I am often asked by Australian entrepreneurs getting started about raising money. Not that I can claim to be an expert, but I guess I have a few war wounds from raising $450K from 2 incubators, an angel, Visa, Friends and family MasterCard, American Express 
and some government grants. I am also currently in the US starting to get to know who the good investors are. So I thought I would share some of my experiences so that it might make it easier for some of the Aussie Entrepreneurs getting started now. I believe we Aussies have some great ideas and skills and we just need to do more as a business community to nurture that into successful businesses.
A few rules or lessons on raising money: (I welcome any comments or feedback as this is by all means not a definitive list)
1. don’t do it. If you haven’t done it before it’s a pain and will distract you from your business. Try every other avenue before you look to outsiders for funds. Friends and family, mortgages, savings, credit cards, prostitution…just kidding. Its seriously hard raising early stage money in Australia and you will need more than a business plan.
2. Rather than spend money partner with someone who has what you need. If you don’t have the programming skills to build your great idea, partner with someone who does. If you aren’t great at networking or marketing then find someone who is.
If you have exhausted those options and still need to then I learnt a few things that may help you.
The amount you are raising determines the type of investor you are talking to.
- Angels (rich folks with money to invest) – 10K – 500K.
- Angel networks (ie groups of rich folks normally managed by 1 person) 500K - $2 Million
- Government Grants (I’ll talk about this one in a later post)
- VC’s early stage - $1M - $8M
Its really no point talking to VC’s unless you can demonstrate how one day you will be a $100million company. So most likely you will have to find some Angels - How? Start with rich people you know, if not try going to networking events, just meet and talk to people. Nick McNaughton gave some good advice at Angel connect and said find someone who has made a lot of money in your industry and contact them.
Valuation:
This is the hardest question I found at the start. My finance degree and a few people I spoke to told me that you work out what your sales and expenses are going to be and discount your cash flow some rate of return (20-30%). This is a good exercise to do and it helps you plan your business but I don’t think it’s practically how a lot of investors think, certainly not in the US (Maybe more in Australia). There are some benchmarks which I will elaborate on in another blog.
Let me know if you have tried raising money in Australia and what you found hardest at the start. If anyone is looking to raise, let me know what is puzzling you and maybe we can start a discussion about that.
Tags: Investment, Startup
We were really happy that Booking Angel was voted # 7 in the top 100 web 2.0 companies in Australia. There was a great article in the BRW discussing web 2.0, some of the companies and stakeholders involved. The list was compiled by Ross Dawson and the future exploration network.
i was lucky enough to be one of 5 CEO’s selected to present at the official launch hosted by KPMG. The best thing about the day was meeting so many people either working on interesting projects or really interested in what is going on in the web 2.0 space.
The full list of the top 100 companies and their description can be found here
Tags: Booking Angel, News, Press, Top100
The trend in online reviews driving more bookings in the travel industry is now starting to happen in the restaurant industry. According to a recent study by Comscore 79% of people who have visited a restaurant in the last 3 months considered online reviews to be very influential in their decision to visit. What was also interesting is that user reviews were given more influence than professional reviews (82% vs 69%). Power to the people , huh. Its not just about restaurants either it talks about several categories. Check out the release here
Booking Angel gives restaurants a way to tap into this opportunity. We will help convert more of these people reading ratings into customers. So which restaurants are getting the Bookings and how do restaurants tap into this opportunity? Our restaurants vary in size and style we have 3 hat fine dining restaurants like Tony Bilsons restaurant Bilsons through to family owned local restaurants …. Some of our restaurants have received over $50,000 worth of new business others only get a few bookings a month. What is fair about our service is that restaurants only pay for each booking they receive…. It gives restaurants a way to start to experiment with their online advertising. If the initiatives they are trying aren’t resulting in more bookings they will know and can start trying something else.”
Peter Barker Owner of the Pink Peppercorn restaurant in Darlinghurst said “The initiatives Booking Angel recommended resulted in about 30 extra bookings a week. That was around 80 extra covers.”
Pink peppercorn is typical of most Australian restaurants they either don’t take online bookings or take a long time to respond to customers when they email them. Booking Angel overcomes this problem as the instant somebody makes an online booking at the restaurants own website or at a website such as Eatability the restaurant receives a phone call and they just press 1 to accept the reservation or 2 to reject. The restaurant receives all the customers details and just records the details in their usual booking diary. They don’t need any special equipment just a telephone.
Tags: comscore, Online Reviews, Research, statistics
