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TechnologyCollusion founder hits out at local VCs ahead of Silicon Valley relocation: FundingCollusion founder hits out at local VCs ahead of Silicon Valley relocationBy Oliver Milman A Sydney entrepreneur has slammed the local venture capital market for being “asleep” ahead of his business’ foray to the US, where he aims to raise a total of $10 million from interested investors.
Robert Yearsley’s start-up Collusion has recently been the talk of Sydney’s tech scene, despite only emerging from a short Beta mode yesterday.
The business provides a new way of writing, drawing and collaborating on the iPad. For a price point somewhere between $100 and $150, customers can buy a stylus, app and collaboration tool that will allow them to take notes or sketch plans and share them in real time with others.
Collusion already has $30,000 in sales orders and is primed to list its project on crowdfunding site Kickstarter, where Yearsley says he expects an initial target of $100,000 in funding to be surpassed by as much as $5million.
The business, which Yearsley founded with Sumeet Patel and Navdeep Saini, is set to relocate to Palo Alto in California within the next two months, in a bid to raise a further $5 million in funding.
Yearsley says that he probably wouldn’t shift the business to California if Australian investors showed the same level of interest as their US counterparts.
“We’ve not spruiked ourselves to investors at all, but we’ve already had three investment enquiries from the US. There have been no enquiries from Australia,” he tells StartupSmart.
“It seems that Aussie tech VCs can’t even be bothered to look at what’s going on in their own backyard. I could go round chasing them all and try and get them out of a meeting, but the US investors are just in a different league.”
“We would want to stay in Sydney. We’ve enjoyed living and working by the beach and we could base the business anywhere, really. But we’ve been tearing our hair out at the investors here because unless it’s a proven model in the US or UK, they aren’t interested.”
Yearsley says that he has already been approached by a Colorado advertising agency keen to do pro bono work for the start-up, as well as invites from Microsoft and Facebook to visit their offices.
“There’s some great interest from some of the really serious players in the US, but locally everyone seems to be asleep,” he says.
“We will look to recruit around 10 people in the next 12 months and then do the cliché of renting a house with a garage in Palo Alto and code like crazy.” |
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Comments (3)
Subscribe to this comment's feedI think the Aussie scene is much more vibrant than you may think - from incubators to seed funds, government initiatives and larger VC and investment entities there are many opportunities. Make sure you reach out to a few of these in addition to your international contacts. It's good to cast a wide net, build interest and then focus on the best possible investors from both a strategic and cap-raise perspective.
They are constantly missing the boat: ie Atlassian, Big Commerce, Freelancer,and Tapolous RIGHT THERE IS OVER A BILLION DOLLARS OF MARKET CAP, all driven by foreign VC! I do see a glimmer of hope with a few bright spots namely Starfish and the Folks @ Adventure Capital who 'get it', but they are the exception.
Please name one innovative local tech success in the same league (both in market cap and global reach) as the above companies that LED with local VC investment. Even Mike Cannon Brooks against all the odds kept Atlassian "led from Sydney" went with Accell Venture Partners fro the US. Hats off to Mike, because he hardly ever removes his:)
The local Investor market is not globally competitive. Take Caggle, who achieved close to a 500% bump on valuation, by hopping on a plane for 17 hours. What would you do?
Personally (and what wasn't reported on in the article) I'm heavily involved in trying to improve the local community where ever possible. So I think I've earned the right to bitch about this problem with a degree of confidence. Having raised cap may times over the years here and internationally, I agree with you that it is indeed possible to do it locally.
My argument from the article was that when the US VC market is clearly actively monitoring the local tech community and reaching out when the see something the like (from half the world away), yet there is zero interest locally - why would you go door nocking around sydney?
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