Victoria is home to a vibrant startup community, particularly in the fintech space which has given rise to a number of companies, apps and platforms designed to ease access to investment for middle income earners. Allow us to introduce you to a few of the most successful.
Seedly is Australia’s first true equity crowdfunding platform, giving any Australian the opportunity to invest in early-stage start-ups. Co-founded by Mark West and David Livingston, who met during Monash’s MBA Program, the platform provides investors with exclusive access to high-growth, early-stage companies that have previously been off-limits.
For a minimum of A$500, investors can choose which companies to support in exchange for shares. For start-ups, Seedly enables funding rounds of up to A$5 million. “We’ll support you before, during, and after funding, and handle all the documentation so you can focus on your business,” says co-founder Mark West.
Seedly’s creation relies on changes to crowdfunding rules to remove limits on the number of shareholders you can have in a small company. Though it has yet to be legislated, (the bill had yet to pass the Senate when the election was called), co-founder Mark West says it is in the process of “going through”.
“It can be very difficult for startups and high-growth SMEs in Australia to access funding right now,” said West. “Regulations limit the number of people who can invest, and it can be hard for startups to meet investors and vice-versa. Seedly will enable more people to invest in ideas and businesses they believe in.”
Meet: First Step
First Step is a mobile app that allows users to invest their loose change from electronic transactions into a diverse portfolio. Co-founded by chartered accountant Matt Fish & certified public accountant, Shiraj De Silva, the platform is designed to remove entry barriers to the world of investment for middle-income earners.
“People believe you need a lot of money to start investing,” says de Silva. “It has prevented a lot of people from getting started. Our focus is to educate young investors. You can invest as little as A$1 to get started. The idea is you can’t lose a great deal when you’re investing such small amounts. As they learn and develop their understanding of investment, users can increase their contributions.
“We also have pre-selected portfolios which are based on the advice of an investment committee, it saves on the hassle of having to select your shares if you don’t know very much about them.”
For a startup to succeed, De Silva says it’s important to be embedded in the community where your company is founded.
“Be near your investors, development team and early adopters,” he said. “Where those entities are [located] is more important than where people tell you they need to be. For us it was Melbourne.”
Meet: Six Park
Six Park is a robo-advisor start-up which combines human oversight with automated technology and sophisticated algorithms to help users create a professionally-managed diverse investment portfolio. The start-up is the brainchild of former JP Morgan employee Patrick Garrett and JP Morgan Australia chief, Brian Watson. Its board boasts a former federal finance minister, Lindsay Tanner and former Future Fund chief, Paul Costello.
The federal changes to employee share scheme options “massively” influenced the creation of the company, as well as the new 20 per cent investment rebate offered under the loose-banner head of “The Ideas Boom”.
“The changes were very important ones, in our view,” says co-founder Patrick Garrett.
The co-founder said the company also explored some of the old grant programs but found they were too cumbersome for a startup. “Lots of paper works, lots of hoops to jump through, it’s very difficult to even get a A$50,000 grant, we were too busy with other things like building the platform to fruitfully harvest the grant world and we were never really encouraged to by the people in the industry.”
As for his advice on how to avoid being part of the 50 per cent of startups that fail, Garrett says it is important to have “110 per cent conviction and confidence in your product but have the common sense and humility to know how to adapt and change”.