Women Led Startups More Attractive to Investors

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Blog by Tech Ready

An American financier ranks amongst the most successful investors in history, turning around US$100 million into US$4.36 billion. Can you guess the name?

George, Paul, Ben, Gary or Henry?

Nope, it was Henrietta Howland Green. Ms Green’s love of a ‘holding period of forever’ and steely conviction in her stock choices had her ranked as one of the greatest investors in history.

Despite her passing away in 1916, she encouraged many, in the face of the GFC, to ask the question,

“Are women better at investing than men? Are they better at running startups and companies? Are they more investable?”
A study by a team from the University of California, Berkeley, based on 35,000 brokerage accounts during a six-year period in the early 1990s, found that women generated returns of one percentage point more on average per year than their male counterparts.

Over a period of time this is a significant outperformance given that the long-term average real rate of return on stocks is around 5%.

“We found that men traded far more than women”, Odean says. “Since buying and selling costs money, that over-activity reduced the investment gains of men by a significant margin”
The study put this down to a number of factors, good behaviour, long term thinking, less knee jerk panic reactions, more realistic, cautious, less risk taking, less susceptible to over-exuberance, an inclination to not sell at the bottom of the market and apparently ‘Men, it seems, are more prone to exaggerating their knowledge and abilities than women, across a range of activities.’ Odean says!

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Equity crowdfunding has finally passed in Australia: FinTech Australia, Equitise and Pozible say retail investors should get ready

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Equity crowdfunding legislation has finally been given the tick of approval by the federal Parliament, after more than two years of industry consultations, government deliberations and debate.

The Corporations Amendment (Crowd-sourced Funding) Bill 2016 passed through the Senate on Monday with agreement from the opposition, after Labor senator Katy Gallagher put forward two amendments related to the cooling-off period for investors and eligibility for a wider range of startups and small business.

With support from the Greens and the Nick Xenophon Team, the cooling-off period was changed from 48 hours to five business days.

However, Labor’s request to change one of the conditions for eligibility from a “public company limited by shares” to “the company has an agreement with a CSF [crowdsourced funding] intermediary that is legally enforceable” did not go through.

The legislation is expected to come into effect in the next six months, opening up the market of high-growth ventures to retail investors.

“We’re relieved because it’s a really good start,” FinTech Australia chief executive Daniell Szetho tells StartupSmart.

“We’ve been lobbying for this change since almost 2015.”

While the final bill is “limited in scope”, Szetho says its passing through the Senate means regulatory bodies like the Australian Securities and Investments Commission can start developing frameworks for a range of small to medium enterprises to access new capital through crowdfunding.

In February this year, shadow minister for the digital economy Ed Husic told StartupSmart he believes a key problem with the equity crowdfunding bill is that it excludes more than 99% of small businesses and startups in Australia.

But Szetho believes the legislation will actually “help a whole new group of companies”, not just startups.

“It’s very easy for the startup community to become very self-focused,” she says.

“It’s not really targeted as much to startups, which are all usually private companies.”

With the Australian Securities Exchange’s “sweet spot” usually companies with a market capitalisation of between $50 – 500 million, Szetho says, there are numerous other smaller businesses who need investment to launch their next phase or expand into new markets, but would be burdened by the “onerous” process of undertaking an initial public offering.

Equity crowdfunding will be transformative for these business, she says, especially, considering the burgeoning demand from around the world to invest in Australian early-stage and small and medium businesses.

“There’s very strong retail investor demand,” she says.

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A new way of sourcing quality risk and compliance talent for small gigs – fast!

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James Lai
CEO and Founder of MEETIG8

Two weeks ago, I received a call from a Project Director at a major Australian financial institution asking if I can help him source a highly skilled and experienced Risk Lead for a multi-million dollar project.

He was frustrated having spent the previous month reviewing stacks of CVs from a number of recruitment firms and conducting numerous interviews on a bunch of candidates who turned out to be duds. Clearly, time was running short for him given looming project deadlines and a possibility that it will take another month of interviews before they can find someone suitable!

