimulate one sector won’t stimulate the other.”   Dyson says the changes to the employee share schemes and introducing a crowdsourced equity funding scheme will support the startup ecosystem, but more detail needs to come to light before startups will know how it will benefit them exactly.   “Until you see the details it’s hard to understand what type of impact or benefit it’s going to have on the innovation ecosystem,” he says.   “We’ve got a situation at the moment where there’s lots of money for early stage opportunities and there’s also angel-investing incubators and accelerators. The biggest gap in the market at the moment is companies that want to raise two to ten million dollars and I’m not convinced equity crowdfunding is going to fill that gap. Starting the company is the easy part – the hard part is making those companies grow and making them globally relevant.”   However, Scott Treatt, a partner at accounting and business advisory firm Pitcher Partners, told StartupSmart in general startups would “not be unhappy” with the budget and points to a range of positive measures the government is introducing.   “Startups are predominately cash-strapped at times, so many of the measures that are coming in for small business – such as the reduction in tax rates – don’t always provide immediate benefits,” he says.   “But the key benefit I see for startups is the push to get the employee share scheme options. It’s absolutely critical for startups to be able to retain and attract key talent to facilitate the development of new technologies.”     The Abbott government’s budget was not all good news for startups, with a $27 million cut to the Entrepreneurs Infrastructure Program over five years.   Treatt says while the government is working in a frugal budgetary environment, all governments – no matter which party is in power – need to do more to instil confidence in the greater economy by investing in innovation and education. “I think it will be next year when we start to see more policy and direction coming from both sides of government as we move closer to the election,” he says.   “That’s what’s going to give business a whole lot of confidence to facilitate large businesses being able to invest in smaller businesses and invest in other skills to get the economy moving.”   StartupAus – the peak body for Australian startups – agrees. While board member Professor Jana Matthews says the government is beginning to recognise tech companies are the future of the Australian economy, she argues that an “overall strategy” is missing.   “We need to give people the skills and knowledge they need, both in science, technology, engineering and maths so that they can build tech startups, and also entrepreneurship so they can turn those startups into high-growth businesses that will create jobs,” she says.   “Beyond skills, we need government leadership and tangible support for tech entrepreneurs and investors to drive the startup ecosystem.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Meet the Aussie startup hoping to Prezentt the future of slideshows

8:40AM | Tuesday, 5 August

Perth-based startup Prezentt has launched its cloud-based slideshow service which it hopes will complement, rather than compete with, existing presentation apps such as Microsoft PowerPoint, Google Slides or Apple Keynote.   Co-founder Jeff Robson told StartupSmart the new service is designed to work in a web browser.   “Before a presentation, [the presenter] uploads a PDF of their slideshow,” Robson says.   “Then, during the event, while the presenter shows off their PowerPoint presentation, the attendees can view the slides on their own smartphone or tablet, take notes on their mobile device, or request a contact. In the future, you will also be able to share your presentation on social media.”   Because it works in a web browser, Robson also says that aside from Apple or Android smartphones and tablets, Prezentt will also work on a range of other platforms, including BlackBerry and Windows Phone.   According to Robson, a number of high-profile customers having already signed up to use the product, including News Corp, RSM Bird Cameron, SaaSu, Access Analytic and Pitcher Partners.   “We have about 200 people signed up from a range of different industries – big businesses, small businesses, consultants who present, and even charities. There’s directors who use it for meetings and presentations,” Robson says.   “At our launch event, we had a number of people from local universities, so tertiary education is an obvious market. But there’s no reason it couldn’t be used in high schools or even schools at more junior level.”     In terms of monetisation, the cloud-based service uses a subscription-based model rather than advertising.   Robson justifies the strategy, saying if it manages to land a presenter one extra sale per year, the subscription price pays for itself.   “There’s nothing worse than having your slides with your competitors’ ads on your slides,” he says.   “So it’s subscription-based, where it’s free for the attendees, presenters get their first four presentations free per year… But if you want to do more than that, the subscription is $20 per month if you pay annually.”   The service has already won critical acclaim, taking out the development domain prize at Western Australia’s premier Information Technology awards event, the WAiTTA Awards. Prezentt will now represent WA at the National ICT iAwards in Melbourne later this month.   Looking ahead, Robson says slideshows are a market ripe for disruption over the coming years.   “We see this as the future of presentation – a little like mobile banking. Seven years ago, no-one did mobile banking. Now, if you went into a bank branch and told you they don’t have an iPhone or Android app, you’d think they were a little backward, he says.   “We think it will be the same thing with presentations.”

State-by-state tax review reveals Queensland and South Australia as the best places to start-up

