{"id":43760,"date":"2023-10-20T15:30:56","date_gmt":"2023-10-20T15:30:56","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/investment-in-australia-limited-but-improving-tips-on-raising-capital-startupsmart\/"},"modified":"2023-10-20T15:30:56","modified_gmt":"2023-10-20T15:30:56","slug":"investment-in-australia-limited-but-improving-tips-on-raising-capital-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/investment-in-australia-limited-but-improving-tips-on-raising-capital-startupsmart\/","title":{"rendered":"Investment in Australia limited but improving: Tips on raising capital – StartupSmart"},"content":{"rendered":"
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Australian start-up successes need to be celebrated to attract more funding to the sector, a discussion panel at the recent Startup Victoria conference has heard.<\/p>\n

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The challenges and opportunities facing start-ups seeking funding were addressed in a panel discussion made up of Scale angel investment network founder Laura McKenize, App.io (previously Kickfolio) founder Ed Dowling and LIFX founder Andrew Birt.<\/p>\n

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Australian investment scene limited but improving<\/h3>\n

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Event coordinator and entrepreneur Scott Handsaker kicked off the discussion by sharing his theory that Australian investors were \u201ca little bit sh*t\u201d, and asked the panel for their thoughts.<\/p>\n

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Birt, who coordinated the $1.3 million Kickstarter campaign that launched the LIFX light bulb product and capital raising process, says the Australian investment space is evolving as successful entrepreneurs begin to invest in the next wave of start-ups.<\/p>\n

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\u201cMore and more we\u2019re getting a wave of successful entrepreneurs who are coming through,\u201d Birt says, adding that some of his own and his peers\u2019 experiences with institutional investors would lead him to agree with Handsaker.<\/p>\n

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McKenzie agrees the Australian investment scene is growing and improving, and would continue to as Australian start-ups performed well.<\/p>\n

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\u201cThere have been relatively few success stories that have been celebrated publicly,\u201d McKenzie says. \u201cWe need to celebrate success more to attract more money to the sector.\u201d<\/p>\n

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Dowling, who recently raised just over $1 million in seed capital in Silicon Valley, says Australian investors can \u201cappear to suck\u201d as there were fewer deals because of fewer available investors. He added raising funds is never easy.<\/p>\n

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\u201cYou have to work really hard to raise money everywhere,\u201d Dowling says. \u201cThere are so few Australian investors so they see every deal and have a really tough job choosing what to develop.\u201d<\/p>\n

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Dowling added that companies looking to raise seed funding in Australia need a valuation of around $1 million, compared to companies seeking the same amount in the US which need a valuation of $3 million to $7 million.<\/p>\n

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McKenzie disagreed. \u201cWe hang onto the numbers that are double or triple the average,\u201d McKenzie says, adding the most recent research into American seed capital found the average company valuation was $2.3 million.<\/p>\n

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Getting the investment relationship right is key<\/h3>\n

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The panel agreed start-ups need to recognise that investment is the beginning of a relationship, and it\u2019s important to get that right.<\/p>\n

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\u201cWork with someone who has the experience, not just the money. If you take money from someone who hasn\u2019t been there and done that, your expectations will be unaligned,\u201d Birt says. \u201cThe last thing you want is dumb money.\u201d<\/p>\n

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Birt added that investments are negotiations and if the relationship is strong you don\u2019t need to get hung up on reaching a $1 million valuation.<\/p>\n

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Dowling shared that App.io\u2019s funding process saw them pitch to 100 investors, follow up with 54 and eventually work with 19. He explains the process here:<\/p>\n

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