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New venture capital firm launches to fill gap between incubators and big investors

Thursday, 20 June 2013 | By Rose Powell

A new venture capital firm is looking to develop six to eight ideas with funding of around $500,000 each and training.


Ilya Frolov, the general manager of Oxygen Ventures, told StartupSmart it hoped to fill a gap in the Australian venture capital landscape.


“We’re seeing two extremities in the venture capital space. Either the pure funding model like the hands-off Silicon Valley approach where they invest and cross their fingers, or the incubator model, the `here’s some money and sit with us and we’ll see how you go’. But there is limited growth after that without funding,” says Frolov.


Oxygen Ventures says in a statement that, unlike traditional venture capital firms, it aimed to support business ideas from the point of conception and onwards.


Frolov says its approach is needed in the start-up space, adding it also mitigated risk through ongoing consultation and feedback.


The firm is the investment vehicle of Larry Kestelman (pictured above), the former owner of internet service provider Dodo Australia.


Oxygen Ventures is also looking to inspire a new wave of entrepreneurs by posting the opportunity on jobs boards such as SEEK to reach people who have great ideas but aren’t part of the start-up community yet.


“We want to trigger people to take that next step,” Frolov says.


“We’ve got a team of 20 here, and we’re ready to help entrepreneurs develop their teams and launch their ideas.”


The team at Oxygen Ventures are looking for business ideas that are digital, globally scalable and disruptive.


“We’re going to be quite picky. It needs to be competitive, rather than niche. The idea or process that’s patentable is very attractive,” Frolov says.


The equity stake Oxygen Ventures will have in the company will be between 40% and 75%. It will vary on how developed the start-up is and how significant a role the Oxygen Ventures team play in developing the idea and company.


Frolov says an idea that’s disruptive and has a strong market will be attractive, while case studies and research would help, along with someone with domain expertise who can show a market and launch strategy and demonstrate demand.