MEETIG8 – A new way to source Risk and Compliance talent for short-term gigs

Having launched our new start-up MEETIG8 in January this year, we were able to help him out immediately. MEETIG8 is an online marketplace that connects companies of all sizes with Risk, Compliance and Audit freelancers directly and fast! We are a platform built and operated by ex-Risk professionals, and therefore, we have deep understanding and intimate knowledge of what our customers need.

Since our launch in January (2017), we have had a good number of high quality and experienced Risk Professionals signed up and ready to go!

The online marketplace will be live from May (2017) this year but we are now open for business and have been assisting companies find talent since launch. When the online marketplace goes live, companies can directly connect with the freelancers via the platform.

Sourcing the right talent … fast!

Having been briefed, and clearly understood what the role of the Risk Lead is, we provided one CV of a strong candidate whom we felt ticked the boxes.

An interesting fact about the candidate was that he did not have much “local experience”. A number of recruitment firms previously told him that the chances of landing a job here is pretty low.

At MEETIG8, we do not make sweeping calls on the specialist’s chances based purely on “local experience”. We knew we spotted a gem in the specialist having had great foundations gained from a Big 4 accounting firm and a strong project risk and people management experience (from overseas). We strongly believed in our candidate and recommended him to the client (one CV provided, our best person for the job).

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This start-up life: why everyone’s a ‘slashie’ in the age of multiple careers

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You might never have heard it used before, but I love the word “slashie”.

The cool kids use it to describe the likes of Ruby Rose; one-time VJ, part-time model and now star of the silver screen.

If your high school highlight was seeing the debating bar being stitched to your blazer, you probably use it to describe the likes of Peter Van Onselen; academic, politico and cross-platform commentator.

Both are sirens to their respective crowds.

Recent images of Ruby Rose at the Mardi Gras would soften even the hardest One Nation heart.

And, rare would be the thinking woman who hasn’t, at some point dreamed herself to sleep with the dulcet tones of Van Onselen’s political commentary.

The addition of “slashie” to our vocabulary speaks volumes about the evolution of new career paths.

Twenty years ago, career planning for high performers was very linear.

You graduated from a sandstone university. You joined a credible firm. From there you upwardly managed and desk hopped until you reached the elysian fields of a corner office with a harbour view.

Shortly after, you typically expired from stress or boredom. If Simba was a solicitor, this would be his circle of life.

Three things have changed all this.

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Companies are queueing to use Australia’s new equity crowdfunding laws

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Unlisted public companies are the winners in new equity crowd funding laws which passed the Senate today.

Those with less than $25 million in assets and turnover can raise up to $5 million via crowdfunding.

However, small proprietary companies, those more likely to contain early stage startups, still can’t get access to crowd funded equity.

Jonny Wilkinson, the co-founder of online equity crowdfunding platform Equitise, says his company will launch offers as soon the crowdfunding framework is in place and licensing begins in about six months.

“There’s going to be huge demand,” he says.

“We’ve been approached by hundreds of companies over the past two years that we were unable to help and we’re looking forward to working with all the suitable companies to use equity crowdfunding to harness the crowd.”

Wilkinson says Equitise is continuing to work closely with government and Treasury to come up with a framework for proprietary companies to access equity crowdfunding as well.

The peak body for Australia’s fintech industry welcomed approval of the Corporations Amendment (Crowd-Sourced Funding) Bill 2016, saying the changes provide a major avenue for companies to grow and create jobs.

“This new legislation represents an important step to open up early-stage capital markets, which will ultimately help businesses to grow and therefore create new employment opportunities,” says FinTech Australia CEO Danielle Szetho.

“It also represents a substantial step forward in making the Australian regulatory environment internationally competitive, given concerns that Australia is falling behind the rest of the world when it comes to equity crowdfunding (ECF).”

