The federal government’s changes to the taxation of employee share schemes are not “founder friendly” despite being overall a step in the right direction, according to an Australian entrepreneur who has been consulting with policymakers. Rebekah Campbell, founder of Posse, told StartupSmart the government – and Small Business Minister Bruce Billson in particular – have been “great” when it comes to hearing what startups need. “They really listened,” she says. “I think they have gone a long way to addressing the problems, but there are still a couple of big things from the startup side of things.” However, Campbell says the exposure draft, which was released in January this year, needed to take another look at the 10% limit on shareholding provision. “The current way the revised employee share plan is structured, if you own more than 10% you can’t defer the tax on those options,” she says. “So it’s the biggest problem with the legislation – it is not founder friendly but employer friendly.” Campbell says 10% is “such a small amount” and most founders will not feel like founders any more if they own that much of the company. Instead, they will feel like employees. Reuben Bramanathan, senior lawyer at Adroit Lawyers, told StartupSmart although the draft legislation is good news in general for startups, there are “some gaps” which could cause problems. “The 10% limit could be a problem for startups who have already raised funding at a valuation, and later need to bring on a new co-founder or want to increase equity incentives for the original founders,” he says. “Any shares or options issued to someone who holds 10% or more of the company will be taxed up front. That 10% limit includes shares and un-exercised options.” Bramanathan also points out that at this stage the proposed changes will not apply to foreign companies which employ Australians. In addition, employees will still need to pay tax on any shares or options they want to keep when their employment with the company ends. “There has been a strong response from the startup sector to address these gaps,” he says. “The new legislation really needs to address these things to give Australian startups a level playing field to attract and retain quality employees.” The government hopes to push through its employee share scheme reforms by July this year. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
International Women’s Day is this Sunday – a perfect opportunity to recognise the contributions women make to the Australian startup ecosystem. However, like other industries, gender representation is far from perfect. In 2012, only 4.3% of Australian startup founders were women. There is also evidence to suggest men are more likely to receive venture capital than women – even when the content of their pitches are the same. Rebekah Campbell, the founder and chief executive of online shopping network Posse, told StartupSmart she thinks there needs to be more female investors because you can’t “fix one side of the ecosystem without fixing the other”. “The biggest roadblock [for female founders] is the lack of female investors,” she says. “We have 102 shareholders and there is not one female investor in the group. Women also aren’t investing in companies – in my last capital round we did probably 50 meetings and out of every meeting we did, there was only one woman and she was a junior note-taker.” Campbell launched Posse in 2012 and last year snapped up $1.5 million in funding in order to accelerate growth as well as the platform’s marketing efforts. “Obviously I’ve done pretty well with raising money, so it’s not like I can complain,” Campbell says. “But I definitely think [being a woman] has made it more lonely. Encouraging women to get interested in early stage companies will make a big difference. Scale – the angel investor group – is a great initiative.” The federal government’s decision to wind back the gender reporting laws for companies of more than 100 employees isn’t a step in the right direction either, according to Campbell. “I think it’s important we report those numbers to get a sense of what’s going on and so companies take it as a serious issue,” she says. “And education… it’s a lot to do with education and how girls are taught to think of themselves as they grow up.” Dr Elaine Stead, investment director for Blue Sky Venture Capital, told StartupSmart female founders face similar issues to men – access to the right skills, guidance and access to growth capital. “I think the biggest challenges that female founders face are the same ones that male founders face, they just get asked the question a lot more,” she says. “I think some sectors just attract a different gender profile. And what we need to make sure we’re doing in this industry is making sure we remove all the barriers to equal opportunity while at the same time not creating artificial protections or advantages.” Stead says it’s important to also highlight the women in the industry – both founders and investors – who are doing well. “There’s definitely women in that ecosystem who are absolutely doing all the right things and not necessarily letting a perceived disadvantage impact their ability to be successful.” Here are StartupSmart’s top five female-led Australian startups to watch in 2015: 1. Canva 2. Oneshift 3. Posse 4. CloudPeeps 