Funding Isn’t Everything…
It might seem ironic coming from us, but for startups, funding isn’t everything. It’s impossible to deny the positive implications of a cash injection, but for companies that are struggling to turn bright ideas into global businesses, there’s often much more missing than money.
A particularly bright comment was placed on our Facebook page this week that was so compelling I felt we had to respond. Mark Gustowski said: “Skills development and actual practical support for commercialisation have been sorely lacking for a long time in Australia. There have been countless R&D funding and support programs but without the skills and knowledge of how to grow global businesses, manage IP and understand the commercialisation pathway the ROI for Australia has been glaringly missing.”
It’s a concise analysis of the Australian startup scene that’s full of sharp insight. For too many venture capital firms, the end goal of a profitable exit remains unsupported by developmental investment to help get startups to the finish line. Perhaps it’s the word ‘investment’ that does it, viewed in simplistic terms it can be a limiting factor, turning venture funders into aggrandised bankers.
What’s missing is the real, practical guidance and experience needed to take smart business concepts and turn them into global enterprises. Core business practices such as marketing, legal, digital product development and finance are everyday considerations for tech startups, but often founders have specialised expertise – they can’t be expected to know everything at an expert level.
So what can be done? Surely VCs can hardly be expected to assist their ventures in every core practice; across diverse portfolios it would necessitate colossal teams working around the clock to support investments across all sectors. Well, there’s a solution to that, one that smart funds and accelerators have already begun to understand and utilise… specialisation.
We’re fond of challenging traditional wisdoms at Oxygen Ventures. A favourite quote for us is: “Sometimes the best way to get your eggs from point A to point B is to put them all in one basket and take really good care of that basket.” It’s close to the approach we’ve taken. Of course, we limit risk to ourselves and ventures by diversifying in other ways, but if we exclusively support digital startups, we can provide experienced guidance in almost all key elements of business – it means startups can concentrate on what they do best.
We see the positives in a very similar light to Mark; supporting skill development through practical support for commercialisation. It’s so close to our philosophy it could be our tagline. Along the way there are benefits for the startup in protection of IP, a better understanding of scalability, profitability and good digital business practice, and a mentoring process that makes better leaders of founders. It’s all delivered through our relevant and specialised expertise, from in house development, testing and marketing to board level advisory.
The clear benefit for us is a straightforward path to ROI. There’s no denying the methodology works, we see it in our startups… and there are others like BlueChilli who follow similar practices – supporting a core business requirement to build healthier, more profitable companies. It may be a drop in the ocean in terms of Australian venture capital, but it’s certainly the direction we see VC going, not just at home but further afield too.
If you run a tech startup that could benefit from hands-on support in core business elements, we want to hear about it. You can submit your pitch here or talk to us directly to find out more about what we can do to help you achieve more.