Three potential investment opportunities Australian startups should know about

You’ve just had a business idea – and it could be a game changer.
Small business ideas

But then the reality sets in that you need a way to fund your fantastic idea.

Beyond personally financing your idea with your savings or taking out a business loan, you might need to consider how you’ll secure further investment to get your idea off the ground.

These five startups managed to secure investment from different sources to help build their product offerings.

Learn how one of these investment options might suit your business.

Pitch to an early-stage venture capital investor

During the early stages of product development in 2013, fashion subscription service Her Fashion Box founder Kath Purkis raised $250,000 from startup investor Domenic Carosa.

A year later, she sought new investment of $1 million to establish a warehouse in the US, start tailoring the boxes to US seasonality, and collaborate with beauty product manufacturers and designers.

It’s reported Dominet Digital investment group – of which Domenic Carosa is a non-executive director – provided the additional funding.
Fashion and lifestyle subscription service, Her Fashion Box

Fashion and lifestyle subscription service, Her Fashion Box received investment to help the business invest in product development, warehouse services, and marketing. Image source: Her Fashion Box

Early-stage investors will often offer more than financial support to bring your product to market; they might also provide mentoring, tech development, support to globally scale your offering, and future investment pitch support.

Venture capitalist Ryan Spoon says a powerful pitch for early-stage investment will “convey the passion that drives you”.

When you’re looking to pitch, be sure to research to whom you’re pitching.
Pitching to investors

Some investors will only consider meeting business owners who have mutual connections.

Other early-stage investors, such as Blue Chilli, encourage startup founders to pitch to them directly – through the investor’s website, through email or answering cold calls.

Apply for a government grant

Director of strategic business partner group Rimon Advisory, Lior Stein says many entrepreneurs are unaware of government grants they could, and should, apply for.

“It’s such an attractive source of cash, but statistics show that about 70 per cent of eligible Australian companies either are unaware that they’re eligible or simply don’t know how to go about accessing the funding available,” Mr Stein says.

The Australian Government, and each state government, offer funding and advisory support to businesses of various industries.

The Government’s grant finder allows business owners to search grants relevant to their state or industry.

Investment group ATP Innovations helped two of its biomedical investments – Elastagen and Endoluminal Sciences – gain $4.5 million from the NSW Medical Device Fund in 2013.

The funding allowed the two companies to further test and develop their innovative medical products.

Project management and communication tool startup ScribblePost received $350,000 from AusIndustry’s ‘Accelerating Commercialisation’ grant in early 2016.

The grant will allow ScribblePost to bring the product to market and service its first group of pre-registered users.

Use crowdfunding websites to gain support from potential customers

Crowdfunding has revolutionised the startup industry by allowing businesses to pitch directly to their potential customers for investment.

It has even helped businesses who have yet to start manufacturing their product to validate their position in-market.

Indiegogo, GoFundMe and Kickstarter are the top three most popular crowdfunding websites worldwide.

Melbourne startup Oomi had phenomenal success with Indiegogo in 2015, raising US$1.8 million to sell and ship its innovative smart home system to customers worldwide.

Oomi’s vice president Chris Hall said the company set a “modest” fundraising goal of $50,000 – yet managed to raise $250,000 funding on the first day.
Smart home technology company Oomi

Indiegogo users pledged millions to smart home technology company, Oomi. Image source: Oomi