Find Investor Funding without Leaving Home

With the NBN coming to town there is no reason that Coffs Harbour couldn’t become the Palo Alto of the southern hemisphere.  Local entrepreneurs love Coffs’ great surf and high speed internet….but worry about where to find the money for their bright ideas.

The good news is that it is becoming easier for start ups to raise funds without having to move to the United States….or even to Sydney or Brisbane.  If you’ve got a brilliant idea there are plenty of places to look for money – the secret is knowing where to look.

There are a number of different types of investors, depending upon how much money you need and how far along you are in business development.  We have outlined below the types of investors and where to start looking for these investors in Australia.

Seed Investment

Most entrepreneurs fund their pre-start up phase with their credit card and personal savings.  Some look for what’s referred to as the “3F” investor – family, friends and fools.  But recently a new class of institutional investor has begun to appear that is prepared to invest in the early stages, provide mentorship and help to access the next level of funding once the concept is refined.
Usually these funds will be expecting to reap 6-8% of the equity for an initial investment of $20-50,000.

Australian Seed Investors:

Pollenizer
Startmate
PushStart
Dominet
Founder Institute
Muru-D
Optus Innov8 Seed

Black Citrus
Sydney Seed Fund

Crowd Funding

Still in the early stages of development itself, the crowdfunding concept allows artists and entrepreneurs to seek financial support directly from their potential customers.  Perhaps the most famous example of this is the Pebble Watch which raised over $10million by allowing customers to pre-order their watch before it had even been developed.

There are now a plethora of crowd funding sites to choose from.  This funding method usually does not require entrepreneurs to repay loans or giveaway equity that is attractive.  The downside of course is that your idea needs to “go viral” to successfully raise capital.

Crowd Funding Sites

Kickstarter
Pozible
iPledg

Angel Investors

Once you have built a prototype, proven you concept or (even better) started earning revenue, you can look to Angel Funding.

There are two distinct types of Angels – groups and individuals.  Accessing individual investors relies on your personal networks.  The Angel Groups however and relatively cheap and easy to access.

Angel investors are generally looking at investments between $100,000 and $2million and will expect to take anywhere from 10-50% equity.

Australian Angel Groups

Innovation Bay
Sydney Angels
Melbourne Angels
Capital Angels
Angel Investors Tas
Brisbane Angels

One More Place to Look

iPitch is a relatively new on-line community aiming to educate and connect Australian entrepreneurs.  The site claims to connect entrepreneurs with groups and business that could assist at the start up stage.  It is free to join.

With all of these investment funds it is important to get your pitch right.  Next month we will provide some tips on how to present to potential investors.  But we recommend you talk to your accountant and other business advisors before finalising an investment pitch.

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