Start-up culture is robust and thriving in Australia. More people are giving up their day jobs in pursuit of something bigger. Driven by stories of success, others have dared to dream big and make these dreams a reality.
As the mining boom draws to a close, Australian technology poster kids such as Atlassian, Freelancer.com, Shoes of Prey and Canva are leading the start-up revolution.
In a tight economy faced with declining interest for our minerals, dismal retail revenues and disappearing automotive manufacturing, industries such as technology that look at new ways of doing things could be our salvation.
But for these ideas to take seed and grow we need an equally robust investment culture — one that supports new business initiatives from early stages and gives them much needed financial support. One that is willing to take risks.

What is angel investment?
Angel investors fund businesses that have started selling and need financial support for growth. They jump aboard because you now have tangible proof of concept. Angel funding ranges from as low as $15,000 and goes up to around $2 million.
Angel investors often play a big role in mentoring the business as well. They’re likely to be after businesses with exceptional growth prospects and usually take an equity stake in the business.
The number of angel investors has grown to match the start-up landscape over the past few years. In 2006 there were only three angel groups in Australia; there are now about 15.

Getting into the game
Ten or 15 years ago, angel investment was something only millionaires and the uber-wealthy could afford. With start-ups now needing less capital the investment amounts are shrinking, opening the market to mid-level players and investors.

What do I look for in a business?

Personality
I invest in people just as much as their ideas and businesses. Many angel, early stage and seed investors do the same. Angel investment is one of the riskiest ventures, as you do not know if the idea will succeed. We entrust our core belief in the entrepreneur and their ability to scale the idea. That’s why personality traits such as a natural curiosity, agility, resilience and creative thinking are important to investors.

Realistic assessment of competition
Many entrepreneurs think of their ideas as unique and lacking competition, or the competition is irrelevant and not offering the efficiencies that the entrepreneur does. This is entrepreneurial tunnel vision.
Even if no one else offers a product similar to yours, or your product is better and faster than others, competition still exists in the shape of how people do things now. I look for a realistic and holistic market evaluation.

Storytelling
At pitching stage, remember to tell a story. Storytelling is at the heart of every good pitch. Too often, people get caught up in the technicalities of the business and numbers, forgetting to create a sense of excitement for us.

Realistic valuation of the market
Yes, the market potential could be $10 billion, but what is your realistic share within that segment, or how have you determined that share value? I favour good ideas that adopt a bottom-up approach and present a more realistic market potential.

Strong financial model
A common challenge in Australia is the start-up’s ability to scale after reaching a certain growth point. I look for start-ups with sound scaling strategies that help maintain their growth momentum — those entrepreneurs that can convert their start-up to a successful business. ☐