She says there’s strong pent-up demand from Australia’s investment community to utilise the provisions in this legislation.

“Also, some of the companies interested in taking advantage of equity crowdfunding are family run enterprises, so this doesn’t just benefit the startup community, it’s about everyday mum-and-dad SMEs as well,” she says.

Like Equitise, CrowdfundUP has been approached by a large number of companies wanting to crowdfund.

“Unfortunately, it’s been a 15-month marathon to get this legislation across the line but nevertheless we are excited that it is now in place,” says CEO Jack Quigley.

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10 rising Australian startups

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Due to recent developments regarding the crowdfunding legislation changes, as well as tax breaks aimed at start-up investors, Australia has become a home for a number of interesting start-ups. This is a part of the larger initiative to transform Australia into a powerhouse of innovation. The initiative is designed to help launch, grow and maintain local start-ups, making them attractive for outside investors.

That said, here are just 10 of the most promising companies which have already shown remarkable growth in a very short period of time and that you need to keep track of:

1. Canva
In late 2015, Canva managed to raise $21 million and surpass the 5 million users mark. Since then, the company has launched their own platform in six different languages, all in an effort to make graphic design easy and approachable for everyone. Today, over 10 million people are using Canva to produce high-quality designs and professional-looking graphics. Individuals can use Canva to edit their photos by adding various frames, borders, and text and it even offers dedicated fonts and images you can use to further better your design.

2. Divvy Parking
Founded by Nick Austin, Divvy Parking is an online parking system aimed at challenging commercial parking operators. It allows both individuals and companies to market their normally under-utilized parking spaces in order to provide everyone with a dedicated parking space. With Divvy Parking, commuters have access to both long and short term parking for just a fraction of a price they would normally pay to use a traditional car park. Currently, the company is partnered with large developers such as GPT Group, Dexus, and Knight Frank.

6. LawPath
LawPath has quickly become one of Australia’s largest online legal services. They provide numerous standardized legal documents used in common transactions. The company has hundreds of layers available to help create a fully customized solution, no matter what legal problem you might have. LawPath has partnered with over 250 different law firms based in Australia in order to provide their services to all small-to-medium sized businesses. You can either make a one-time purchase for a single use or you can opt-in for a full subscription and be provided with free legal quotes and a full range of legal documents.

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Tank Stream and York buttering up

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Two of Australia’s premier co-working spaces are coming together to strike a blow against the simmering interstate rivalry between Sydney and Melbourne as the premier destination for ­aspiring technology start-ups.

With both cities striving for the crown, Sydney-based Tank Stream Labs and Melbourne’s York Butter Factory are joining forces at a time when international players — WeWork, RocketSpace — are trying to muscle into their turf.

Tank Stream’s chief executive Bradley Delamare said the real tussle should be between local Australian outfits and their international peers

“The Melbourne versus Sydney debate distracts from the real issues impacting Australian start-ups,” Mr Delamare told The Australian.

“The competition shouldn’t be between cities, it should be between Australia and the rest of the world.”

The partnership between Tank Stream and York Butter will allow members of the respective spaces to work in both spaces for free.

Start-ups working from the two spaces will have access to the existing, supportive co-working networks each of the spaces has developed, as well as making ­interstate travel more seamless.

“Tank Stream and York Butter Factory are both Australian companies supporting Australian start-ups,” Mr Delamare said.

“A lot of international incu­bators and co-working offerings are entering the market, and while that speaks to the inter­national appeal of the Australian tech scene, homegrown companies like our own are the best equipped to support the national start-up landscape.”

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Chris Brycki says the high fees and flashy marketing of the Spaceship fund raises red flags

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Chris Brycki, the founder and CEO of Stockspot, an automated investment adviser, penned this analysis of Spaceship, touted as a superannuation fund for millennials:

If superannuation were a religion, the newest kid on the block, Spaceship, would be preaching Scientology.