5. Stashd Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Stone and Chalk, a new fintech hub that promises to help accelerate the development of Australian fintech startups, was unveiled in Sydney on Tuesday. The independent not-for-profit will be located on level 26, 45 Clarence Street in the Sydney business district. It will include 1230 square metres of office space with the potential to grow to 3000 square metres. Stone and Chalk’s co-working space will open in May and can fit up to 150 entrepreneurs, as well as offering space for seminars, industry meetings and conferences. Corporates will also be able to rent space in order to collaborate with the startups working there. New South Wales Premier Mike Baird, who spoke at the hub’s launch yesterday, says it will encourage innovation and creativity in fintech. “Stone and Chalk will provide fintech startups with subsidised office space to collaborate, network and investigate venture capital opportunities,” he says. “The fast-growing fintech sector will further strengthen Sydney’s position as Australia’s business capital and a globally recognised and competitive finance sector.” Stone and Chalk chair Craig Dunn says the hub will become the heart of fintech in Australia and hopefully Asia. “Digital disruption is transforming the financial services industry and there is much to be gained through greater collaboration between stakeholders in the fintech ecosystem. We are focused on brining to life our vision for Sydney’s fintech hub to support startups compete, thrive and lead on a world stage.” Toby Heap, managing director of the AWI Ventures fintech accelerator program, says the new hub will provide a physical focus for the growing fintech ecosystem. “Our aim is to provide an ecosystem of advice and support that empowers the brightest up and coming financial services executives to leave their often comfortable nests and start a new generation of world leading financial services organisations.” The hub was made possible due to professional and financial contributions worth more than $2 million from Allens, Amazon, American Express, AMP, Capital Markets CRC, CIFR, FINSIA, Finzosft, HSBC, IAG, Intel, KPMG, Macquarie Group, Oracle, Suncorp Bank, Veda, Westpac and Woolworths. Co-founder and chief operating officer of Pocketbook, Bosco Tan, praised the commitment shown by the government and private organisations in coming to “collaborate and elevate innovation”. “Being surrounded and supported by the who’s who of the sector is a critical step to shortening the process of ideation and execution,” he says. Posse co-founder Rebekah Campbell says the there’s a huge opportunity for innovation in financial services. “The fintech hub is a great initiative to drive focus and collaboration in the sector. I’m sure we’ll see some giant disrupters emerge as a result in years to come,” she says. Fintech start-ups that would like to express interest in moving to Stone and Chalk, visit stoneandchalk.com.au for more information. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Traditional mining investors are looking to invest in technology, according to entrepreneur Rebekah Campbell, who is raising $1.5 million in new funding to grow her media website Posse. It’s Campbell’s second public raise for the new incarnation of the site, which started out as a music-focused venture and recently pivoted to a retail focus. Her first raise in 2012 saw little interest from Australian venture capital so she turned to investment in Silicon Valley, raising $1.2 million from investors, including Bill Tai. Her second raise was an internal one of $1 million. This third time round she’s noticing huge changes in the local scene as they seek to take on more outside investors. “We haven’t been dealing with brand name VCs, most of the interest is coming from people who traditionally invested in mining,” Campbell says. She says the timing was perfect for others looking for smaller raises and the interest in startups was sparked by a combination of high profile successes like Atlassian and Freelancer, coupled with a downturn in the mining industry. While the news doesn’t solve the issues of bigger investment funding, startups have long hoped to tap into some of Australia’s mining wealth and have it reinvested it in local innovation. Campbell believes the timing is perfect for startups to be able to make this a reality. She says there are benefits to local funding over US funding too, including the speed at which you can close a round. The latest Posse round, though still in its early stages, looks to be much quicker than previous rounds. “Funding can take a lot of time and energy,” Campbell said. “It’s still early days but we have great momentum and a lot of interest.” Posse launched in March 2013 aimed as service that connects consumers and shops through a social network. It’s particularly targeted at the female market, which Campbell found were not using popular networks like Foursquare despite having a need for it. The site has 43,000 shops on its platform where users recommend their favourite places. They also get recommendations from friends and can be rewarded by retailers for their loyalty. Site users are mostly from Australia, but Campbell is hoping to target New Zealand, Singapore and Hong Kong with her next raise. Campbell declined to say what valuation they were raising at.
