How James Spenceley decides on what startups to invest in
11 July 2018, Written by David Simmons
His Midas touch has launched Vocus Group into a listed company and transformed Airtasker from a startup to a national phenomenon, but how does James Spenceley decide on what to invest in?
Spenceley's latest investment is a $1 million injection into Integrated Green Energy Solutions (ASX: IGE) as they ramp up production of their eco-friendly fuel.
IGE has developed a world first, patented technology turning unwanted plastic waste into fully refined, road ready fuel.
The company is set to launch its first plant in Amsterdam from November this year, using unwanted plastics from the UK and Europe to create its patented fuel technology. IGE also has sites approved in China, the UK and the USA.
Spenceley, chairman of Airtasker and a two time EY Entrepreneur of the Year award winner, decided to invest in the company straight after taking his BMW to the test site on the Central Coast and successfully driving all the way back to his home in Mosman, Sydney.
Business News Australia spoke to Spenceley about the investment in IGE, his advice to young entrepreneurs, and to find out what it takes to get investment from him.
So you're putting $1 million into IGE what about them made you so confident of their potential success?
I took my car up there and filled it up with their petrol, and drove it home and it worked straight out of a silo in a storage tank. I drove around for a week on fuel that was created from plastic waste. Waste is such a problem and this is such a good use of recyclable waste. So for me it solves two problems, a company that can solve the problem of plastic waste that would be a good investment, but a company that can do something and turn it into fuel it was a no brainer as an investment.
What are some things you look for before you invest in companies?
For me it's always about demand do people actually want these products, that's always the thing. I see seven to ten businesses a week and maybe even more during peak period and a lot of them have to spend the first half an hour of the meeting explaining why someone would want to buy it or download the app and to me that's the first failure. Airtasker is one where I thought 'this is brilliant'. I knew that was going to be used. And something like IGE is the same, everyone needs fuel. I'm looking for a business where it's just a no brainer with what they do.
The green revolution is well and truly upon us now, what excites you about these new technologies that are emerging?
Most plastic that we throw into the recycling bin isn't recyclable and that presents an enormous issue. To think that the world is taking its plastic in a shipping container to China and burying it in China makes no sense at all. There's a fundamental problem with the way the world works at the moment. I think there's probably going to be a big movement as the millennials set their eyes on it and they're going to do things that make more sense.
What else are you currently working on?
Generally at the VC stage I really like to see things in the millennial sector. In the next ten years those people are going to be in their 20s and have disposable income and there's going to be a big change in the world. I'm in the early stages of Marley Spoon, and that business suits that market. Millennials don't want to go and buy lots and lots of ingredients at the shop and throw half of it out if they haven't used it. They want it in a box delivered to their door with the exact portion they need, no waste, and good quality, delicious, all that sort of stuff. I think generally what I'm interested in is what's coming in the next ten years, once the baby boomers have moved into retirement and have stopped spending as much and the big income generators are the millennials. That's a really interesting topic. I'm not a millennial but I try to think like one.
You've clearly had a very successful career so far so what would be your top tip to young entrepreneurs?
Do it while your young. I have kids now, if I had the exact same opportunities now when I'm 42 versus when I was 28 I don't know whether I'd take the risks now with kids in mind. Take risks early, that's the first tip. The second tip, do something you know really well. Go and get a job in the industry, understand it, work out why it doesn't work well, and then go and do it better.
Business News Australia
Author: David Simmons