By Nicola Farrell
This week we welcomed local investors who are actively seeking startups in Australia to back and support through the stages of growth. In this session, we attempted to uncover VC Australia and hear from both investors and founders on the challenges faced within the process of investment.
Here’s what we learned:
Investors are always looking for dealflow
As Airtree sits in their office wondering how to generate more deal flow, startups are in the same position contemplating ways to get in front of these investors.
Referrals make the world go ‘round.
So, getting a referral would make a lot of sense if you want to slide into the DF of these startup investors. But where do you start? Accelerators leverage their network to make these introductions happen. But we know not everyone needs an accelerator. Referrals really make the world go ‘round, finding someone through your network to introduce you is probably the best course of action. But before you do that.
Be targeted when approaching VC’s, who are the top people a startup wants to work with?
Easier said than done, but realistically not every VC is for you. Doing your research on whether there’s an alignment can save you time in the long run. Find out what the have already invested in. Does it make sense for them to partner with you too.
Stay in touch
More importantly, demonstrate progress. What’s changed. What’s important that they know. Share details of customer evolution. They might not respond, but that doesn’t mean they are not reading.
Don’t always contact investors for capital.
One annoyance for investors is the inconsistent messaging on opening rounds, closing rounds. There is more that investors want to learn. Many of them come from operating startups and can help solve problems elsewhere. Plus, this is a great way to develop better relationships.
Relationships take time.
Airtree’s John Henderson was able to share with us the average time from introduction to deal was 14 months. This is quite short considering the length of time it takes for startups to complete funding rounds. Promising none-the-less.
To summarise, it is a matter of relationships and one that needs to last the test of time. Short wins don’t really apply here, which is reflective of building a startup. Keep chipping away until you land on something valuable, and continuously learn your way through.