{"id":31980,"date":"2023-10-20T14:26:33","date_gmt":"2023-10-20T14:26:33","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/with-a-40-million-kitty-what-scout-ventures-is-looking-for-in-an-aussie-startup-startupsmart\/"},"modified":"2023-10-20T14:26:33","modified_gmt":"2023-10-20T14:26:33","slug":"with-a-40-million-kitty-what-scout-ventures-is-looking-for-in-an-aussie-startup-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/with-a-40-million-kitty-what-scout-ventures-is-looking-for-in-an-aussie-startup-startupsmart\/","title":{"rendered":"With a $40 million kitty what Scout Ventures is looking for in an Aussie startup – StartupSmart"},"content":{"rendered":"
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New York-based venture capital firm Scout Ventures<\/a> is launching a $40 million Australian branch.<\/p>\n

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The firm specialises in \u201cSeries Seed\u201d investments between $US50,000 and $US500,000, and acts as a bridge for companies moving from angel to institutional investors. It typically invests in startups operating in the mobile and digital payments, big data analytics, commerce and services, cloud infrastructure, social content and advertising sectors.<\/p>\n

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Managing partner Brad Harrison says while US venture capitalists do care about where a startup is from, rising valuations have them looking further afield for better value.<\/p>\n

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\u201cIt enters our minds, because we\u2019re more comfortable with businesses that we can see and touch around the corner, you\u2019re just more comfortable like that,\u201d he says.<\/p>\n

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\u201cBut I think if you\u2019re seeing a business that is differentiated, has traction, shows some level of recurring revenue, then you\u2019re just looking to see whether or not you can get into that business at an attractive valuation.<\/p>\n

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\u201cAnd a lot of times the valuations have been so run up in the US market, that they\u2019re just not attractive anymore.\u201d<\/p>\n

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He says another big positive for startups founded outside of the United States, is cost. It\u2019s costs much less money to develop a startup in Australia than in the US.<\/p>\n

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\u201cAnd not just in Australia,\u201d he says.<\/p>\n

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\u201cFor example we\u2019ve got a company out in New York, they built their entire development team  in Cordoba, Argentina. They\u2019re all full-time employees and one of the founders travels there every two weeks, for two weeks. And it\u2019s a third of the cost (of what it would be in the US).<\/p>\n

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\u201cI like that. But it just begs the question how good is the engineering talent in Australia.\u201d<\/p>\n

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Speaking at elevate61\u2019s Melbourne launch on Wednesday night, Harrison outlined what Scout Ventures is looking for in an Aussie startup.<\/p>\n

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1. Talented team<\/strong><\/p>\n

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\u201cInvesting is about investing in people,\u201d he says.<\/p>\n

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\u201cWe always evaluate the team as the first and most important point of the valuation.<\/p>\n

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\u201cThere\u2019s a couple of things we do with our founders at the very beginning. The first thing is we ask them what number would they sell their company for.<\/p>\n

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\u201cBecause it\u2019s really important if the founder thinks they\u2019re only going to sell their company for $500 million and we think that number is $50 million we\u2019re never going to get along.\u201d<\/p>\n

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2. Proprietary technology.<\/strong><\/p>\n

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\u201cWe want to see something that has been differentiated. Something that’s been built and that we think is competitive,\u201d Harrison says.<\/p>\n

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3. Traction<\/strong><\/p>\n

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\u201cWhether or not that traction is in the Australian market, or in the United States, we want to see that you\u2019ve been able to take your team and your product and actually got some traction with customers.\u201d<\/p>\n

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4. Startups building a product<\/strong><\/p>\n

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\u201cA lot of times we see business that think they\u2019re a product but they\u2019re really just service business,\u201d Harrison says.<\/p>\n

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\u201cAnd service business has much less defensibility around it. Much less recurring revenue around it and takes people to scale it.<\/p>\n

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\u201cWe want business that scale based on the product having a technology that scales it.<\/p>\n

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\u201cWe also have a lot of companies that come to us and think they have a product, and they actually have a feature. And that\u2019s a very, very big differentiation. Because a competitor that has a product, can develop that feature very quickly.<\/p>\n

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\u201cIt\u2019s important to make sure you\u2019re not building features, you\u2019re building products.\u201d<\/p>\n<\/p>\n<\/div>\n

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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 <\/i>Facebook<\/i><\/a>, <\/i>Twitter<\/i><\/a>, and <\/i>LinkedIn<\/i><\/a>.<\/i><\/p>\n


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New York-based venture capital firm Scout Ventures is launching a $40 million Australian branch. \u00a0 The firm specialises in \u201cSeries Seed\u201d<\/p>\n","protected":false},"author":2,"featured_media":62675,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/31980"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=31980"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/31980\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62675"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=31980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=31980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=31980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}