A group of Australian tech entrepreneurs are starting a new early-level investment fund for local tech businesses, with successful applicants to win the chance to pitch their ideas to Silicon Valley entrepreneurs.
Created by Australian entrepreneur Niki Scevak, who founded the US real estate website Homethinking, the new StartMate fund counts an impressive list of investors, including former RealEstate.com.au chief executive Simon Baker, Atlassian founders Mike Cannon-Brookes and Scott Farquahr, and Hitwise founder Adrian Giles.
Baker says the fund is in its early stages, but the plan is to provide $25,000 and mentorship to early-stage tech companies with the first round of funding to begin in early 2011.
There is also a heavy emphasis on connecting the Australian start ups with Silicon Valley entrepreneurs, with Atlassian co-founder Mike Cannon-Brookes comparing the fund to American fund Y Combinator, which has invested in a number of popular, successful tech companies including Dropbox and Bump.
“One of the things I like to push for is to have a lot of connections,” he says.
“Once we get these companies up and further along, we’re going to be taking them over to the Valley, getting them talking with people to really build some of those strong connections.”
“There are obviously parallels to a fund like Y Combinator, but I think one of the differences is having the wide selection of mentors and then just seeing what happens. We’re all pretty committed to the Australian tech industry.”
Baker says the fund is all about “early-stage” investment.
“They can probably get a hold of a little bit of money already, but we think getting access to a group of people and bringing them together so they can get the best out of their business is a good idea.”
“A lot of the stuff is still being figured out, it’s all about consensus with this type of fund and what’s the most interesting to everyone. But certainly we think it’s an innovative idea and doesn’t exist anywhere in Australia.”
The idea is that the fund will also provide direct access to a wide group of mentors. Other members of the fund include Get Price founder Chris Hitchen, Southern Cross Ventures partner Bill Bartee and Quotify co-founder Parl McCarney. A full list is available here.
Cannon-Brookes says the idea has been thrown around among industry veterans for some time, and members were approached by Scevak directly.
“There’s quite a few of us that have been talking about something like this, and we think we’re in the right position to see it happen.”
And while both entrepreneurs say the group is working through some of the finer details, Cannon-Brookes says there will be an emphasis on “internet, computer-oriented services” that show promise for quick monetisation.
“I think there will be a heavy bias towards that, in terms of things like online services. These are services that are able to be monetised, and show the promise of monetisation quite early on in their cycle”.
The StartMate site says the group “wants to help the most exceptional technically-focussed founders create world class companies that solve customer problems”.
“We strongly believe in lean start up principles. The biggest risk in a start up is not whether someone will steal your idea or if you can build a product but rather that no one will care. Startmate is designed to help you win your first customers and work through the initial stages of customer discovery.”
Earlier this year Cannon-Brookes and Farquahr received an investment of their own, taking $US60 million from original Facebook investors Accel Partners.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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