PRIVATE EQUITY CURE FOR START-UP PAIN
Written on the 9 September 2015
PRIVATE equity firms will become the lifeblood of Australia's next generation of technology start-ups, providing funding, business strategy and connections, according to Dropbox Australia.
Speaking at the annual AMMA Private Equity Spring Conference, Dropbox Australia country manager Charlie Wood (pictured) says there's no shortage of budding entrepreneurs with good ideas, however they lack the support to make them a reality.
"In my experience, as someone who has run two different start-ups in the enterprise social media space, I have found that there has been a lack of support available in Australia for entrepreneurs to drive their ideas forward," Wood says.
"This support would come in the form of introductions to major domestic and international contacts, suggestions for business strategy, funding questions and the ability to help these ideas turn into sustainable companies.
"This space is where local private equity firms can bridge the gap. Instead of entrepreneurs reaching out to Silicon Valley, which is already inundated with people looking for help, they can build a successful start-up with the support of a private equity firm that not only raises capital but also takes a role in driving the company forward."
AMMA Private Equity CEO Paul Jansz says technology start-ups have enormous potential to achieve growth and returns with the right support.
The Gold Coast-based firm manages investment opportunities in the technology and mobile sector, including music streaming service Guvera and sports portal Sportkix.
"One of the key issues that entrepreneurs struggle with is understanding where and how to fund their million-dollar idea, and that's where we come into the picture," Jansz says.
"In return, we are able to access some of the world's most exciting pre-IPO investment opportunities and offer them to clients of our global accounting firm network.
"When you think about how technology touches our daily lives, from how we find information to how we communicate with each other, you realise how innovative and limitless the tech space is."
Wood says Dropbox and Guvera share a number of key similarities that have contributed to their global success.
He says both platforms understand the value of real-time consumer feedback to continually evolve, particularly when it comes to software as a service.
"Both technology platforms have been effective in developing key channels and partners that have helped to drive scalable distribution, for example, Xero's partnership with Dropbox and Lenovo and Brightstar's partnership with Guvera," Wood says.
"At the end of the day, apart from funding and business strategy, a successful start-up needs to have scarcity and scale. Every product needs a point of differentiation and the ability to drive significant user numbers."