11:16AM | Thursday, 28 November

While Sydney and Melbourne are frequently mentioned as Australia’s start-up hotspots, a new report into state-based business taxes has revealed South Australia and Queensland are the cheapest states to launch a company in.   The state-by-state tax review of Australia released by accounting, auditing and investment group Pitcher Partners looks at what taxes two hypothetical start-ups would pay in each state.   Paul Glover, a partner at Pitcher Partners, told StartupSmart the reason these two states had performed well was due to lower property costs and the state governments being more proactive in updating their tax regimes to encourage small business.   “We decided to take into account the relative property values because if you don’t do that it does leave out a serious factor that would influence where you might start up,” Glover says. “Also their taxes are more attractive because they’ve done more to make it so for business.”   For the smaller start-up with an annual payroll of $1,178,427, Queensland had the lowest payroll tax, followed by New South Wales, Western Australia, South Australia and Victoria.   For the larger start-up, with an annual payroll of $5,834,950, Victoria had the lowest payroll tax, followed by Queensland, New South Wales, Western Australia and South Australia.   New South Wales and Western Australia were the most expensive states to launch a company in, largely due to high property prices.   “New South Wales and Western Australia need to focus a bit more on their state tax systems because there is a risk they could lose out when start-ups and other established businesses become more mobile and able to move. They shouldn’t sit back and relax because they’re the leaders at the moment for business,” Glover says.   The report found the states were fairly similar when it came to the costs for larger start-ups, excluding NSW, which was significantly more expensive.   “There has been a very large stamp duty recovery in NSW due to the hot property market, and this gives them the opportunity to invest that revenue into reforming their tax system to make the state more efficient,” Glover says.   You can download the full report here.

Three top tips on building an investment-ready start-up

8:14PM | Sunday, 4 August

Start-ups need to know where they’re headed and make sure they set up right to attract investors, says Cole Wilkinson, a director of accounting, auditing and investment group Pitcher Partners.   Pitcher Partners is hosting its annual Questions on Capital event on the Brisbane venture capital scene. Wilkinson spoke to StartupSmart about his top three tips for early stage start-ups seeking capital.   Get your structure right from the start   Investors prefer to work with properly structured start-ups, according to Wilkinson.   “It’s fairly common for people who are working away on ideas to set up a partnership or a trust, but those entities aren’t really suitable to take on investments because of Australian and American law,” Wilkinson says, adding investors want special rights to protect themselves and start-ups need to enable that. “A company is structured in a way that can be divided easily and invested in.”   Getting advice on structure options early is worthwhile, says Wilkinson.   “We see people can get into trouble when they’ve offered shares to family and friends to raise their first investments,” Wilkinson says. “It might not turn away investment, but an investor now has to deal with not just one or two founders. They’re dealing with lots of shareholders and that’s a lot of work for the investor.”   Understand different types of start-ups need different patterns of investment   With more and more Australian start-ups seeking and achieving funding, it pays to research what similar groups have successfully sought, says Wilkinson.   “Know where your company is going. You may not need full-on investment – friends and family may be enough – while some start-ups will require that institutional or corporate investment,” Wilkinson says.   He says creating a business plan can help you work out if you need funding, and what type.   “Teams building apps or software might need money to build the app and a small sales team, but they can start generating profit from their first few customers, so they might be able to self-fund their way through with a slower growth path of relational selling.”   Groups that are developing networks, marketplaces or platforms are most likely to require funding.   “For those building a product or platform, know that it may not generate revenue for some time. Revenue will come once they’ve built a base of millions of customers who may never pay. These start-ups will rely on institutional money to fund their development through that expensive growth phase,” Wilkinson says.   Know what investors look for in early stage start-ups   According to Wilkinson, start-ups who can demonstrate exactly why they need the funds and the impact it will have on their growth are more likely to be successful.   “You need to know how you’re going to bring your great idea to market, who your customers are, how much it’ll cost to get there and what kind of back office you need,” Wilkinson says, adding it helps to put some numbers around that.   Start-ups also need to communicate clearly who their customers are.   “It’s not enough to have a great product. Show us who needs or wants it, and tell us why people will buy it,” Wilkinson says. “Those looking for institutional money need to validate there is real demand and take up via a soft launch or similar.”   Wilkinson adds it’s worth tailoring your presentation to each investor’s background.   “It may not bother everyone, but personally I like to see a real demonstration of how the product is working. If you’re talking to an investor with a background in your area, you may not need to do this. But I’m from finance and may not understand every piece of technology, so I want to see how it works,” Wilkinson says.   “There are a lot of investors out there who may have a strong background in say telecommunications rather than social media, but they’ll want to invest if they know how it works,” Wilkinson says.   For new start-ups with inexperienced teams, Wilkinson says you can boost your chances by recognising your skills and knowledge gaps and bringing advisors on board to show your team has all its bases covered.

River City Labs founder backs new Brisbane games accelerator

3:09AM | Friday, 15 March

A new mobile games accelerator has launched in Brisbane and is now open for applications, with successful teams set to receive up to $50,000 each in addition to office space and mentorship.

Five ways SMEs will be affected by Wayne Swan’s budget cuts

3:36AM | Tuesday, 12 March

Small businesses are bracing themselves for a hit following the release of Treasurer Wayne Swan’s Mid-Year Economic and Fiscal Outlook, which has downgraded the 2012-13 projected surplus to $1.1 billion.

$50,000 tech start-up Invention Test competition opens for entries

7:27PM | Sunday, 8 July

Tech start-ups are being offered a prize pot of $50,000 in this year’s IT Invention Test competition, the Geelong-based initiative that has opened up for applications for its 2012 round.

Meet the StartupSmart Awards class of 2012

3:03PM | Tuesday, 27 March

They’re young, they’re smart and they’re off to a flying start.

Queensland most tax-effective state for SMEs: Report

9:56PM | Sunday, 11 September

Queensland remains the most attractive state for SMEs when it comes to state taxes, a study by Pitcher Partners has found, as a major bank tips the resources states of Queensland and Western Australia will outperform next year.