Top Tips for VC Funding in Australia

Last week we held an event in our Playroom in Sydney where our current cohorts from Sydney and Perth, as well as our muru-D alumni were super pumped to hear from four top Venture Capital firms in Australia.

The panel, lead by Eitan Beinstock, our Sydney Entrepreneur in Residence, was made up of:

Amanda Goodman, Impact Investment Group
Alister Coleman, Tempus Partners
John Henderson, Airtree Ventures
Jeremy Kwong-Law, Grok Ventures

Here are their top tips when raising capital for your startup.

1. Work out what option is suitable for you and your business. Is it a loan from family/friends, family office, high net worth investors, debt, seed capital, venture capital or do you self fund (bootstrap). And of course revenue! Remember, Venture Capital is only one source of funding.
2. When approaching VC firms, do your homework on what the firm invests in. Some will only invest in later stage startups, while others may only invest in certain industries or missions.  For example, the Impact Investment Group invests in businesses that have purpose.
3. Talk to other founders who have received investment from a VC firm and find out about their experience.
4. Get an introduction to the VC rather than cold calling, connecting on Linkedin or bailing them up in the street (yes, this happens). Your best bet is an intro from one of the firms they have already invested in.

Here are their collective “Do’s and Don’ts” when approaching VCs.

Do

1. Be authentic. It doesn’t take long to work out if you’re not.
2. Show that you really care about what you’re doing.
3. At early stage raising, customer engagement is more important that huge number of customers. Show that customers love what you do.
4. Show product/market fit
5. Be transparent. Share your information as the “ugly” stuff will bubble to the surface soon enough.
6. A personal fit is important for both the founder and the VC. If you don’t get along, this will be problematic.
7. Build a relationship with VCs. Let them get to know you over time and vice versa.

Don’t
1. Outsource your product. It’s better to have the IP and skill set in house. It also makes it easier for iterations.
2. Have a slide that says “Exit opportunities”
3. No BS or hard sell eg “Hurry, the rounds about to close”. “Don’t miss out on this great opportunity”
4. Use “corporate advisors”* to do the selling and raise capital for you. You are the best advocate for your business and VCs want to meet with the people who they’ll be working with on an ongoing basis.

And a final word from the night….

“As a founder you are a storyteller. You need to tell your story to your customers, employees and investors.  Being a good storyteller matters.” John Henderson, Airtree Ventures

Note: The tips above have been collated from the VCs present at our event and are their views and opinions based on their experience and how they run their particular firms.

*Corporate advisors in this context are people whose business model is based around raising capital and earning money from it. It does not refer to the people who are advising you on how to run your business.