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1
A Founders Guide to
Australian Venture Capital
Craig Blair
@craigRblair
I have been a founder of several successful
startups and a VC investors for almost 20 years
•  Cofounder & partner of two ...
Our Previous Funds
Netus  2005  -­‐  2012    
  
Ecorp  1997  –  2003    
20+  
years  experience  
  
4.1X  
cash  on  ca...
4
PAUL BENNETTS
Investment Director
CATH ROGERS
Investment Manager
CRAIG BLAIR
Managing Partner/Co-Founder
DANIEL PETRE
Ge...
5
AirTree by numbers
TOTAL
INVESTED
COMPANIES
BACKED
TOTAL
EXIT VALUE
EXITS
29 17 $181m $525m
6
How we invest
Stage  of    
investment  
Average  size  of  
investment  
Investments  made    
in  the  past  12  month...
The AirTree Family
8
AUSTRALIAN VENTURE CAPITAL
ECOSYSTEM
8
9
The history of Australian venture capital
isn’t pretty
10
But some green shoots are appearing..
11
Number of
start-ups per
year	
  
1995 2000 2005 2010 2015 2020 2025
100
1,000
10,000
$80m
$40m
$60m
?
Size of
fund	
  
...
12
£5m  
$1.5m  
$20K  
1998  
My  first  
start-­‐up  
2005-­‐2011  
Businesses  built  in    
the  Netus  vintage    
  
...
Lots of talented grads are now
choosing start-up as a career
13
Source: WittyFeed, 2015
14
$100m+
Australian VC Ecosystem
ACTIVE FUNDS
<$20m
$20 – $100m
15
US VENTURE CAPITAL
15
WINTER IS
COMING
17
The Unicorn fetish
Source: CB Insights, 2015
Public markets have punished tech companies that
have under delivered on growth expectations
18Source: Mahesh VC, 2015
And things could get worse in H2 of this year
19Source: CB Insights, 2015
VC funding flows have been declining for the
past six months
20
21
Valuations have reverted to long term averages
THE GOOD ARE
TIMES OVER!
22
23
WHAT DOES THIS MEAN FOR
AUSTRALIAN FOUNDERS?
23
24
AUSTRALIA MAY ENJOY A BRIEF INDIAN
SUMMER...
..BUT A COOL BREEZE IS BLOWING
25
Product
market fit
Sound unit
economics
Delivery of
growth exp
Control of
cash burn
✓ ✓ ✓ ✓ = Will Thrive
✓ ✓ ✗ ? =
Nee...
26
Avoid the temptation of a subscale ASX listing
The sugar hit does not last long..
Source: Yahoo Finance April 2015
27
Approaching a VC
Do homework
on the
VC/Partner
Know your
metrics
Use contacts
to get an introduction
Use advisor
sparin...
28
Key focus points for seed to series A
Revenue/unit
Fully loaded cost/
unit
Contribution/unit
Unit Economics are critica...
29
Customer Acquisition Cost
(CAC)
Life Time Value
(LTV)
Key focus points for seed to series A
30
VCs are the employees you can’t fire..
✔
Can they add REAL value over capital?
Are you aligned on how to scale the busi...
BUT IT‘S NOT ALL
DOOM AND GLOOM
31
32
Tech exit valuations for 2015
Source: Global Tech Exits Report 2015, CB Insights
33
Great companies are started in all markets
Source: CB Insights, 2015
34
For the Australian ecosystem to thrive,
ALL parts have to demonstrate success
START-UPS
Iconic
Companies
FOUNDERS
Succe...
WE ARE A LONG WAY FROM NIRVANA
BUT IT’S A WHOLE LOT BETTER THAN
THE PAST AND WE ARE HEADED IN THE
RIGHT DIRECTION
35
36
THANK YOU
@craigRblair
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A Founders Guide to Australian Venture Capital - Craig Blair, AirTree Ventures

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Craig Blair, co-founder of two VC Funds and founder of many start-ups shares his insights on the US VC and Aus VC ecosystem and what it means for founders

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A Founders Guide to Australian Venture Capital - Craig Blair, AirTree Ventures

