With the pandemic, the Russia/Ukraine conflict and weakened supply chains tightening the market and making funding even more competitive for Australian startups to secure, many founders covet international funding and are chasing the holy grail of large international investments.
After decades of senior executive roles as an enterprise-level technology executive and CEO, I spotted a gap. I injected my own personal capital, assembled a small team of software engineers in my garage and created the disruptive decentralised data platform and data mesh for enterprise reporting and analytics. Early on, I couldn’t secure any funding in Australia or overseas, so I had to bootstrap.
Six years later, we closed a $30 million round, securing backing from CIA-backed In-Q-Tel, Exto Partners, Vulpes Ventures Singapore, 72 Capital and others. Zetaris is now valued at $150 million.
Here are my 5 top tips that I wish someone had told me before I embarked on the journey:
Understand your target VCs
Start with clear criteria for the VCs you want to attract. The right VCs are active and aligned in your sector and understand your industry. They should have the capacity to meet your current funding needs and, if this is the start of your finding journey, ensure they can participate in future rounds if that’s a requirement.
Great VCs do more than provide funds. They can be a source of strategic thinking, networking and future funding either directly or by attracting other investors. Importantly, they should feel like good business partners that don’t try to “over-manage” you. It’s a fine balance that you are looking for. An investor is your most important business partner and should be far more valuable to you than just their money.
Do your homework so you understand how your target VCs view the world, what they invest in and their vision of the future. Then highlight how your product or solution supports and enhances their vision. Pitch to them in a way that shows that you are a perfect fit for their objectives and show them a view of how the market will evolve towards your vision in the future. It’s not a one size fits all approach. You need to do your homework and tailor your message and positioning.
Your pitch deck must highlight your vision and road map, the expertise of your team and the financial model. It’s very important to understand that VCs see thousands of pitch decks yearly. Yours needs to stand out from the pile sitting on their desk. Here is an example of some of the pitch decks that were used by many great brands in the technology sector. Another little trick I learned with the pitch deck was to develop a one-page quick summary of the document and put that into your introductory email.
Open an office near your target VCs
You can’t hope to secure the attention of international investors from the other side of the world. You need to go and open an office near them and be present on the ground in their local market. Too many Aussie founders don’t make the sacrifice to go and rattle the tin personally. They think that hiring a Country Manager will be the magic that makes it happen. It isn’t. Nobody but you as the founder understands the vision and the mission and has the passion and commitment to drive it as you do.
Remember, as an Aussie company; you’re already walking 10 feet behind the startups that are pitching to them in their own country. You have to show them how you’re addressing the white space and have a serious point of difference. This does come at a high personal cost; I am the father of four children, and it isn’t the easy path to tread, but it is the only one that is most effective and can short circuit conversion.
Get involved with Austrade
Austrade is an amazing resource; you need to engage with them and be proactive. They will help you get connected in Aussie networking groups overseas and help you understand the groups that will influence key investors, help you penetrate their networks and meet people that the VCs listen to. You have to immerse yourself in the local ecosystem and influence many people – buzz spreads faster when you’re on the ground.
Invest in Gartner and Forrester early
One of my best decisions was to partner early on with Gartner and Forrester. They helped immensely to put us on the radar of the right investors that could help fuel our growth. Analysts can help target investors who have not heard about what you’re doing and get them comfortable with your proposition. Buy that membership and leverage their networks.
Choose the right advisors
It is crucial to do due diligence on potential advisors. There are some great ones out there, but inexperienced founders can fall prey to advisors that are charlatans, who will take your money and provide poor advice. Examine their track record with similar startups and assess if they really have the market knowledge to advise you correctly.
Your board members, advisory board and current shareholder community, are critically valuable advisors who can provide you with connections to overseas investors. Don’t take them for granted; have a plan to cultivate relationships that translate to trust-based advice and recommendations.
Securing foreign investment isn’t a short-term activity. It might take more than a year from when you start having the initial conversations. VCs are savvy and wait to get to know you. They want to understand your long-term vision or if you’re burning capital and are desperate and about to go broke in six months. Once you get their attention, you must be very purposeful in building the right optics over time. They’re building a database on you following every discussion, so you have to constantly excite them and build on the momentum by continuing to demonstrate customer acquisition, potential and growth.
Australian startups can revolutionise the world. The innovation we are creating in this country is groundbreaking. We are creating new ways to analyse data, cybersecurity advancements, and green technologies that can help us and the world reduce carbon emissions and forge new frontiers through medical breakthroughs. There has never been a more exciting time to be an Aussie founder and to push our ideas onto the global stage.