Student start-up organisation, Studio 39 came face to face with early stage and angel investors at a recent function on the Gold Coast. The group, all app and start-up developers, attended the Founders Forum breakfast in Arundal as guests of Griffith Enterprise. The Forum is a network of Gold Coast-based venture capital and private equity firms who also operate as their own private equity fund.
Speakers attended from groups representing industry and capital funds including ABS Morgans, AVCAL, Alto Capital and Brisbane’s River City Labs to discuss the rapidly changing landscape of capital-raising. They were followed by three private equity pitches, which revealed the eye-opening reality of securing capital in the open market.
During the plenary session issues were thrown around the forum including concern that the new enthusiasm from the federal government for innovations and start-ups may bring less savoury elements back to start-up investment, while also exposing some others who are less prepared for the risks involved.
Other issues included the imbalance of investments made by equity firms compared to quality business worthy of investment, need for increased presence of women in STEM, the need for young people to get involved earlier and changes to insolvency laws.
The start-ups then hit the podium.
Honours year Mechanical Engineering student with two app platforms and a start-up in the works, Shannon Darcy noticed the vast disparity between ambition and reality when real money was on the line.
“I think there are two lessons to take from a great forum like this, you need to find the money that gets your business sector and accepts its inherent risks. But also no matter what start-up you’re pitching, you have to have a clear path, some metrics, plan or trigger point to when real money starts flowing back to the investors,” he said.
“No one is funding dreamers, no matter what they say. This is about making money and especially if you’re in the social media start-up space, you have to have a clear idea of when and how you’re going to commercialise. But then your investors need to understand how fraught that decision is as well, there’s no point having an investor pushing for returns on metrics the sector won’t support or through methods the anathema to the platform.”
Founders Forum began in 2001 as a public angel investor network focussed on educating business executives and assisting early-stage investment opportunities. The forum’s chairman, Rick McElhinney spent time with students following the forum and was excited to see the developing student interest and the recent build-up of enthusiasm around start-ups.
He believed Universities provided great spaces for bringing talented people together around valuable ideas. However he also urged greater and quicker preparation toward investable plans so new entrepreneurs are more able to handle risk and begin talking to real investors with real money.
Griffith Enterprise has been working with Studio 39 to provide spaces and resources to address the changing nature of graduate choices, from careers to charting their own direction when they complete their degrees and make their own job.
Interest within the student body for a graduate path toward entrepreneurship has been growing over the last few years and has seen Studio 39 recently begin to host packed out information sessions. Student groups across educational sectors are providing more and more opportunities for students establish business paths beyond graduation, not just career paths.
On the University side, partnerships such as that between the Griffith’s film school, YouTube and HalfBrick gaming are mixing learning opportunities with professional experience and an entrepreneurial push.
But as the Studio 39 crew discovered, there’s no experience like looking for real money to sharpen your instincts test the strength of your ideas.