MSM wonder where the Aussie angels are too
"The venture funds are terrific if you need $5 million, but the biggest problem in Australia is $100,000 to $2.5 million."
Amen. So says Alan Milwidsky, executive director of Business Strategies International, in this Oz piece from yesterday. Apparently the Fin also covered this story, although it's behind that stupid ******* pay wall. Allow me to add a few more swear words about that policy: *****, ***** and *************. That means you, Mark Jones.
So anyway, following on from last week's bit on angel funding, I have been wondering why there isn't a local Paul Graham doing something like Y Combinator. If I ever manage to sell a business for enough money to give me an angel-level funding base, that's what I would do. Set up incubators in run-down shacks in Fitzroy, Redfern, Fortitude Valley, Fremantle and wherever in Adelaide that's young and hip and techy (though that might be hard to find), and hit the university campuses to look for recruits. Stand in front of lecture theatres for engineers, computer scientists, journalists, artists, whatever, and throw chairs and shout "FOUNDERS, FOUNDERS, FOUNDERS!" Interview the hopeful two-to-three-person teams, pay the good ones $6000 each for three months and take 6% of the company (as Y Combinator does), and set them to work in a sheltered environment to see what they can do. It's such a simple, low-cost model, and Graham has shown that it can work. Not that I want to go all Whitney Houston here, but I believe that innovation comes largely from university experience, as it did for me, and all those VCs building multi-million dollar warchests are going to have to sit there twiddling their thumbs unless some local angels take a leading role in nurturing the smart twenty-year-olds who are just waiting for their chance.
Is there a member of the Australian cashouterati from the first Internet boom who is willing to take that kind of chance? I hope so.