a founders guide to australian venture capital - craig blair, airtree ventures
TRANSCRIPT
I have been a founder of several successful startups and a VC investors for almost 20 years • Cofounder & partner of two VC funds:
• Netus (2005 - 2012) • AirTree (2014 – present)
• Founder of: • Pet Circle • Beamly (zeebox) • Travelselect/Lastminute.com
I was originally an engineer ‘building things’. I have also been a management consultant.
Me in 30 seconds
Our Previous Funds
Netus 2005 -‐ 2012
Ecorp 1997 – 2003 20+ years experience
4.1X cash on cash returns
in 2 funds
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PAUL BENNETTS Investment Director
CATH ROGERS Investment Manager
CRAIG BLAIR Managing Partner/Co-Founder
DANIEL PETRE General Partner/Co-Founder
We all have deep operational experience
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How we invest
Stage of investment
Average size of investment
Investments made in the past 12 months
12 40% 40% 20% $1.5m
$5m $100k Smallest
Largest
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Number of start-ups per year
1995 2000 2005 2010 2015 2020 2025
100
1,000
10,000
$80m $40m
$60m
?
Size of fund
?
We are seeing 10x the number of start-ups than we did 10 years ago
Ecorp netus AirTree I AirTree II The future
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£5m
$1.5m
$20K
1998 My first start-‐up
2005-‐2011 Businesses built in the Netus vintage
2016
It’s now possible to build a start-up with a credit card
Public markets have punished tech companies that have under delivered on growth expectations
18 Source: Mahesh VC, 2015
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Product market fit
Sound unit economics
Delivery of growth exp
Control of cash burn
✓ ✓ ✓ ✓ = Will Thrive
✓ ✓ ✗ ? = Need to create cash runway. Ideally 18months
✓ ✗ ✗ ? = Existential Crisis Down rounds don’t happen.
Investors are focused on unit economics and valuation/growth metrics
Australian Founder Checklist
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Avoid the temptation of a subscale ASX listing
The sugar hit does not last long..
Source: Yahoo Finance April 2015
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Approaching a VC
Do homework on the
VC/Partner
Know your metrics
Use contacts to get an introduction
Use advisor sparingly
1 2
3 4
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Key focus points for seed to series A
Revenue/unit Fully loaded cost/unit Contribution/unit
Unit Economics are critical..
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VCs are the employees you can’t fire..
✔
Can they add REAL value over capital?
Are you aligned on how to scale the business?
How you solve problems together in the early discussions?
Can they support the business through future rounds?
Does their brand help hire talent and raise future rounds?
Do at least 3-5x reference checks…
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For the Australian ecosystem to thrive, ALL parts have to demonstrate success
START-UPS Iconic
Companies
FOUNDERS Successful
exits
VC FUNDS Return on Investment
ANGELS Return on Investment
WE ARE A LONG WAY FROM NIRVANA BUT IT’S A WHOLE LOT BETTER THAN
THE PAST AND WE ARE HEADED IN THE RIGHT DIRECTION
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