One of the most common pieces of advice for people setting out on the road to starting their own business is how important it is to find a mentor. Most founders and small business people can’t stress enough how valuable it was for them to have someone they could bounce ideas off and who could help clarify their thinking. At StartupSmart we’ve got some of Australia’s top mentors who offered compelling advice on a range of topics. Here we’ve collected some of the most popular that resonated with readers in 2013. Setting up a sales commission structure How to set up a sales commission structure for a business was one of the most popular posts of the year from mentor Vicki Crowe. But she explained that a key question to clarify is whether it’s a commission structure you actually want or a bonus scheme. “A commission structure usually applies when you are offering someone a piece of the action. For example: X % of the gross revenue or an amount for selling X amount of product(s). A bonus scheme, however, is based on meeting fixed monthly and/or annual targets,” she writes. She goes on to outline how she structured her own sales commission structure. Why LinkedIn is hot LinkedIn has become more than an online resume and Rolodex, writes social media expert Adam Franklin. In this post he sets out six reasons why it’s the best social media platform for start-ups. He notes it’s becoming the “go-to” place for business news and is a content sharing platform that can get your articles in front of your entire contact base. Using LinkedIn like a pro LinkedIn topics were favourites for readers, and this one, again from Adam Franklin, about how to use it effectively, was also popular. Here he guides LinkedIn novices through the basics of connecting with other professionals, through to building a profile and getting proactive. Follow his advice and soon you’ll be able to apply the platform to helping others and yourself. Pitching to new customers There are many things to get your head around when you’re running a new business, from branding to stock control, writes Michelle Bowden. “But a key skill you need to become brilliant at, and quickly, is pitching for business,” she says. “If you can fast-track your ability to bring new customers in the door and keep them as loyal clients you’ll be creating very strong foundations for your start-up business.” In this post she explains her seven secrets to pitching to new clients, from building relationships to making sure you make a good first impression. What’s the worst thing you can do in business – and life? For Rebekah Campbell, never ever telling a lie was one of the best bits of advice she’s been given and that she can offer. Something so simple and yet so powerful. “I seldom adopt esoteric business philosophies but its impact has been such that I believe this powerful secret should be talked about,” she writes. “Truth and its relationship to creativity, peace and ultimately success have played on my mind in the past couple of months. If you've read this post and thought, "that doesn't relate to me – I never tell a lie", then you're probably lying to yourself.” Some others worth reading and thinking about: Franz Madlener explored the discussion around calls to change the threshold on when GST should be applied to overseas online purchases and what impact it could have; Scott Robinson offered some advice on dealing with a bad review on social media; and Lauren Ridgway looks at what social media platform might be best for your business.
It’s near impossible to cover everything that’s happening for Australian start-ups, but we’re giving it our best shot. While we’re busy capturing and sharing the Australian start-up community’s news, it’s nothing compared to the long days and sleepless nights that goes into running a start-up. Because you’re busy, we thought we’d start publishing a weekly summary of our daily newsletters so you can see all the news at a glance. Here’s what happened this week. Hot topics: Dynamic equity splits, free apps and crowdfunding We received a lot of emails on our exploration of why Australian start-up founders are exploring dynamic equity splits, and this article on why free apps may be damaging the commercial potential of the $53 billion industry. Crowd funding continues to be a hot topic, with one of our mentors exploring crowd funding firsthand; this start-up founder shares why they turned to Kickstarter rather than searching for an angel investor; and we reveal the top five tips of an ambitious new crowd funding campaign happening right now. We also heard from mentor Greg Ferrett about why the sales spiel is dead, and engagement is the sales strategy that actually works. Three companies announced successful investment rounds Design marketplace DesignCrowd raised $3 million and spoke to us about how their international expansion plans; budgeting app Pocketbook closed a $500,000 seed round and shared who and how they’re planning to hire their first employee; and Loke Digital, a tech company targeting the hospitality industry closed their second seed round, bringing their investment total to $1.1 