If you're an Australian start-up or early stage business seeking venture capital, you can approach government sources or private sector funds.

Knowing the following will help you succeed:

  • where to source the most suitable funds
  • how to approach fund managers
  • understanding their expectations.

The steps on this page provide an overview on how to go about sourcing venture capital.

1. Create a toolbox


In your toolbox you should include dynamic documents you can update and change as you learn more in the market place. They should cover compliance, intellectual property and legal issues.

You should create:

  • a 60 to 90 second elevator pitch
  • a sales pitch targeted toward prospective customers
  • an awareness pitch for a broader audience
  • a concise one page description, including the value of your idea and customer references
  • follow-up documents
  • a business plan, a proposal, a fact sheet and specifications.

2. Find the right investors


Before you contact an investor, think about who they are. Find out what they specialise in and understand what investments they have made and why. This will help you find the best partner for your business.

When thinking about what investors you will approach for venture capital it is important to consider different criteria.

Industry expertise

Consider what industry the investor comes from and what industries they have previously invested in. It is helpful to have an investment partner with expertise and proven success in your industry. They will be able to help you navigate problems, avoid mistakes and have better success.

Experience

Consider whether the investor has a track record of success. This might include having built up or sold a company before, a history of successful investments or running businesses with a consistently high revenue. An investment partner with the right experience can help you navigate challenges and take your business to the next level.

Network

Investigate other companies that sit within your investor’s portfolio. You might be able to network with these groups to share knowledge, find mentors and identify other investors. Look at the size of the investor’s network, as well as the industries and expertise that it is made up of.
When you find the right investor, take the information you have learned about them into consideration when preparing your pitch.

The Australian Investment Council

The Australian Investment Council also provides information and guidance for entrepreneurs seeking investment from private investors. They also provide relevant transaction document templates for you to use.

3. Be prepared


Prepare well before your meeting to have the best chance at success. You should be clear about the problem you are solving and value of your idea.

While preparing your presentation, you should consider:

  • the amount of capital you require
  • what you will use the capital for
  • what you expect to achieve
  • what your vision is for the next 5 to 7 years.

The investor will want to know about the ins and outs of your business, your industry and your customers. Make sure you prepare information that will:

  • explain the unique benefits of your idea and any associated technology
  • demonstrate a strong and credible business model
  • describe the strengths and weaknesses of your team
  • explain your customer and competitor analyses
  • define the intellectual property strategy.

4. Know your numbers


Knowing the financial information of your business is an essential part of pitching to investors.

You should be very familiar with your financial projections for the short term and long term future. Projections should be ambitious and reflect your growth potential but remain realistic and achievable.

Highlighting your revenue and sales can back up your projections by demonstrating your history of success and growth.

Having in depth details of all your financial information can help you sell your business to potential investors.

5. Ask for feedback


Getting told no by investors is a normal part of pitching for venture capital. Investors may say no for many reasons, such as your business not being the right fit or already investing in something similar. Embrace the opportunity to improve your pitch through asking for feedback.

Investors often have connections across many industries so they may be able to share your details with other investors or potential customers.

Where to find venture capital


If you are seeking venture capital, learn about the different programs and contact the funds registered or licensed under those programs.

Find a list of registered and conditionally registered Venture Capital Limited Partnerships.

Find a list of registered and conditionally registered Early Stage Venture Capital Limited Partnerships.

Find a list of limited partnerships registered and conditionally registered as an Australian Venture Capital Fund of Funds (AFOF).

Find details on the 3 licensed private sector fund managers who are responsible for investment decision making.

Find the document listing the companies registered as Pooled Development Funds.