To help connect early stage startups to seed funding, Sydney coworking space Tank Stream Labs has partnered with Ernst & Young and Ashurst to launch Seed Money, a new program giving startups the chance to pitch to investors.
Founded by Brad Delamare, CEO of Tank Stream Labs, and Fintech Summit founder Glen Frost, Seed Money came about after Delamare noticed problems on both side of the fence; startups were coming to him looking for funding opportunities, while those new to the startup investment space interested in finding opportunities don’t know where to start.
“There are a lot of high net-worth investors out there who might be looking for investment opportunities, but them knowing what startups to invest in and startups not knowing where to find them causes a miss-match,” Delamare explained.
Launched last month, the first Seed Money event presented an opportunity to merge both early startup founders and investors together while addressing the financial issues early stage startups face.
Despite the fact that the amount of venture capital funding available in Australia has never been higher – there is an estimated $2 billion now available in the sector – there still exists a gap in the angel and seed funding space.
“To start off with startups may be funded by friends and family or with contacts they have, but to actually raise that first external round of funding is very difficult,” Delamare said.
“There might not be any return for investment for a while, so it’s harder for investors to want to invest because of the early nature of those businesses.”
Before reaching the pitching stage, each applicant for the program is passed through a filter process to determine their suitability for investment. Applicants are then chosen based on who best fits the theme or topic of the upcoming event, which is due to change each month.
New and experienced investors alike will be invited to attend, with a panel of experts from organisations such as EY, Sydney Angels, and Ashurst then to pose questions in an attempt to stir up information that’s relevant to the listening investors.
Delamare explained that these panelists too will to change to fit the theme of each month in order to ensure their expertise matches the startups pitching.
The December event will be focusing on companies that have ambitions to scale globally; other sectors pencilled in for future events include fintech or healthtech, with Delamare saying he wants to attract a different style of investment for each program.
The Seed Money program is the latest initiative aiming to bridge the gap in angel and seed funding, joining the likes of Investible’s First Angel program.
The First Angel program was launched by Investible cofounders Trevor Folsom and Creel Price, First Angel looks to democratise angel investing in Australia and generate a more diverse investing community by filling the knowledge gap of local angel investors in the early stage investing process.
In addition to helping startups access funding, Tank Stream Labs is also working to help connect them to talent. The space in October partnered with Austern International to connect its resident companies to young talent for paid internships.