million. Rapidly growing and now Silicon Valley-based start-up BugCrowd shared their steepest learning curve: getting over their Australian bashfulness and learning how to “speak American” to investors. We also heard from five experts about why Australian investment will continue to grow as Australia learns how to value tech companies better and explored new data that suggests investors are over games and are looking for a different kind of app these days. Founders and leadership So many start-ups fail, but we got advice from a business accelerator about why sheer determination and the ability to think on your feet could save yours; what business owners can do to support their employees with depression and reduce the stigma; and how retailers can ensure their supply chains are ethical. Posse founder Rebekah Campbell shared her tips for creating a start-up culture strong enough to rival Google’s; a project manager at a South Australian University was named Entrepreneurial Educator of the Year and Nina Hendy shared the five experts every sole trader needs to have on speed dial. And, we announced our top 20 entrepreneurs under 25 in our 2013 Future Makers list; found out why this entrepreneur decided to launch her first start-up in her 60s; and discovered why this founder wants more competition. New opportunities, competitions and grants Three major Australian cities will take part in the Global Startup Battle this weekend and Ford Motors has reached out to the Melbourne start-up community to be part of an upcoming hackathon. The chief executive of Bakers Delight shared their top tips for sourcing retail locations; a new franchise is coming to Australia and preparing for our feisty entrepreneurial culture; and new research reveals that only 19% of deals are now done in person. Two governments launched new start-up targeted initiatives with Parramatta City Council is seeking start-ups to re-awaken its CBD by offering $10,000 grants; and the NSW Government has appointed an advisor for creative start-ups. Topics to watch Wikileaks this week revealed Australian copyright may be in trouble, with the Federal Government possibly planning to adopt several problematic parts of the United State’s legislation, and Vanessa Emilio explains what you need to know about the incoming changes to privacy laws. If you’ve passed a major milestone and have news you want to share, please get in touch directly: rpowell at startupsmart dot com dot au You can sign up for our free weekly newsletter here.
While research shows Australian women are among the most entrepreneurial in the world, they continue to be underrepresented in major sectors such as finance and information technology.
Doing business with your spouse or partner can be fraught with danger, especially in a start-up, where emotions run high and cash is scarce. For some, the notion of working with a husband or wife, and spending every minute together building a business, is a desirable scenario. But for others, it can be a highly stressful experience, which is why it’s important to know what you’re getting yourself in for. Today, business research group [email protected] explores the pros and cons of doing business with your other half. Elsewhere, HR expert Martin Nally discusses whether now is a good time to hire, while Rebekah Campbell also has some ideas about how start-ups should approach the recruitment process. And if you haven’t already, don’t forget to enter the 2013 StartupSmart Awards before the submission deadline on February 20.
Engaging in social media is essential if you run a start-up. It allows you to connect to your customers quickly and cheaply and find out what they think about your products and services.
Entrepreneurs can now register their interest in Web Directions South, a conference aimed at new tech companies, while Startup Weekend is to return to Adelaide for a second time.
Rebekah Campbell, founder of Posse.com, is a regular speaker at conferences and entrepreneur events.
Sydney start-up Posse has completely overhauled its offering, relaunching as a retail-focused app, after raising a further $1.2 million from a host of US and Australian investors.
General Assembly arrived in Australia with a bang this week, with each of its opening classes packed out in Sydney.
In part one of this series, Rebekah Campbell shared her first three sales techniques.
Our coverage last week of female representation – or lack of it – in Australia’s tech industry provoked a surge of comment within the sector.
Start-up mentor network PushStart has revealed the eight successful start-ups for its first-ever PushStart Accelerator program, with each one set to receive $20,000 in addition to mentoring.
Australian women make great entrepreneurs. That’s not just an idle opinion – recent research revealed that Aussie women are second only to their American counterparts when it comes to starting businesses.
When it comes to women in business, Australia is lagging behind the rest of the world. Still.
While working as a band manager, Rebekah Campbell came up with a new and innovative way to connect music artists to their fans.