  1. 1. 1 A Founders Guide to Australian Venture Capital Craig Blair @craigRblair
  2. 2. I have been a founder of several successful startups and a VC investors for almost 20 years •  Cofounder & partner of two VC funds: •  Netus (2005 - 2012) •  AirTree (2014 – present) •  Founder of: •  Pet Circle •  Beamly (zeebox) •  Travelselect/Lastminute.com I was originally an engineer ‘building things’. I have also been a management consultant.   Me in 30 seconds
  3. 3. Our Previous Funds Netus  2005  -­‐  2012       Ecorp  1997  –  2003     20+   years  experience     4.1X   cash  on  cash  returns   in  2  funds  
  4. 4. 4 PAUL BENNETTS Investment Director CATH ROGERS Investment Manager CRAIG BLAIR Managing Partner/Co-Founder DANIEL PETRE General Partner/Co-Founder We all have deep operational experience
  5. 5. 5 AirTree by numbers TOTAL INVESTED COMPANIES BACKED TOTAL EXIT VALUE EXITS 29 17 $181m $525m
  6. 6. 6 How we invest Stage  of     investment   Average  size  of   investment   Investments  made     in  the  past  12  months   12   40% 40% 20% $1.5m   $5m $100k Smallest   Largest  
  7. 7. The AirTree Family
  8. 8. 8 AUSTRALIAN VENTURE CAPITAL ECOSYSTEM 8
  9. 9. 9 The history of Australian venture capital isn’t pretty
  10. 10. 10 But some green shoots are appearing..
  11. 11. 11 Number of start-ups per year   1995 2000 2005 2010 2015 2020 2025 100 1,000 10,000 $80m $40m $60m ? Size of fund   ? We are seeing 10x the number of start-ups than we did 10 years ago Ecorp netus AirTree I AirTree II The future
  12. 12. 12 £5m   $1.5m   $20K   1998   My  first   start-­‐up   2005-­‐2011   Businesses  built  in     the  Netus  vintage       2016   It’s now possible to build a start-up with a credit card
  13. 13. Lots of talented grads are now choosing start-up as a career 13 Source: WittyFeed, 2015
  14. 14. 14 $100m+ Australian VC Ecosystem ACTIVE FUNDS <$20m $20 – $100m
  15. 15. 15 US VENTURE CAPITAL 15
  16. 16. WINTER IS COMING
  17. 17. 17 The Unicorn fetish Source: CB Insights, 2015
  18. 18. Public markets have punished tech companies that have under delivered on growth expectations 18Source: Mahesh VC, 2015
  19. 19. And things could get worse in H2 of this year 19Source: CB Insights, 2015
  20. 20. VC funding flows have been declining for the past six months 20
  21. 21. 21 Valuations have reverted to long term averages
  22. 22. THE GOOD ARE TIMES OVER! 22
  23. 23. 23 WHAT DOES THIS MEAN FOR AUSTRALIAN FOUNDERS? 23
  24. 24. 24 AUSTRALIA MAY ENJOY A BRIEF INDIAN SUMMER... ..BUT A COOL BREEZE IS BLOWING
  25. 25. 25 Product market fit Sound unit economics Delivery of growth exp Control of cash burn ✓ ✓ ✓ ✓ = Will Thrive ✓ ✓ ✗ ? = Need to create cash runway. Ideally 18months ✓ ✗ ✗ ? = Existential Crisis Down rounds don’t happen. Investors are focused on unit economics and valuation/growth metrics Australian Founder Checklist
  26. 26. 26 Avoid the temptation of a subscale ASX listing The sugar hit does not last long.. Source: Yahoo Finance April 2015
  27. 27. 27 Approaching a VC Do homework on the VC/Partner Know your metrics Use contacts to get an introduction Use advisor sparingly 1 2 3 4
  28. 28. 28 Key focus points for seed to series A Revenue/unit Fully loaded cost/ unit Contribution/unit Unit Economics are critical..
  29. 29. 29 Customer Acquisition Cost (CAC) Life Time Value (LTV) Key focus points for seed to series A
  30. 30. 30 VCs are the employees you can’t fire.. ✔ Can they add REAL value over capital? Are you aligned on how to scale the business? How you solve problems together in the early discussions? Can they support the business through future rounds? Does their brand help hire talent and raise future rounds? Do at least 3-5x reference checks…
  31. 31. BUT IT‘S NOT ALL DOOM AND GLOOM 31
  32. 32. 32 Tech exit valuations for 2015 Source: Global Tech Exits Report 2015, CB Insights
  33. 33. 33 Great companies are started in all markets Source: CB Insights, 2015
  34. 34. 34 For the Australian ecosystem to thrive, ALL parts have to demonstrate success START-UPS Iconic Companies FOUNDERS Successful exits VC FUNDS Return on Investment ANGELS Return on Investment
  35. 35. WE ARE A LONG WAY FROM NIRVANA BUT IT’S A WHOLE LOT BETTER THAN THE PAST AND WE ARE HEADED IN THE RIGHT DIRECTION 35
  36. 36. 36 THANK YOU @craigRblair

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