They get full marks for the use of flashy marketing and celebrity endorsers to distract people from the underlying financial product being sold. Look under the covers and you won’t find a tested process behind their investment strategy (to buy tech stocks), and no track record to support their high fees.

Just clever marketing.

If that marketing were helping engage young people to make better financial decisions I’d be a huge supporter, but it’s not the case. Investors in this fund are falling for the same traps the financial industry has been spinning for years; luring novice investors into the hottest sector of the day at the worst possible time and charging high fees to do so.

We’ve seen this all before. Targeting inexperienced investors to chase hot momentum stocks happened in 2000 and 2007. The highest inflows into tech focused funds in history was in 2000, just before the tech crash that saw the NASDAQ fall 80%.

Alarmingly, the Spaceship product has some clear contradictions which should be raising red flags for anyone who looks beyond the hype.

Their marketing explains that people have too much exposure to “old economy” companies such as BHP, but its own exposure to BHP is higher than a typical growth super fund. Spaceship invests more of its member’s money into Commonwealth Bank than into Amazon, Netflix and Ebay combined.

It stresses the importance of transparency but won’t disclose the ETFs (exchange traded funds) they invest in. Is this because the ETFs that make up their portfolio can be bought for a fraction of the cost the fund is charging?

It touts the importance of looking more than five years ahead yet they’re switching people out of super products with life insurance into their fund which has none. A move financial advisers would understandably advise against for the long term.

It promotes itself as “futuristic super” yet the tech stocks it buys are the ones that have already done extremely well.

Spaceship states it’s looking for “private technology company investments”. Yet the high-risk and high-reward nature of unlisted venture investing (ie private tech companies it plans to invest in) is contradicted by the unambitious growth target of inflation plus 2.5%. By their own admission this fund is looking to take high risk for low returns. Even Australian Super’s less sexy high growth fund targets inflation plus 4.5%, almost double.

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Doctor finder HealthEngine taps blue chip investors

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nline medical booking service HealthEngine is set to unveil a third big name venture capital backer, as part of a series C funding round.

Street Talk can reveal that HealthEngine is currently before potential investors, seeking a $10 to $20 million equity injection in a deal that would value the company at north of $100 million.

It’s understood HealthEngine has already secured the support of at least one high-profile backer, which would join the register alongside fellow heavyweights Telstra Ventures and Seven West Media.

The company has told prospective investors that funds raised would be put towards national expansion. As it stands, HealthEngine’s doctors, dentists and allied health booking services are only available in Sydney, Melbourne, Perth and Brisbane.

The raising is expected to be wrapped up in the next fortnight and, if successful, would have HealthEngine fully funded for the national rollout.

HealthEngine looks like one for investment bankers’ little black books, with the shareholders no doubt targeting a sale or initial public offering in coming years should everything go to plan.

The company was co-founded by Marcus Tan and Adam Yap, who line up as chief executive officer and head of product and engineering, respectively.

It is overseen by Pat O’Sullivan, a non-executive director at Carsales.com Ltd and former PBL Media chief operating officer, and has a host of other well-known investors including Lux Group’s Adam Schwab and Carsales’ Greg Roebuck.

The raising comes after another $10 million funding round in 2014, and the seed round which saw Telstra Ventures and Seven West emerge with a stake one year earlier.

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TSL’s NewCo Session 2017

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Tomorrow is the day for our TSL NewCo Session! The session will run from 3:00pm-4:00pm and will be a two part session, consisting of a tour of TSL, talks from our CEO and expert Founders plus some networking.

The session will cover:
How does TSL foster innovation, what we do to promote collaboration and support growth for our companies (partnerships, events, membership deals, onsite facilities), the types of leading tech companies we have and our alumni, talks from our CEO and also expert Founders in TSL.

When: 9th March 2017
Where: Level 4, 17-19 Bridge St, Sydney
Time: 3:00pm-4:00pm

Tickets are limited- secure your spot here