Holes in Australia’s funding environment have long been a bugbear of the nation’s startup sector.
Raising capital is the most reported external challenge for Australia’s startups, the latest Startup Muster survey found.
But recently launched funding education startup CapitalPitch is hoping to bridge the gap by assisting young companies get ready for raising and teaching founders how to navigate the process.
Founder Jeremy Liddle told Business Insider it was his expensive and business-killing experience raising cash for his previous startup RioLife that spurred him to launch CapitalPitch.
Liddle burned about $20,000 on advisory services and six months of his time trying to teach himself how to raise capital while running a $1 million round for his acai berry company, by which time a bunch of competitors had flooded the market.
He explained part of the problem was early investors didn’t want to dilute their share, so he was forced to raise on a $5 million valuation when in reality the company was worth around $1.5 million.
“We boxed ourselves out of the range,” Liddle said.
This time around, Liddle has raised $150,000 to launch the funding platform which pushes founders through a six-step process to get their businesses ready for seed or series A equity rounds of up to $10 million.
Liddle said it takes new businesses, trains them to be investor-ready, and then connects them with a network of investors.
The first step is filling out a questionnaire which determines an indicative pre-money valuation. Investors are able to access a bunch of startups which have been curated and run the gauntlet of the CapitalPitch program.
“We believe entrepreneurs are solving the world’s biggest problems,” he said. “By easing the Series A crunch we enable more innovative businesses to raise capital and grow.”