I’ve written before about the state of venture capital in Australia, but an article in the Bulletin has gone one giant leap further. According to a cover story by Joshua Gliddon, Aussie Web 2.0 types are packing for Palo Alto to seek venture funding in frustration that the local VCs either don’t get it, or are pushing for unpalatable valuations.
I’m not one to slam journos, but the article smacks of tabloid journalism…Australian entrepreneurs are being forced to leave home in search of …funding.
The poster boy for the piece is Cameron Reilly who set up ThePodcastNetwork 18 months ago – while I’m on record that I firmly believe blog networks are good investment opportunities I do have caveats. According to the article, Cameron’s business has 250,000 listeners, yet after 18 months he is leaving for the US with as little as $5k in his bank account. The sequitur (or non ) is that he has failed to monetise his audience.
I’m amazed that the article does not pick up on excellent Aussie businesses that have bootstrapped themselves to success (Atlassian), or have secured sound angel investment before heading over to the US for further funding (Bluepulse). Nor has Joshua canvassed views from the likes of Netus – a bunch of serial Internet entrepreneurs who are funding Web 2.0 ventures or many others who are funding sound Web 2.0 entities and building their value before they head over to Silicon Valley – voluntarily (as Cameron is quoted as saying, “It makes sense to go to the US. That’s where 65% of our audience is, and that’s where the action is“).
My beef is not that there are some very valid points to the article, it’s that I feel a more balanced view could have been put forward.
For one, I am very focused on this issue and working behind the scenes currently in forming a platform that will put Australia onto the map as a country that punches well above its weight in building global ventures in this space.
For two, I totally agree with Brett Morris from Neo that “…there’s a lack of early-stage invesment capital for risky consumer internet businesses” in Australia. Will this change – you bet, I am already seeing so-called conservative VCs investing their private money in just such businesses. Once we have a few more success stories to point at, there will be more money available for the space. I’m certainly up for the challenge in catalysing this!
I seriously wish Cameron luck on his quest, I understand his frustration and I also extend an offer to guide him through the tricky terrain he is likely to face on Sandhill Road.